The semiconductor segment has seen an extraordinary surge in recent years as artificial intelligence, data center demand and digital transformation fuel relentless growth. This has driven prices and valuations to levels that increasingly reflect future expectations rather than current earnings. With the market pricing in extended technological dominance, questions arise over whether today’s multiples can be sustained without meaningful shifts in fundamental performance and competitive dynamics.

The semiconductor sector has had a period that is outside of normal cycles. While previously sentiment around chips typically revolved primarily around consumer electronics and supply cycles, recent years have shifted the center of gravity of demand toward infrastructure, thus:

• data centers,

• accelerated computing (AI/HPC),

• network elements,

• high value-added memories.

The result is a combination of rapid growth in AI revenues and a massive investment race across the supply chain. From foundry capacity(…