Strategic Intelligence: Semiconductors Sector Scorecard Q1 2025 Update

On April 2, 2025, US President Donald Trump imposed various tariffs on imports into the US, sending global financial markets into turmoil. Currently, semiconductors are exempt from the new tariffs. However, the mere threat of their spontaneous imposition is causing much uncertainty within the industry. Companies are being pressured to invest heavily in US-based manufacturing. For example, TSMC has pledged an additional $100 billion to US chip manufacturing to protect its sales in the US market. Nonetheless, these substantial investments could prove economically unsound if enforcing steep tariffs is merely a short-term measure.

Individual companies monopolize various parts of the semiconductor value chain. For example, ASML is the sole supplier of extreme ultraviolet (EUV) lithography equipment, which is essential to advanced chip manufacturing. Nvidia and TSMC hold 90% market share in AI chip design and AI chip manufacturing, respectively. This has resulted in concentrated pockets of power with few serious contenders in sight.

Longstanding incumbents like Intel and AMD have lost significant ground, having failed to prepare sufficiently for the generative AI boom. Nevertheless, future competition can be expected as Big Tech companies such as Alphabet, Baidu, and Microsoft have started designing their own AI chips in-house to gain greater self-sufficiency. This could lead to diversification in the design space, although the AI chip foundry market will likely remain a monopoly for the foreseeable future.

Scope

• This sector scorecard provides a top-down, comprehensive outlook for the key players in the semiconductors sector over the next two years, based on the key themes set to transform their industry landscape.

Reasons to Buy

• Companies that invest in the right themes become success stories. Those that miss the important themes in their industry end up as failures.
• The thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.
• The analyst developed a unique thematic methodology for ranking all major companies in all major sectors based on their relative strength in the big themes that are impacting their industries.
• Our thematic engine tags over 180 million data items across six alternative data sets - patents, jobs, deals, filings, social media, and news - to themes. The vast datasets within our thematic engine help our analysts to produce sector scorecards that identify the companies best placed to succeed in a future filled with multiple disruptive threats.