The 2024 valuation multiples for 103 global semiconductor companies listed on major US exchanges was as follows: median revenue multiple of 3.7x, median EBITDA multiple of 18.3x, and median PE ratio of 25.6x.
In 2024, the semiconductor industry experienced significant developments, particularly in artificial intelligence (AI) and geopolitical dynamics. AI applications like generative AI, drove record sales, with the industry reaching a new peak in November 2024.
Companies like Nvidia, AMD, and Intel intensified their competition in the AI chip market. However, geopolitical tensions and government regulations introduced uncertainties, including export restrictions and supply chain challenges.
Semiconductor Valuation Multiples
With a surge in AI and the necessary semiconductor chips required to operate and advance AI, semiconductor valuation multiples were trading at an all-time high premium in 2024.
The median revenue multiple for 103 semiconductor companies was 3.7x. After removing the extreme outliers, the max revenue multiple in the dataset was still 45.8x.
The ten highest revenue multiples include Nvidia, Broadcom, Marvell, Arm Holdings, and smaller companies like Astera Labs, Impinj, Universal Display Corporation.
There isn’t a trend of company size and revenue multiple, but there is a trend between company size and EBITDA multiple. The EBITDA multiples are higher as the company’s revenue exceeds $10 billion. The higher EBITDA multiples for bigger companies might be attributed to the fact that they have higher EBITDA margins, as shown in the table of company margins below.
Semiconductor Companies Margins
When we look at the semiconductor company margins, the average EBITDA margin is 33% for companies with revenue over $10 billion compared to the average total of 23%.
Similarly, gross margin is higher for companies with revenue over $10 billion. There is something to be said about economies of scale since semiconductors are manufactured at scale and distributed.
The median net profit margin of 15% is on the high end when comparing across industries, especially in industrials.
Semiconductor Industry Outlook 2025
Looking ahead to 2025, the industry anticipates continued growth, fueled by increasing demand for high-performance computing and AI applications. Emerging players are expected to challenge established leaders, potentially leading to more diverse supply chains and innovative solutions. However, ongoing geopolitical tensions and regulatory changes may pose challenges, requiring companies to navigate complex global landscapes.
The Stargate Project is an ambitious initiative announced in January 2025, aiming to invest $500 billion over the next four years to develop advanced artificial intelligence (AI) infrastructure across the United States. This project is a collaboration between OpenAI, SoftBank, Oracle, and MGX, with support from President Donald Trump.
The primary objective of Stargate is to construct state-of-the-art data centers and energy facilities to support the rapid growth of AI technologies. The initial phase includes a $100 billion investment, with construction already underway in Abilene, Texas. Over the next four years, the project plans to expand its infrastructure to accommodate the increasing demands of AI systems, including generative AI models and neural networks.
The Stargate Project is expected to have a significant impact on the semiconductor industry. The development of advanced data centers will drive substantial demand for high-performance chips, benefiting semiconductor manufacturers. Companies like Nvidia and Broadcom have already experienced stock rallies following the project’s announcement.
Analysts predict that a considerable portion of the $500 billion investment could be allocated to purchasing advanced chips, with estimates suggesting that Nvidia alone could receive over $100 billion from this initiative. This influx of investment is anticipated to stimulate growth and innovation within the semiconductor sector, as companies strive to meet the heightened demand for cutting-edge technology.
Refresher: How to value a company using revenue multiple or EBITDA multiple.
Download Data Set
To download the 103 companies data set in this analysis, enter your email address below to sign-up for the mailing list and the data set will be sent to your email directly. In some cases, it takes a few hours or a day to receive the email with the data set.