AI is a clear catalyst for SOXQ. It has contributed to a nearly 67% gain for the ETF over the past 12 months. Some market observers believe prior estimates for chip demand tied to AI are likely to prove too conservative.
“In January, Deloitte projected that global semiconductor chip sales, led by AI chips, would grow 13% in 2024 to the highest level on record. The market for AI chips has grown from close to zero in 2022 to a projected $50 billion in 2024, and by 2027, it could account for half of the entire chip market,” reported Jakob Zinkula for Business Insider.
Due to domestic jobs growth from the semiconductor industry, companies — including SOXQ member firms — may see those roles increase. The Semiconductor Industry Association noted U.S. universities educate more than 100,000 masters-level semiconductor professionals each year. They ultimately return to their home countries instead of remaining in the U.S.
AI could be helpful regarding removing the red tape that hampers more chip production facilities in the U.S.
“ … it appears the buzz around generative AI — and the surging demand for chips that power it — is turning things around. This could benefit a variety of US companies in the chip production supply chain. [It] could provide more jobs for Americans, and help the US bring chip production closer to home,” according to Business Insider.
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