A Great Time to Be Alive
As 2025 opens with Los Angeles aflame and the world fraught with a crisis of the old political order, emerging is a future of supreme promise in new technology. From the physics and finance of microchips to the launch of hyperscale computers and the exa-fabric of the “Internet of Things,” the new year portends a new world of wonders and wealth.
While microchip revenues are projected to hit $1 trillion by the decade’s end, on the horizon looms an epoch beyond chips. Companies such as Tesla (TSLA), Cerebras, and Taiwan Semiconductor Manufacturing Corporation (TSM) forge forward with breakthroughs in “wafer-scale integration,” where the entire foot-wide silicon wafer becomes a coherent system.
In store is an epoch of exascale (a trillion times a trillion) computations a second at radical savings in energy use and heat emissions. Enabling such a miracle will be wafer-scale planar layers of 2D graphene on silicon carbide that switch a thousand times faster than silicon.
An overture to this explosion of innovation is the record-setting pace of global semiconductor sales, which hit a record of $57.8 billion during November 2024, according to the Semiconductor Industry Association. That’s 20% more than the November 2023 total of $47.9 billion and represents a run-rate of $694 billion. That rate is all but certain to pass the $700 billion threshold early this year. (It may have already happened.)
In our Gilder Technology Report we have been banging the table all during the great semiconductor slump for our readers to buy “chips on the dip.” Those who did, just in 2024, saw gains as high as 300% for Taiwan Semiconductor (TSM) or 450% for Nvidia (NVDA). We’ve had losers too, the most painful probably being Intel (INTC). But for the most part even the losers vindicated our core thesis: The semiconductor industry is at an inflection point as machine intelligence flies off your desk to impregnate essentially every man-made device. Combined with advanced sensors feeding into distributed AI models and actuators then instructed by those models, we are witnessing nothing less than the animation of the machines.
Happily, U.S. companies remain not only the world’s greatest chipmakers, but the world’s largest consumers and most ingenious users of the most advanced semiconductor devices. That’s crucial because, as ever, the greatest wealth creation comes not from the makers of chips but the users of them, who are driving global GDP well past $100 trillion.
There has never been a better time to be a technology investor. The incumbent methods of chipmaking continue to match or exceed a Moore’s law pace of doubling in productivity every two years (and AI chips are improving even faster). Our analysis in the Gilder Technology Report says the current boom—with no more than usual cyclical pauses—will likely run for several more years. AI will continue its ascent powering continued growth in chip markets and supply chains. We identify the incumbent companies you should be holding at least for the next two years.
That’s 2025. The long term will be dominated by new paradigms, including not only such breakthroughs as wafer scale computing, but dramatic changes in the architecture and environments in which these devices function. Costs will plummet and productivity soar not only in the semiconductor industry but across the world economy.
And here is great news. A select group of incumbent semiconductor leaders are also leading the way to the new generation. (A less select group are not!) Buying into these favored few now, investors may reap the benefits of both the current boom, and the next, even bigger wave to come. That’s the big story unfolding this year in the Gilder Technology Report.
P.S. I will be holding a special subscribers-only teleconference TODAY at 2 p.m. EST entitled “The Evolution of Artificial Intelligence (AI).” The event is free, but you have to register here to be able to attend. Don’t miss out!