AMD, Nvidia, others in focus as KeyBanc discusses impact of AI, tariffs, China on chips
Apr. 08, 2025 7:42 AM ET
By: Chris Ciaccia, SA News Editor
The broader semiconductor sector was in focus on Tuesday as KeyBanc Capital Markets discussed several themes relevant to the space, including artificial intelligence, tariffs and China after a recent survey.
“Our quarterly supply chain findings were mixed,” analysts of the firm wrote. “In analog, most end markets are muted, but tariff related pull-ins represent a [near-term] incremental tailwind, with China remaining resilient, offsetting weak [North America and Europe]. While AI demand remains robust, we’re seeing multiple cross currents across the sector in both GPUs and AI ASICs. While iPhone demand is stable, Android demand sustains given the extension of subsidies in China.”
Subsector thoughts
Delving deeper, the analysts said that the feedback from the analog part of the market was focused on tariff risks, as channel partners highlighted both the worries associated with the levies and pull-ins associated with sub system products and components.
“As a result, we believe this represented a broad-based incremental tailwind to analog in 1Q,” the analysts added.
Additionally, they noted that demand in China seems to have been sustained in the first-quarter in areas such as smartphones and autos, whereas demand in U.S. and Europe “remains soft.”
Nvidia, AMD and Intel
The AI theme continues to be largely dominated by Nvidia (NASDAQ: NVDA), as the analysts noted that Blackwell production is ramping well and chip-on-a-wafer substrate demand is stable.
“We’re not seeing any additional supply chain cuts to NVDA’s [chip-on-a-wafer substrate] supply since the beginning of the year and believe NVDA’s [chip-on-a-wafer substrate] supply of 385K interposers should support 2025 GPU volumes of 5M-5.5M this year,” the analysts explained. “However, GB200 rack shipments continue to disappoint, as we believe F1Q shipments are likely to be [less than] 1K vs. projected shipments of 2K.”
The same can't be said for AMD (NASDAQ: AMD), which KeyBanc downgraded to Sector Weight from Overweight, citing concerns about the sustainability of its China AI business.
Other concerns include a potential price war with Intel (NASDAQ: INTC), which could impact gross margins; “limited” opportunities for AMD to gain share compared to Intel and Intel's progress on its 18A manufacturing process.
“While the stock is relatively inexpensive, trading at 13x our 2026 EPS estimate, semiconductor stocks rarely work with risk to [gross margins], which we are increasingly concerned about given the aggressive price cuts by INTC,” the analysts added.
Other findings
Other findings from the supply chain survey include positives for Micron Technology ( MU) and Qualcomm ( QCOM) (higher memory usage and strong Android handset demand in China); mixed for Analog Devices ( ADI), Texas Instruments ( TXN), NXP Semiconductors ( NXPI), Microchip Technology ( MCHP), Arm ( ARM), Broadcom ( AVGO) and Monolithic Power Systems ( MPWR); and negative for Marvell ( MRVL), ON Semiconductor ( ON) (concerns about “significantly lower” Amazon ( AMZN) Trainium volumes and issues related to Tesla ( TSLA), respectively). |
