AI computing power ignites a 3nm with advanced packaging, and Citibank supports the semiconductor equipment bull market.

Wells Fargo & Company, a financial giant on Wall Street, recently released a bullish research report on the semiconductor equipment industry. The institution stated that as global AI infrastructure construction led by tech giants such as Microsoft Corporation, Alphabet Inc. Class C, and Meta heats up, there is a significant acceleration in the expansion of production capacity for advanced 3nm and below chips and advanced packaging. The long-term bull market logic for the semiconductor equipment sector remains very strong. Wells Fargo & Company is particularly bullish on the lithography giant ASML Holding NV ADR (ASML.US) and the materials provider Applied Materials (AMAT.US), which play a critical role in every step of chip manufacturing, as well as KLA Corporation (KLAC.US), which focuses on defect detection, chemical process control, and yield management mechanisms in the chip manufacturing process. These companies have been given a "buy" rating and their target prices indicate that the strong performance of these giants so far this year is not over yet. The collaboration between NVIDIA Corporation and Intel Corporation, long-time rivals in the PC field, as well as NVIDIA Corporation's announcement of a $100 billion investment in the AI leader OpenAI to jointly build a super AI data center with at least 10 gigawatts (GW) of computing power, and the joint deployment of AMD and OpenAI of AMD AI GPU computing power totaling 6 GW in the next few years - with cooperation on a scale reaching billions of dollars; despite recent calls from the US Congress for the Trump administration to expand its ban on exporting semiconductor equipment to China, the market news about chip giants and AI leaders can be described as a major positive for the entire chip industry chain, far outweighing any negative effects. The prices of high-performance storage products in the global DRAM and NAND series have recently skyrocketed, and the far exceeding market expectations 455 billion US dollars contract reserve of the global cloud computing giant Oracle Corporation, as well as the announcement of strong performance and future outlook by the global AI ASIC chip "super overlord" Broadcom Inc., greatly reinforced the narrative of the "long-term bull market" for AI GPU, ASIC, HBM, data center SSD storage systems, liquid cooling systems, core power equipment, and other AI computing infrastructure sectors. The demand for AI computing power driven by generative AI applications and AI intelligent agents can be described as "vast as the stars and the sea," and is expected to drive exponential growth in the artificial intelligence computing power infrastructure market. The "AI inference system," in particular, is believed to be the largest source of future revenue for NVIDIA Corporation by Huang Renxun. Looking ahead, based on the chip market research reports from Wall Street financial giant Goldman Sachs Group, Inc. and the World Semiconductor Trade Statistics organization (WSTS), among others, it is clear that under the unprecedented global AI investment boom, chips could still be one of the most shining sectors in the global stock market from a long-term investment perspective. The collaboration of NVIDIA Corporation with its long-time rival Intel Corporation, as well as NVIDIA Corporation with OpenAI and AMD with OpenAI, can be seen as pushing the "data center CPU+GPU platform" to a higher dimension. EDA software/equipment/packaging/interconnection stands to benefit first, and for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, known as the "king of chip fabrication," it is also a short- to medium-term catalyst for good. Wells Fargo & Company points out that all news about catalyzing advanced process AI chip production capacity is positive and forward-looking for semiconductor equipment. The institution states that the more complex and powerful CPU/GPU package heterogeneity updates will significantly boost the structural demands for EUV/High-NA lithography machines, advanced packaging equipment, and detection measurement. This is especially favorable for ASML Holding NV ADR, Applied Materials, and KLA. Semiconductor Equipment - The Big Winner of the AI Boom Semiconductor equipment is undoubtedly one of the biggest beneficiaries of the unprecedented AI wave since 2023, and is expected to benefit long-term from the AI boom, especially with the unprecedented product combination of x86+NVIDIA Corporation GPU under the joint hands of NVIDIA Corporation and Intel Corporation. This will inevitably drive the demand for x86 architecture CPUs and NVIDIA Corporation AI GPU computing clusters in the future chip industry chain, potentially leading to a stronger demand for semiconductor equipment and packaging equipment. Compared to chip giants such as NVIDIA Corporation, Broadcom Inc., and Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, which global investors are focusing on, these leaders in the semiconductor equipment field can be considered the "low-key winners" of this unprecedented wave of enthusiasm for AI among global enterprises. The demand for high-performance AI chips at 3nm and below