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Semiconductor Sales Rise YoY in November: 4 Solid Picks

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Global semiconductor sales jumped in November, according to the Semiconductor Industry Association (“SIA”). The global semiconductor industry, which plays a key role in the high-growth technology space, has been relatively less battered by the coronavirus pandemic, and the November figures once again prove that.

Moreover, with sales of smartphones once again rebounding and the ongoing 5G boom, the semiconductor industry might stand to gain in the near term.

Semiconductor Sales Jump YoY

Global semiconductor sales increased 7% in November 2020 to $39.4 billion compared with $36.9 billion in 2019. Also, sales increased 1.1% month over month. Global semiconductor sales in October totaled $39 billion.

Regionally, on a month-over-month basis, semiconductor sales increased 0.1% in China, 3.6% in Europe, 2.1% in Americas and 5.2% in Japan. Similarly, sales increased 12.5% year over year in Americas, 6.5% each in China and Asia Pacific, and 5.1% in Japan.

Semiconductor Industry Poised to Grow

The pandemic saw all the major industries taking a massive hit, most of which are still recovering. However, that hasn’t been the case with the semiconductor industry. However, despite the steady growth, the industry has fallen short of other technology counterparts like Internet and cloud computing.

That said, sales are fast picking up both year over year and month over month for quite some time now. Moreover, smartphone sales, which had slowed down during the early days of the pandemic as shipments got stuck due to lockdowns, have once again started to bounce back with economies trying to get back on their feet.

Besides, China, one of the biggest markets for chipmakers, has also started rebounding. Microchip demand is likely to get a boost with the 5G boom in Europe and parts of Asia, including China and Singapore. Given this scenario, the semiconductor market is likely to continue growing in 2021.

Our Choices

With economies trying to somewhat get back to normal on hopes of the recently approved COVID-19 vaccines, smartphone sales rebounding and the 5G boom, it is likely that semiconductor manufacturers will benefit in the near term. Below are four chip stocks that investors can gain from in the current scenario.

Maxim Integrated Products, Inc. (MXIM - Free Report) is an original equipment manufacturer of semiconductor analog and mixed-signal integrated circuits. The company has a broad product portfolio that includes analog-to-digital converters, amplifiers and comparators, communications devices, data converters, and management components, sensors and wireless products.

The company’s expected earnings growth rate for the current year is 24.8%. Its shares have gained 32.7% in the past three months. Maxim Integrated Products holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NXP Semiconductors N.V. (NXPI - Free Report)  provides high performance mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise. 

The company’s expected earnings growth rate for next year is 33.8%. Its shares have advanced 28.7% in the past three months. NXP Semiconductors carries a Zacks Rank #2.

NVIDIA Corporation (NVDA - Free Report) is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.

The company’s expected earnings growth rate for the current year is 67.7%. The Zacks Consensus Estimate for current-year earnings has improved 6.4% over the past 60 days. NVIDIA holds a Zacks Rank #2.

Vishay Intertechnology, Inc. (VSH - Free Report) is a global manufacturer and supplier of semiconductors and passive components. Its products include metal oxide semiconductor field-effect transistors, Diodes and Optoelectronic Components.

The company’s expected earnings growth rate for next year is 44%. The company’s shares have advanced 35.8% in the past three months. Vishay Intertechnology has a Zacks Rank #2.

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