The global semiconductor industry is undergoing a remarkable transformation in 2024, fueled by advancements in AI chipsets, data center GPUs, chiplets and next-generation memories. This evolution is unlocking unprecedented possibilities across various sectors, from automotive and high-performance computing (HPC) to consumer electronics and healthcare.

Sales data from the Semiconductor Industry Association reflects this trend, with semiconductor sales showing strong year-over-year growth of 16.3% and 15.2%, respectively, in February and January.

Generative AI, along with advancements in chiplet technology, is driving demand for specialized AI chips, essential for large language models. These chips are essential for handling intensive parallel processing tasks, leading to increased demand from cloud service providers, researchers, and creative firms. Chiplets, with their modular design and superior performance, are revolutionizing the industry by reducing costs and increasing scalability.

An uptick in PC shipments and signs of recovery in memory spending, particularly in NAND and DRAM, are expected to have contributed to the sector's momentum. In the first quarter of 2024, global PC shipments grew 1.5% year over year, driven by AI PCs and semiconductor advancements. According to the International Data Corporation (IDC) report, 59.8 million units were shipped in the first quarter of 2024, which marked a return to pre-pandemic levels.

In 2024, next-generation memory technologies such as High Bandwidth Memory (HBM), a graphics DDR memory known for its high performance, capacity, low latency, and energy efficiency, have become a market leader. Samsung, SK Hynix, and Micron are dominating the HBM market and there are plans to launch HBM3e and potentially HBM4 in the coming years.

Despite the industry's growth, challenges such as talent shortages persist. Layoffs in major companies like Intel and Qualcomm underscore the need for a specialized workforce. However, significant growth opportunities, particularly in the integrated circuit (IC) and memory IC segments are expected to have driven growth in the semiconductor industry.

Insight Into Key Releases

Investors interested in the semiconductor industry are eagerly awaiting the quarterly earnings releases of players like Qorvo (QRVO Quick QuoteQRVO - Free Report) , Wolfspeed (WOLF Quick QuoteWOLF - Free Report) , Monolithic Power Systems (MPWR Quick QuoteMPWR - Free Report) and Advanced Energy Industries (AEIS Quick QuoteAEIS - Free Report) , scheduled to be released on May 1.

Per the Zacks model, a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today's Zacks #1 Rank stocks here.

Qorvo: This top supplier of radio frequency solutions is anticipated to have experienced revenue expansion fueled by robust demand within the Advance Cellular Group (ACG). It is supported by the rollout of state-of-the-art solutions targeting burgeoning markets like electric vehicles, energy storage, and solar power applications. The transition from legacy mechanical systems to active electronics scanning systems is driving growth in the defense and aerospace business. Growing demand for DOCSIS 4.0 hybrid power doublers is supporting growth in the infrastructure business. Management's approach of blending innovation with strategic acquisitions to fortify the product lineup is seen as a favorable move. (Read more: Will Top Line Expansion Boost Qorvo's Q4 Earnings?)

The Zacks Consensus Estimate for QRVO’s fourth-quarter fiscal 2024 earnings per share is pegged at $1.21 per share, unchanged over the past 30 days. The Zacks Consensus Estimate for total revenues is pegged at $925.44 million, suggesting 46.3% growth from the year-ago quarter.

The combination of a Zacks Rank #3 and an Earnings ESP of 0.00% makes surprise prediction difficult. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 76.41%.

Wolfspeed: The company has transitioned into a dedicated silicon carbide provider through strategic portfolio optimization efforts. Positioned as a leading silicon carbide device supplier for the next five years, it has been benefiting from being an early adopter with significant advantages in 200-mm wafer volume production —1.7 times larger than the industry standard of 150 mm.

Wolfspeed forecasts revenues of approximately $20-$30 million from the Mohawk Valley fab in the fiscal third quarter. Strong design-ins, particularly within the automotive sector, indicate promising prospects ahead. However, continuing supply chain constraints, weakness in the industrial and energy domain in China and Asia, and stiff competition are major headwinds.

The Zacks Consensus Estimate for WOLF’s third-quarter fiscal 2024 earnings per share is pegged at a loss of 64 cents per share, unchanged over the past 30 days. The Zacks Consensus Estimate for total revenues is pegged at $201.49 million, suggesting an 11.9% decline from the year-ago quarter.

The stock’s combination of a Zacks Rank #3 and an Earnings ESP of 0.00% makes surprise prediction difficult. The company’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average negative surprise being 15.48%.

Monolithic Power Systems: The company is anticipated to report a decrease in revenues compared to the previous year, primarily due to sluggish demand trends observed in the Consumer, Communications, and Industrial sectors. However, a bright spot emerges in the form of robust momentum within the Enterprise Data segments. The company is experiencing notable traction in its power management offerings tailored for AI GPU applications, alongside sustained demand for its CPU data center solutions. These factors are presumed to have bolstered net sales within the Enterprise Data sphere. Monolithic Power is actively bolstering its portfolio by introducing innovative products to the market and accelerating the acquisition of design wins across its diverse customer base. Additionally, efforts to diversify the operational landscape serve as a positive influence. (Read More: Will Weak Revenues Hurt Monolithic Power's Q1 Earnings?)

The Zacks Consensus Estimate for MPWR’s first-quarter 2024 earnings per share is pegged at $2.66 per share, up 0.8% over the past 30 days. The Zacks Consensus Estimate for total revenues is pegged at $447.76 million, suggesting a 0.73% decline from the year-ago quarter.

The stock has a combination of a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 0.52%.

Advanced Energy Industries: AEIS's noteworthy expansion is evident with the launch of 20 new products across its markets. Steady demand for high voltage and strong design wins in etching and deposition have been contributing well. An upgraded MAXstream remote plasma source and strategic design wins in various markets highlight AEIS' market versatility. The NeoPower family of configurable power supplies and year-end telecom shipments is expected to boost AEIS’ top-line growth in the near term. However, the company has been suffering from weakness in Industrial & Medical and Data Center Computing end-markets. Challenging macroeconomic conditions and unfavorable foreign exchange have been major headwinds.

The Zacks Consensus Estimate for AEIS’ first-quarter 2024 earnings per share is pegged at 71 cents per share, unchanged over the past 30 days. The Zacks Consensus Estimate for total revenues is pegged at $357.3 million, suggesting a 15.9% decline from the year-ago quarter.

The stock has a combination of a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. The company’s earnings beat estimates in the trailing four quarters, the average surprise being 8.16%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.