Bank of America: Global chip sales are expected to reach US$544 billion this year
2021-10-09

A persistent global shortage of chips, which has plagued companies from automakers to video game publishers to consumer electronics makers, has also boosted chip companies' sales. Bank of America expects the above-trend growth to continue into next year, and now expects total industry sales to rise 24% in 2021 to $544 billion, up from a previous forecast for a 21% increase.

Bank of America believes that there are three hot spots in the industry: 1. Computing, including cloud services and artificial intelligence as well as games and networks; 2. 3. Automobile; Capital expenditures, including capital expenditures by businesses and governments. Bank of America raised its forecast for global chip sales this year, anticipating growing demand for chips used in computers and cars, and added Nvidia and automotive chip supplier ON Semiconductor to its list of top stocks for the rest of the year.

In computing chips, Bank of America raised its price target on Nvidia to $275 from $260 and said the graphics card maker was a top pick alongside AMD and Marvell. In the automotive chip space, BofA raised its price target on On Semiconductor to $60 from $55 and added it to its list of top picks.

In the capex space, Bank of America named KLA-Tencor its top pick and raised its price target to $450 from $425.