Buy These Semiconductor Stocks and Thank Me Later

semiconductor stocks

Our thirst for bigger, faster, and better technology seems endless.  Semiconductor stocks have been among the best performers over the last five years. Demand for chips and semiconductor equipment is growing at a rapid pace thanks to emerging technology like artificial intelligence, the blockchain, medical devices, smartphones, wearables, virtual reality, cloud, IoT, augmented reality, gaming, autonomous driving, and much more.

More Businesses rely on powerful computing systems to process and analyze data than ever before.  The semiconductor space is a $412B global industry according to KPMG.  That said, estimates moving forward remain bullish on the sector. According to some analysts, the global semiconductor market is set to reach $831.5B in 2024, that’s growth of upwards to 100%

During 2018 the most significant increase is expected across memory, analog ICs, and optoelectronics,  according to  World Semiconductor Trade Statistics.

The semiconductor space is enormous. It’s often broken down to sub-sectors like broad line, equipment and materials, integrated circuits, memory chips and specialized.

Let’s take a look at some of the best semiconductor stocks in the market today.

Best Semiconductor Stocks To Buy – Broad Line

Integrated Device Technology, Inc. (NASD: IDTI) develops system-level semiconductor solutions for the communications, computing, consumer, automotive, industrial, and industrial end-markets.

The company specializes in RF, high-performance timing, memory interface, real-time interconnect, optical interconnect, wireless power, and smart sensors. It’s a significant player in sensor and wireless technology, two areas that will see increased demand from the automotive industry.

Its been able to boost revenues every year from 2014 to 2018. No surprise that IDT is an M&A target.

Advanced Micro Devices, Inc. (NASD: AMD) has been one of the top performing stocks in 2018. It operates in two segments- computing and graphics.

amd semiconductor stocks

source: AMD

AMD makes some of the most popular processors and graphics cards for the gaming industry. In addition to gaming, its GPUs will play a significant role in emerging technologies like virtual reality, augmented reality, and cloud data centers.

Nvidia Corporation (NASD: NVDA) has been one of the best-performing stocks over the last decade. It has seen its revenues rise in the following areas: AI and cloud data centers, autonomous machines, and gaming to name a few.

The company invented the GPU, an important piece that leads the PC gaming revolution. Today, GEFORCE is the world’s largest gaming platform. Besides, its GPU computing will play an essential role in powering data centers, AI for driving and intelligent machines.

Semiconductor Stocks- Equipment & Materials

Brooks Automation, Inc. (NASD: BRKS) supplies automation solutions for semiconductor manufacturing, clean energy, life science drug discovery, biobanking, and related markets.

Its semiconductor and cryogenics services include repairs and exchanges for robots, CTI cryopumps, and compressors.

Cree, Inc. (NASD: CREE) is a market leader in lighting-class LEDs, LED lighting and semiconductor solutions for wireless and power applications.

The company made headlines in 2014 when it introduced the industry’s first 1700V SIC half-bridge module that delivers SIC switching speed and energy efficiency to solar, EV, and some industrial power supplies.

Universal Display Corporation (NASD: OLED)  

oled semiconductor stocks

source: Apple Inc.

A global leader in the OLED industry its technology is in some iPhones, Samsung’s Galaxy series and LG’s OLED TVs. The company believes that OLEDs have the potential to offer power efficiencies that are far superior to incandescent bulbs and fluorescent tubes.

The company has been able to grow revenues consistently over the last five years.

ASML Holding N.V. (NASD: ASML) provides chipmakers with hardware, software, and services. It mass produces patterns on silicon, helping to increase the value and lower the cost of the chip.

Its most coveted technology is the lithography system, it brings together high-tech hardware and advanced software to control the chip manufacturing process down to the nanometer.

Now, when it comes to size, its massive, the company has over 19k employees with more than 60 offices in 16 countries. It is one of the largest international companies in the world by market cap and headquartered in the Netherlands.

Semiconductor Stocks – Integrated Circuits

Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) is the world’s largest semiconductor foundry, manufacturing 9,920 different products using 258 different technologies for more than 465 customers in 2017.

TSMC-manufactured semiconductors are in applications covering the following segments: computer, communications, consumer, industrial and standard semiconductor markets.

It has seen its EPS and revenues rise year over year. TSMC is one of the largest companies in the world; it offers income investors an excellent dividend at $1.35 per share.

Applied Optoelectronics, Inc. (NASD: AAOI) is a provider of fiber-optic networking products. The company focus is on the following markets: internet data centers, cable television broadband, fiber-to-the-home, and telecommunications.

The company had a breakout year in 2017, increasing EPS by nearly double and sales rose by 46% from the previous year.

Skyworks Solutions, Inc. (NASD: SWKS) a key figure in wireless networking, its analog semiconductors connect people, places, and things. The company is involved in Philips’ CityTouch, a secure and connected lighting management platform for smart cities. Skyworks is providing connectivity solutions to the CityTouch project.

skyworks semiconductor stocks

That said, the company has clients in aerospace, automotive, broadband, cellular, infrastructure, industrial, medical, military, smartphone, tablet and wearable markets.

Its clients include Netflix, Twitter, Amazon, Starbucks, eBay, YouTube, Alibaba, Google Maps, and much more.

Besides, the company is at the forefront of 5G data technology which will be essential for machine learning, virtual reality, augmented reality, autonomous vehicles, industrial IoT and much more.

Semiconductor Stocks- Memory

The undisputed champ in the memory space remains Micron  Technology (NASD: MU). Its products include memory, storage, advanced solutions, storage platforms. 3D XPoint Technology is garnering plenty of attention for the firm. It allows you to turn massive amounts of data into valuable insights in real time.

Micron’s customer base includes automotive, consumer, IoT, financial, government, industrial, mobile and networking. Micron offers solutions for client storage, cloud, data center, mobile, and networking.

The company has been able to see its revenues rise from 2016 to 2018 as well have its EPS more than double from 2017’s numbers.

Bottom Line

The semiconductor space is among the fastest growing in the economy. Our thirst for data and speedier computing should keep this sector interesting for the coming years. As an investor, you’ll want to follow semiconductor stocks closely because the competition is tight. A new player could emerge and take market share from someone else, as witnessed by the sudden rise in Nvidia over the last five years.

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