Deal activity in chip sector likely to pick up in 2025, J.P.Morgan says

Arman Holdings

18/12/2024 12:34

** J.P.Morgan says deal activity in the chip sector has
slowed over the past several years given the macro environment,
but it expects M&A to potentially pick up in 2025
    ** In 2024, the overall semiconductor cycle continued to
slowly improve; however, diverging trends were observed between
AI and non-AI semiconductor businesses - J.P.Morgan
    ** AI compute, networking and custom chip businesses have
benefited from a strong AI infrastructure build-out, which has
resulted in share price outperformance and a positive earnings
trend - JPM 
    ** Analog devices, microcontroller units and semiconductor
capital equipment providers have underperformed on slower
end-market recovery as concerns increase around softer demand
and geopolitical uncertainty, which is, however, expected to
improve in the second half of 2025 - JPM
    ** Demand for chip design software tools from Synopsys
 SNPS.O  and Cadence Design Systems  CDNS.O  remains strong 
driven by rising chip complexity and strong chip design activity
    ** Strong AI server spending benefits Nvidia  NVDA.O , Arm
Holdings  O9Ty.F  , Advanced Micro Devices  AMD.O , Marvell
Technology  MRVL.O  and Broadcom  AVGO.O  

 (Reporting by Priyanka.G in Bengaluru)
 ((priyanka.g@thomsonreuters.com;))