US chip stocks achieve best annual performance since 2009, led by NVIDIA and AMD
The Philadelphia Semiconductor Index rose by approximately 65% for the whole year, marking the largest annual increase since 2009. Although the index closed lower on Friday, it still remains at a level close to its historical high. Wolfspeed was the only component stock among the 30 stocks in the index that experienced a decline.
At the end of 2023, benefiting from the AI boom, stock prices of chip manufacturers soared, and American semiconductor companies recorded their best annual performance in more than a decade. Specifically, the Philadelphia Semiconductor Index rose by about 65% for the year, marking the largest annual increase since 2009. Although the index fell on Friday, it still remains close to its historical high.
The most prominent giant in 2023 is undoubtedly NVIDIA. With the booming demand for AI chips, NVIDIA's stock price has more than doubled, making it the first chip manufacturer with a market value exceeding $1 trillion. The semiconductor industry has welcomed a new champion in the past 30 years, and NVIDIA has become the undisputed leader in the field of AI chips, with its revenue expected to surpass Intel and Samsung this year, taking the top spot in the industry.
Another major player in the AI field, AMD, ranks second in terms of stock price increase among the constituents of the Philadelphia Semiconductor Index, with a cumulative increase of over 127% this year. AMD is following in the footsteps of NVIDIA by releasing new high-end chip products that are better at handling large datasets involved in AI training than traditional computer processors.
Wolfspeed, a chip manufacturer, is the big loser among the constituents of the Philadelphia Semiconductor Index, being the only one to decline. Its market value has evaporated by about 37% this year. The company produces power modules for electric vehicles, and its new factory is facing production difficulties, with disappointing performance forecasts.
ARM, a chip design company that went public in September this year, has also performed extremely well recently. Although it had a weak start after its IPO, with the strong rebound in the US stock market since October, ARM has risen by over 60% from its low point this year and has recently set multiple new highs since its listing.