Wells Fargo expects chip industry downturn to bottom in H1 2023

Ambarella

09/01/2023 15:18

(Updates)
    ** Downturn in the chip industry due to demand weakness is
likely to deepen and bottom through the first half of this year,
say Wells Fargo analysts, anticipating a recovery in the second
half of the year
    ** "This 'bottoming event' could be the queue for investors
to get back into the chip sectors," Wells Fargo says in a note
    ** Analysts expect demand across memory, handset and PC
markets to start rebounding towards the end of the first half of
this year at a time when China demand is also expected to
recover after reopening
    ** Wells Fargo says it remains bullish on automotive chip
market, with NXP Semiconductors NV  NXPI.O , Allegro
MicroSystems Inc  ALGM.O , Wolfspeed Inc  WOLF.N  and Ambarella
Inc  AMBA.O  as its "top ideas"
    ** "We are bullish on the near-term cyclical trends relating
to the continued recovery in light vehicle production" - Wells
Fargo 
    ** ALGM, NXPI and WOLF up between 0.5% and 2.9% 
    ** Shares of other chipmakers Advanced Micro Devices
 AMD.O , Nvidia Corp  NVDA.O , Intel Corp  INTC.O  and Qualcomm
Inc  QCOM.O  rise between 1.7% and 5.9%
    ** The Philadelphia SE Semiconductor index  .SOX  is up 3.1%
amid broader market optimism around China reopening its borders
 .N 
 (Reporting by Tiyashi Datta and Chavi Mehta in Bengaluru)
 ((tiyashi.datta@thomsonreuters.com))