Due to the expanding presence of semiconductors in a wide array of devices, including smartphones, computers, automotive systems, and medical equipment, chips have become indispensable in numerous applications. This trend signals a consistent and enduring demand for semiconductors in the foreseeable future.
Against the backdrop, in this article, we explore the fundamentals of three stocks, Intel Corporation (INTC – Get Rating), STMicroelectronics N.V. (STM – Get Rating), and United Microelectronics Corporation (UMC – Get Rating), that are currently showing remarkable momentum and could be valuable additions to your watchlist.
The semiconductor industry is all set to grow at a rapid pace in the coming decades with its applications in the fields of Automotive, Wireless Communications, the Internet of Things (IoT), cloud computing, Artificial Intelligence (AI), and more.
The semiconductor market is expected to hit a revenue of $599.80 billion by this year. Over the period from 2023 to 2027, it is projected to exhibit a CAGR of 8.1%, resulting in a market volume of $818.60 billion by 2027.
Despite a short-term cyclicality, the demand for chips continued to be robust. This shows the increased dependency on chips in the modern world, with its demand and revenue increasing over the next decade. The growth of the semiconductor industry has been consistent, with its annual sales growing from $139 billion in 2001 to $573.5 billion in 2022, registering an increase of a whopping 313%.
Furthermore, governments around the world are recognizing the strategic importance of semiconductors and are investing heavily in this industry to reduce dependency on foreign chips and build up domestic manufacturing in order to meet the sustained demand for the nation.
For instance, the Biden-Harris Administration plans to strengthen the semiconductor supply chain through CHIPS for America investments. Funding opportunity for large semiconductor supply chain projects was announced, with investments exceeding $300 million and a separate process for smaller projects aimed at enhancing the industry’s resilience and growth.
Overall, the future of the semiconductor industry looks optimistic, with buoyant demand, favorable government initiatives, and great innovation in the coming years. With that being said, let us evaluate the fundamentals of the featured stocks to determine what makes them worth keeping an eye on.
Intel Corporation (INTC – Get Rating)
INTC is a renowned company that designs, develops, manufactures, markets, and sells computing and related products worldwide. It operates through Client Computing Group; Data Center and AI; Network and Edge; Mobileye; Accelerated Computing Systems and Graphics; Intel Foundry Services; and other segments.
On July 18, INTC revealed its term sheet agreement with ASUS, a renowned global technology solution provider. The agreement encompasses the manufacturing, sales, and support of the Intel® Next Unit of Compute (NUC) 10th to 13th generations systems product line.
By leveraging ASUS’ impressive expertise and track record in delivering industry-leading mini-PCs to customers, INTC aims to further advance the innovation and growth of its NUC systems product line.
On June 21, INTC, in partnership with Blockade Labs, unveiled LDM3D (Latent Diffusion Model for 3D), an innovative diffusion model powered by generative AI. This groundbreaking model allows the creation of realistic 3D visual content by generating depth maps, resulting in vivid and immersive 360-degree views.
