Semiconductor Index Soars... Super Boom Continues into the New Year

12% Increase Since New Year... Impact of Surging Demand and Price Rise

[Asia Economy Reporter Jeong Hyunjin] The global semiconductor index continues its soaring trend into the new year following last year. This is due to expectations that the semiconductor market's super boom will last for a considerable period as sales of computers, smartphones, and automobiles increase.

According to Yahoo Finance and others on the 21st (local time), the Philadelphia Semiconductor Index closed at 3132.17 on the New York Stock Exchange, rising 1.53% compared to the previous day. This index fell to 1298.54 in March last year due to the impact of the COVID-19 pandemic but surged more than 115% to 2795.5 by the end of the year. It has risen 12.04% since the beginning of this year.

This index is composed of the stock prices of the top 30 semiconductor-related companies by market capitalization listed on the U.S. stock market, including Nvidia and Intel, and is considered a barometer of the global semiconductor economy. The Philadelphia Semiconductor Index, which was around 1000, surpassed the 2000 mark in mid-last year as liquidity supply boosted the stock market, and this year it also broke through the 3000 mark. Bloomberg reported, "Semiconductor stocks are experiencing the best January in nine years, driven by price increases and a surge in semiconductor chip demand due to expanded consumption."

The semiconductor industry is indeed enjoying a boom. Due to the COVID-19 pandemic, sales of computers and smartphones increased, and recently, as more consumers purchase automobiles, demand for automotive semiconductors has surged, causing even shortages. In Japan and Europe, some automobile manufacturers have halted factory operations. Additionally, with rising prices of key products such as DRAM spot prices, semiconductor companies are expected to achieve greater earnings for the time being.

Chris Caso, a researcher at the U.S. investment bank Raymond James, said, "Investors know that this is a season when semiconductors will generate significant profits," and evaluated, "The supply-demand imbalance will definitely be positive for semiconductor suppliers."