Recently, I've been watching the semiconductor sector and noticed many people are still debating whether to enter the market. But if you look closely at the market logic, you'll understand—this wave of market activity is far from as simple as it seems.

First, let's talk about why semiconductors are so hot. Frankly, they are the "brain" of modern electronic devices. Without chips, phones, cars, servers—these things are no different from stones. In recent years, AI explosion, 5G rollout, and the popularity of electric vehicles have all benefited the entire industry chain. Especially last year's ChatGPT-driven AI wave, which directly boosted data center and GPU demand. That’s also why NVIDIA has surged so much.

But there's an easily overlooked point: the semiconductor industry cycle is roughly 4 to 5 years, and stock prices usually lead fundamentals by 3 to 6 months. The last full cycle started in the second half of 2019, peaked in October 2021, and bottomed out in 2023. We are now in the middle to late stage of a new upward cycle, meaning—this is not the time to bottom-fish, but to look for structural opportunities based on trend confirmation.

Regarding specific targets, I favor several directions. First is chip design. NVIDIA (NVDA) is undoubtedly the dominant leader, with an AI chip demand estimated at 30,000 units. Its advantages are unmatched. Qualcomm (QCOM) holds 53% market share in 5G baseband chips, with a future market size projected to grow from $100 billion now to $700 billion by 2030—this growth potential is huge. Broadcom (AVGO) has a deep layout in data centers and enterprise applications, expanding its product line through acquisitions, making it a good choice too.

Next is wafer foundry. TSMC (TSM) basically has a monopoly-level position in this area, so it must be a core recommendation among Taiwanese semiconductor stocks. Plus, AMD has seen strong CPU growth in recent years through collaborations with Microsoft and Apple, which is also worth paying attention to.

Finally, don’t forget the semiconductor equipment sector. ASML is absolutely a monopoly in EUV lithography machines; only it can supply globally. This means as long as industry demand persists, only ASML can do the business. Applied Materials (AMAT) and Lam Research (LRCX), as leading equipment suppliers, will continue to benefit from industry upgrades.

Texas Instruments (TXN) is particularly interesting. It’s the world’s largest analog chip manufacturer, with low product substitutability and a deep moat. Decades of R&D and cost control advantages keep it at the forefront. Micron Technology (MU), ranking high in memory chips, with a DRAM market share of 22.52%, is also a key Taiwanese semiconductor stock that shouldn’t be overlooked.

The current issue is that the short-term has become somewhat overheated. My advice is not to chase highs but wait for technical pullbacks or RSI oversold signals to enter gradually. If you are a short-term trader, you can consider buying when the stock price breaks above the 5-day moving average and forms a golden cross with the 10-day, or take partial profits when RSI shows divergence in overbought conditions.

Be cautious of several risks. Macroeconomic instability, interest rate hikes, geopolitical fluctuations could cause short-term volatility. Also, technical competition is fierce—who can stay ahead in advanced process nodes will capture market share. Whether consumer electronics demand can truly recover, and whether the growth in AI computing power is sustainable, all remain to be seen.

In summary, the core logic behind recommending Taiwanese semiconductor stocks still holds. But now, it’s no longer about bottom-fishing; it’s about finding structural buying points within an upward trend. Don’t blindly chase the wind—focus more on fundamentals and patiently wait for pullbacks.