The high-flying semiconductor sector hit a new landmark Wednesday with global revenue topping $100 billion for the first time. “Despite a slightly down first quarter, the semiconductor industry achieved near record growth in the second quarter of 2017, posting a 6.1 percent growth from the previous quarter. Global revenue came in at $101.4 billion, up from $95.6 billion in the first quarter of 2017,” according to London-based analytics firm IHS Markit.
“This is the highest growth the industry has seen in the second quarter since 2014,” IHS added.
2017 has been a watershed year for the sector that has benefited from the climbing prices of cryptocurrencies such as Bitcoin and Ethereum, which has pushed semiconductor stocks to record highs. The record revenue jump was led by California-based companies Advanced Micro Devices Inc. (AMD) and Nvidia Corp. (NVDA), which saw quarterly revenue growth of 24.7 percent and 14.6 percent respectively, IHS said. (See also: Buy AMD on New Chip Design: Canaccord Genuity)
While cryptocurrency prices have fallen in recent days, the semiconductor sector looks set to stave off any short term volatility as input prices continue to fall. IHS Market noted a sharp rise in factory automation for discrete power transistors, thyristors, and other semiconductor products which are expected to reach $8 billion in 2021, accord to IHS Markit. Additionally, AMD and Nvidia got a boost Tuesday when analyst firm Jefferies said any weakness in cryptocurrency prices did not pose any short-term risk to either AMD or Nvidia as they shift towards mining specific products.
Source: IHS Markit
While leading the pack in revenue growth, AMD and Nvidia remain well down the list of semiconductor suppliers, which is headed by Intel Corp. (INTC) and Samsung Technologies (SSNLF). The two established players make up close to 30 percent of the market.
However, shareholders of AMD and Nvidia are the ones smiling. In the 12-month period ending September 12, both West Coast based firms have seen their share price more than double.