All eyes are on it! Chip giants start their financial report season, will the US stock market usher in a new round of gains?

As the focus on analog chip giant Texas Instruments Incorporated (TXN.US) will announce its earnings this week, one of the core drivers of the "long-term bull market in US stocks" since 2023 - chip stocks in the US market, is about to usher in a new round of earnings season. According to the semiconductor analyst team of Wall Street financial giant Goldman Sachs Group, Inc., the latest earnings and outlook released by Taiwan's chip manufacturing giant Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR suggest that the demand for AI chips is still in a surge growth trend, while semiconductor manufacturing and testing equipment are also in a strong growth cycle due to the recovery momentum in chip demand. Therefore, Goldman Sachs Group, Inc. believes that US chip giants will soon successively announce strong financial data and future performance outlook. On January 20th, Trump officially returned to the White House, and traders began to anticipate the "Trump 2.0 era" which may drive inflation back up, causing investors to worry that the Nasdaq Composite Index and the S&P 500 Index, which are near their historical highs, may enter a downward trajectory. Therefore, the strong performance growth data of chip giants with high weights in the Nasdaq and S&P 500 indices is crucial for boosting the "AI faith" of global technology stock investors, and even the bullish trend of the entire US stock market. In a recent research report, Wall Street financial giant Goldman Sachs Group, Inc. pointed out that the "king of chip foundries" headquartered in Taiwan, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, reported fourth quarter earnings and 2025 outlook were significantly better than expected, indicating a positive outlook for AI chips and the optimistic growth momentum of global semiconductor wafer manufacturing equipment (WFE), testing equipment, and semiconductor raw material suppliers. Overall, Goldman Sachs Group, Inc.'s semiconductor industry analysis team believes that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's earnings growth continues to accelerate, along with the management's full confidence in the long-term growth trajectory of chip foundry business, supporting the institution's positive and constructive view on key driving factors in the high-performance computing, network infrastructure, and enterprise storage sectors dominated by AI chips. Goldman Sachs Group, Inc. reiterated its positive outlook on US chip giants in the research report, including NVIDIA Corporation (NVDA.US), which holds high weights in the Nasdaq and S&P 500 indices - Goldman Sachs Group, Inc. reiterated its "buy" rating and continued inclusion in Goldman Sachs Group, Inc.'s "Conviction Buy List," as well as reiterating its "buy" stock ratings for Broadcom Inc. (AVGO.US), Marvell Technology, Inc. (MRVL.US), Arm (ARM.US), Credo Technology (CRDO.US), and Micron Technology, Inc. (MU.US). Previously, the analyst team of another major Wall Street bank, Bank of America Corp, recently stated in a report that chip stocks in 2025 are still likely to be one of the most outstanding sectors in the US stock market, with Nintendo performances expected to expand from chip companies fully benefiting from the AI boom to analog chips and electric vehicle chip stocks, which have long underperformed the broad market and the Philadelphia Semiconductor Index. The "AI chip trio" of the US chip sector - NVIDIA Corporation, Broadcom Inc., and Marvell Technology, Inc., all feature on Bank of America Corp's 2025 list of "preferred chip stocks," with other chip stock targets on the list including semiconductor equipment giant Lam Research Corporation (LRCX.US), automotive chip leader ON Semiconductor Corporation (ON.US), and one of the EDA software leaders Cadence Design Systems, Inc. (CDNS.US). Overall, Bank of America Corp's analysis team expects the overall semiconductor market sales in 2025 to increase by approximately 15% on the basis of strong growth in 2024, reaching 725 billion US dollars, "This is still a very strong growth pace, although it has decreased compared to the forecast growth rate of 20% this year." "The boom cycle of the semiconductor market demand usually lasts about 2.5 years (followed by a 1-year downturn), and we are currently only in the midterm stage of this semiconductor upswing cycle that began in the fourth quarter of 2023." According to the latest forecasts from the World Semiconductor Trade Statistics (WSTS), global demand for automotive chips and analog chips that have been sluggish since 2022 is expected to experience the long-awaited "recovery moment" in 2025. Compared to the spring forecasts, WSTS has significantly raised its forecasts for the size of the semiconductor market for 2024 and 2025 in its latest autumn forecast, forecasting a 19.0% year-over-year growth in the global semiconductor market to $627 billion in 2024. WSTS expects the global semiconductor market toThe scale of the market is expected to continue growing from the base of 2024, indicating that the global semiconductor market is likely to grow by approximately 11.2% on top of the already strong recovery trend in 2024, with the global market size expected to reach around 697 billion US dollars.The WSTS expects that the growth of the semiconductor market size in 2025 will be mainly driven by the strong demand for AI training/inference computing power in the enterprise storage chip category, and the significant promotion of the artificial intelligence logic chip category. It is expected that the overall market size of the logic chip category, which includes CPU, GPU, and ASIC chips, will increase by about 17% year-on-year in 2025. The market size of the storage chip category covering HBM, enterprise SSD, and NAND fields is expected to increase by more than 13% compared to the 81% growth in 2023. At the same time, the WSTS also predicts that the growth rates of all other sub-categories of chips, including discrete devices, optoelectronics, sensors, MCUs, and analog chips, will reach single-digit growth rates as well. Goldman Sachs Group, Inc. comments on the performance of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR: Strong growth driven by AI chips, promising future Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, headquartered in Taiwan, announced its performance for the fourth quarter of 2024 last Thursday. The performance and management's outlook exceeded the consensus expectations of Wall Street analysts. The Goldman Sachs Group, Inc. stated that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's high-performance computing (HPC) business covering AI chips and server CPU OEM once again stood out, with the revenue growth of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's HPC business accelerating beyond expectations to a 69% year-on-year growth