After semiconductor companies struggled to manufacture enough chips to address a pandemic-era spike in demand, they now face a supply glut after that demand plummeted. But Wall Street analysts suggest that a boom in demand for artificial-intelligence models can turn that direction around again.
Lam, which reports after the bell Wednesday, makes the very complicated machinery used by foundries like TSMC to etch billions of transistors onto silicon wafers to make chips designed by the likes of Nvidia and Apple Inc. AAPL , while chip makers like Intel Corp. INTC forge their own silicon. “For Lam, we are updating our model to reflect inline [March quarter] results followed by a modest [June quarter] miss ,” Muse said, added that he expects Lam to reiterate that the first half of the year is tracking better than the second half.
TSMC earnings are already set for a worst-case scenario, Susquehanna Financial analyst Medhi Hosseini said in a recent upgrade of the stock. TSMC last week reported that its revenue fell from the year-ago quarter for the first time in nearly four years. Generative AI, which has gone mainstream this past year with the release of OpenAI’s ChatGPT, uses massive amounts of data drawn from a site’s application program interface, or API, to train the AI product and train for inference. Google also has a generative-AI product, Bard, and Adobe Inc. ADBE recently released an AI product named Firefly, a “co-pilot” technology aimed at helping create content. Meta Platforms Inc. META has its own eponymous product, Meta AI, while Amazon.com Inc.