The semiconductor sector experienced a remarkable year of growth in 2023, with the VanEck Semiconductor ETF (SMH) soaring by 73.4%. The surge in this sector can largely be attributed to the artificial intelligence (AI) revolution, which propelled stocks like Nvidia and Advanced Micro Devices to significant gains. However, there are other chip companies that have not received as much attention but still hold tremendous value.
One such company is Taiwan Semiconductor Manufacturing (TSM), the world’s largest chip foundry. Despite having a modest gain of 42.3% in 2023, TSM is trading at an attractive price-to-earnings ratio and is a dominant player in the industry. TSM manufactures chips for some of the biggest names in the market, including Nvidia, AMD, and Apple. The company has shown resilience in the face of market challenges and is expected to witness strong growth in the coming years.
On Semiconductor (ON), a leader in silicon carbide power chips for electric vehicles (EVs), is another undervalued gem. The EV market experienced a temporary slowdown in 2023, causing a dip in ON’s stock price. However, the long-term growth prospects of the EV market remain intact, and ON is well-positioned to benefit from this trend. The company’s cutting-edge technology and plans for margin improvement make it an attractive investment opportunity.
Investors should also consider Kulicke and Soffa (KLIC), a chip packaging company that plays a crucial role in connecting chips together on a motherboard. While chipmakers receive much of the attention, packaging companies like KLIC are integral to the development of efficient and powerful chips. As chips become more complex, advanced packaging technologies gain significance. KLIC’s market dominance in legacy packaging equipment, coupled with its foray into newer technologies, positions it as a valuable player in the semiconductor sector.
In conclusion, while semiconductor stocks have witnessed significant growth recently, there are still undervalued options worth exploring. Taiwan Semiconductor Manufacturing, On Semiconductor, and Kulicke and Soffa present opportunities for investors seeking exposure to this red-hot sector. As the demand for advanced chips and packaging technologies continues to rise, these companies are poised to deliver strong growth in the years ahead.
The source of the article is from the blog portaldoriograndense.com