The ongoing supply crunch for chips has hampered production across industries, but the situation is expected to improve this year. According to the Semiconductor Industry Association, the semiconductor industry has announced nearly $80 billion in new investments in the United States through 2025. Moreover, the Senate passed the U.S. Innovation and Competition Act last year, allocating $52 billion to increase semiconductor production in the United States. The semiconductor industry’s prospects look bright, considering solid funding and the unprecedented demand from several sectors. “I think we are expecting it to grow maybe double-digit —15% to 20% over the next three to five years,” a top semiconductor analyst Gokul Hariharan at JPMorgan said.
Advanced Micro Devices, Inc. (AMD) is one of the notable names in the semiconductors industry. AMD shares surged after the company posted better-than-expected results for the fourth quarter and issued a solid first-quarter sales outlook on February 1. However, the stock has slumped 2.2% intraday to close yesterday’s trading session at $120.08. Also, the stock has declined 16.6% year-to-date. In addition, Piper Sandler analysts downgraded the stock to Neutral from Overweight and reduced its price target. He also noted that AMD could face headwinds in the near term from the closing of the planned acquisition of Xilinx, Inc. (XLNX).
