UBS, Barclays Stay Bullish on Semiconductors Despite 8% Drop in Chip Stocks

Semiconductor stocks have slumped in recent sessions, but major investment banks including UBS remain optimistic about the industry's outlook.

BlockBeats reported on July 19 that UBS and Barclays maintained positive views on the global semiconductor industry. The banks did not change their forecasts even after chip stocks weakened this week, with the Philadelphia Semiconductor Index falling about 8%.

UBS expects operating profit for companies in the Philadelphia Semiconductor Index to rise 92% this year from a year earlier. It projects operating profit will grow another 40% next year.

Ulrike Hoffmann-Burchardi, UBS's head of global equities, said demand for artificial intelligence computing continues to outstrip supply. Capacity constraints across the supply chain are also unlikely to ease anytime soon, she said.

Barclays also said it has not seen signs of panic selling in the semiconductor market. The recent selloff in chip stocks appears to be driven more by passive selling tied to portfolio rebalancing than by a broad investor exit.

Separately, World Semiconductor Trade Statistics said the global semiconductor market is expected to grow 90% this year and 27% next year. The industry's year-over-year revenue growth accelerated to 119% in May from 106% in April.