This is Why Semiconductor Stocks Popped Today

Semiconductor stocks had quite a day.

  • Advanced Micro Devices (AMD) was up $6.61
  • Intel (INTC) jumped $3.35 to $51.62
  • Micron Technology (MU) was up $2.56 to $78.21
  • Marvell Technology (MRVL) was up $4.82 to $73.76
  • NVIDIA (NVDA) soared $25.16 to $281.50

For one, Intel CEO Pat Gelsinger compared semiconductors to oil, suggesting that computer chips will play a central role in international relations in the decades ahead, said CNBC.

Two, the CEOs of Micron Technology and Lam Research are urging the U.S. government to allocate as much as $52 billion for American chipmaking.  China “is investing more than $100 billion supporting their semiconductor industry,” Micron CEO Sanjay Mehrotra said, as quoted by Nikkei Asia. “And hence, it is extremely important that U.S. does play catch-up with CHIPS Act, with investment tax credits.”

Unfortunately, the current shortage is only getting worse.

Three, “The demand for semiconductor chips continues to grow globally, outpacing supply constraints in a global market that has been hit hard by pandemic-driven supply chain woes. Now, ASML, the keystone producer of the lithography machines used to make advanced semiconductor chips, has said that it anticipates a two-year shortage for the industry due to shortages of necessary parts for its machines,” says the Financial Times.

However, there may be some relief on the way.

Apparently, Nvidia is interested in exploring Intel as a foundry for making its chips, CEO Jensen Huang said, as noted by Reuters. “They’re interested in us using their foundries. We’re very interested in exploring it,” Huang said, adding that foundry discussions take a long time as it’s about integrating supply chains and not like “buying milk.”

It’ll be interesting to see how that plays out.

Stay tuned for more on that developing story.