is incredibly strong globally, and in Wells Fargo & Company's view, this explosive demand is likely to last at least until 2027. Therefore, chip manufacturers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Samsung, and Intel Corporation will need to expand their production capacity for 3nm and below advanced process chips and advanced packaging, as well as storage giants such as SK Hynix and Micron needing to expand their HBM and enterprise-level NAND capacity, all of which will require a large volume of purchases of semiconductor equipment for chip manufacturing and advanced packaging, with some core equipment needing frequent updates. After all, AI chips have higher logic density, more complex circuit designs, and higher power and precision requirements for devices, which may lead to higher technical requirements in EUV/High-NA lithography, etching, film deposition, multi-layer interconnection, and thermal management, requiring custom manufacturing and testing equipment to meet these demands. Therefore, ASML Holding NV ADR, Applied Materials, and Lam Research, among other semiconductor equipment giants, hold the "key to chip manufacturing." The "Three Musketeers of Semiconductor Equipment" in the eyes of Wells Fargo & Company - Applied Materials, ASML Holding NV ADR, and KLA In the latest research report, Wells Fargo & Company raised the target stock price of Applied Materials, Inc. (AMAT) from $240 to $250, and maintained a "hold" rating. Applied Materials' stock price has risen by over 36% this year, significantly outperforming the S&P 500 and Nasdaq 100 indices. As of the closing of the US stock market on Thursday, Applied Materials' stock price was around $220. In chip factories, Applied Materials has a ubiquitous presence. Unlike ASML Holding NV ADR, which has always focused on lithography, Applied Materials, headquartered in the United States, provides high-end equipment that plays a critical role in almost every step of chip manufacturing. Its products cover important chip manufacturing processes such as atomic layer deposition (ALD), chemical vapor deposition (CVD), physical vapor deposition (PVD), rapid thermal processing (RTP), chemical mechanical polishing (CMP), wafer etching, and ion implantation. Applied Materials has high-precision manufacturing equipment and customized solutions for hybrid bonding and through silicon via (TSV), two major chiplet advanced packaging processes, which are crucial for Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's 2.5D and 3D advanced packaging steps. Gary Dickerson, President and CEO of Applied Materials, recently stated that HBM and advanced packaging manufacturing equipment will be strong long-term growth vectors, and new chip manufacturing node equipment such as GAA (gate-all-around)/Backside Power Delivery (BPD) will be the core drive of the company's next round of strong growth. Wells Fargo & Company reiterated its "hold" rating on ASML Holding NV ADR and raised its target price significantly from $890 to $1105. ASML Holding NV ADR's stock ADR has risen by as much as 40% this year, and as of the closing of the US stock market on Thursday, ASML Holding NV ADR's stock price was around $980. Wells Fargo & Company emphasized that in the era of the 2nm process, the demand for High-NA lithography machines from ASML Holding NV ADR will be the strong driving force behind the company's performance and stock price growth. ASML Holding NV ADR's stock has entered a comprehensive rally since September, driven by the deployment of High-NA from lab verification to chip manufacturing and investment in Mistral AI. Wells Fargo & Company stated that with the strong expansion of demand for High-NA EUV lithography machines led by chip manufacturing giants such as SK Hynix, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Samsung, and Intel Corporation, High-NA has transitioned from the initial validation stage to the chip manufacturing deployment stage, ASML Holding NV ADR is expected to return to a track of "strong compound growth." For Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, Intel Corporation, Samsung Electronics, and their 2nm and below node manufacturing technologies currently under development, ASML Holding NV ADR high-NA EUV lithography machines are extremely important. High-NA's 0.55 NA, combined with non-telecentric optics, brings new boundaries in resolution, mask, and process integration, making High-NA a powerful tool to accelerate advanced nodes, reduce multiple patterning, and improve line width/overlay. For KLA, Wells Fargo & Company raised its target stock price from $920 to $1115. KLA's stock price has risen by over 70% this year and closed near $1053 on Thursday. Compared to ASML Holding NV ADR and Applied Materials, KLA focuses on the detection phase. Especially in the areas of chemical process control and chip yield monitoring, its breakthroughs in wideband plasma optical inspection technology and advanced chip defect inspection systems provide semiconductor manufacturers with more powerful tools to improve production efficiency and product quality. Its advanced technology and equipment occupy an important position in the industry and are widely used in various semiconductor manufacturing processes.