rate. Looking forward, the management of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR expects: a) the overall revenue for the full year of 2025 to grow by around 25%, with AI-related revenue expected to double year-on-year; b) capital expenditure is expected to be approximately $38 billion to $42 billion in 2025 (a 34% increase from the median), which is in line with the expectations of Goldman Sachs Group, Inc. but higher than the general Wall Street expectations; c) shared a five-year (2024-2029) revenue compound annual growth rate goal of around 20%, with AI-related revenue expected to grow by around 45%. Goldman Sachs Group, Inc.'s semiconductor analysis team believes that the latest performance, outlook, and management comments of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR are extremely optimistic positive growth signs for companies covered by Goldman Sachs Group, Inc. in the "AI Infrastructure Expansion and Establishment" field, such as NVIDIA Corporation, Broadcom Inc., and Marvell Technology, Inc. as well as semiconductor manufacturing equipment, testing equipment, and material suppliers (such as Applied Materials, ASML, and KLA Corporation). Goldman Sachs Group, Inc.'s analysis team in the research report combines the performance outlook of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to highlight the overall situation of the semiconductor industry: after a year of 6% year-on-year growth in chip OEM revenue (lower than previously expected by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR due to unfavorable macro environment), the company expects chip manufacturing industry revenue to grow by 10% year-on-year in 2025. This forecast is based on the view that the fabless semiconductor industry will end 2024 at normal inventory levels, and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's management's latest revenue growth acceleration is consistent with Goldman Sachs Group, Inc.'s highest-level industry growth expectations based on trend line analysis. Goldman Sachs Group, Inc. is bullish on the leaders in the chip and semiconductor manufacturing equipment (WFE) fields in high-performance computing (HPC) Currently, demand for AI chips is incredibly strong and may remain so for a long time to come. According to data recently released by the Semiconductor Industry Association (SIA), global semiconductor market sales reached approximately $57.8 billion in November 2024, up 20.7% year-on-year from $47.9 billion in November 2023, and up 1.6% month-on-month from $56.9 billion set in October 2024. John Neuffer, President and CEO of SIA, said in a statement, "The global semiconductor market continued to grow significantly in November, achieving the highest monthly sales total in history, with monthly sales increasing for the eighth consecutive month. Year-on-year sales have grown by over 20% for four consecutive months, with the Americas expanding for over twenty months."The sales volume in the district increased by 54.9% year-on-year.uring Co., Ltd. Sponsored ADRAIGoldman Sachs Group, Inc.URing Co., Ltd.'s optimistic outlook on its chip foundry business, coupled with higher-than-expected 2025 capital expenditure guidance, is a good sign for key WFE suppliers including Applied Materials, Lam Research, and KLA.In Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR chip factories, the presence of Applied Materials can be said to be omnipresent. Different from ASML Holding NV ADR, which is always focused on the lithography field, Applied Materials, headquartered in the United States, provides high-end equipment that plays an important role in almost every step of chip manufacturing, with products covering atomic layer deposition (ALD), chemical vapor deposition (CVD), physical vapor deposition (PVD), rapid thermal processing (RTP), chemical mechanical polishing (CMP), wafer etching, ion implantation, and other important chip manufacturing processes. Applied Materials has high-precision manufacturing equipment and customized solutions for chiplet advanced packaging processes such as wafer Hybrid Bonding and Through Silicon Via (TSV), which are crucial for 2.5D and 3D advanced packaging steps. Another global leader in the semiconductor equipment market, KLA, focuses on chip yield monitoring systems, making breakthroughs in broadband plasma optical inspection technology and the latest chip defect metrology inspection systems. This provides semiconductor manufacturers with increasingly powerful tools to improve production efficiency and product quality. Its advanced technology and equipment hold an important position in the industry and are widely used in various semiconductor manufacturing processes. Goldman Sachs Group, Inc. also believes that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's revenue growth expectations for 2025 (approximately 25% year-on-year growth) and management's comments indicating a slight recovery in utilization rates in 2025 have a positive impact on Entegris (Goldman Sachs Group, Inc. rates it as "buy"), a company in the semiconductor materials field with about 75% of its revenue coming from consumables sales affected by wafer starts in the semiconductor industry (note that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR accounts for approximately 11% of Entegris' overall revenue in 2023). Entegris is an important supplier in the semiconductor industry, mainly focusing on providing high-purity materials, chemicals, gas handling and filtration systems for chip factories, and a series of critical technology and raw material products. These products help chip manufacturers like Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to manufacture chips in high-precision, ultra-clean production environments, thereby increasing production efficiency and reducing defect rates. Entegris' high-purity chemicals and chip manufacturing raw materials play a crucial role in the global chip industry chain, especially in the production processes of advanced chips (such as 7nm, 5nm processes) and next-generation chips (2nm and below). Goldman Sachs Group, Inc. particularly focuses on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's constructive comments on the capacity for manufacturing N2 (i.e., 2nm) chips (Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR expects the number of N2 wafers to exceed N3 and N5 in the next two years, mainly driven by smartphone and HPC applications). Considering the potential for increased wafer capacity, Goldman Sachs Group, Inc. considers this to be very positive for Entegris' performance outlook. However, Goldman Sachs Group, Inc. does acknowledge that the overall wafer start environment in the semiconductor industry remains challenging, with many NAND chip suppliers reducing production in real time and the production scale of backend chip manufacturing nodes still being somewhat suppressed due to excess chip inventory in industries such as automotive and industrial sectors.