7 Stocks That Will Survive The Semiconductor Shortage Long-Term

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Semiconductor stocks have been in the limelight during the ongoing chip shortage, which has been affecting a range of firms, especially in the tech and automotive sectors. Chips have had a significant impact on technology and innovation in the past several decades. Today, we find chips in items ranging from smartphones, to air conditioners, fridges, LED bulbs, rice cookers, TVs and cars, including electric vehicles (EVs). Therefore, today’s article discusses seven stocks that will survive the semiconductor shortage long-term. Recent research published in the Software Quality Professional highlights, “The semiconductor industry has been a model for innovation over the last couple of decades. The complexity of integrated circuit (IC) designs has increased, and the process to produce them has become more challenging due to variable market demand.” Most InvestorPlace.com readers are familiar with the fact that the semiconductor sector is mostly based on an outsourced manufacturing model. Put another way, most semiconductor firms design chips in-house that then get manufactured elsewhere. This type of fabrication is commonly referred to as “fab” or “foundry.” As a cyclical industry, the semiconductor sector goes through periods of booms and busts. Developments in artificial intelligence (AI), the Internet of Things, (IoT), and machine learning will increase the global demand for chips. Analysts concur the surging demand, especially the pandemic, for consumer electronics and EVs have in part contributed to the current shortage. Over the past year, chip shares have been firing on all cylinders. The widely-followed PHLX Semiconductor Sector Index returned about 129% in the past 12 months. The chip industry is extremely important for our economy. According to a joint report by the Semiconductor Industry Association and the Boston Consulting Group, “The US semiconductor industry has long been the global semiconductor leader, consistently accounting for 45% to 50% of global revenues.” Furthermore, “Growth in global semiconductor demand is projected to require a 56 percent increase in manufacturing over the next 10 years.”

With that information here are seven stocks as semiconductors continue to make the headlines: Applied Materials (NASDAQ:AMAT) Hyundai Motor Company (OTCMKTS:HYMTF) Kulicke & Soffa Industries (NASDAQ:KLIC) Microsoft (NASDAQ:MSFT) Nvidia (NASDAQ:NVDA) Taiwan Semiconductor Manufacturing (NYSE:TSM) Texas Instruments (NASDAQ:TXN)