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5 Non-US Chip Stocks Well-Positioned to Profit From Soaring Microchip Demand

Published 07/03/2024, 13:00
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  • Deloitte predicts a robust 13% growth in the production of crucial chips across various industries this fiscal year.
  • The memory chip market growth stands out in the report, and European chip companies stand to benefit from it.
  • So in this article, we will try and analyze five non-US chip stocks that could make a worthy addition to your portfolio.
  • Investing in the stock market? Take advantage of our InvestingPro discounts. More information at the end of this article.
  • Deloitte has recently predicted a significant 13% growth in the production of vital chips across various industries this year.

    Meanwhile, VentureBeat has highlighted the rise of accelerator chips fueled by generative artificial intelligence, smart manufacturing, global assembly and testing capabilities, and enhanced IP security against cyber threats.

    These chips play crucial roles in cell phones, robotics, automobiles, household appliances, defense systems, and more.

    As of today, China currently leads in producing 5 to 7 nanometer chips, crucial for industrial and mobile applications, and is expected to advance to even smaller nanometer scales before the US.

    Consequently, the US is providing public support to its semiconductor sector.

    This year, support will be directed towards several manufacturing projects by GlobalFoundries (NASDAQ:GFS) in New York and Vermont, along with incentives for Microchip Technology (NASDAQ:MCHP) and BAE Systems (LON:BAES).

    Currently, only a handful of companies like Korea's Samsung (OTC:SSNLF) and Taiwan's Taiwan Semiconductor Manufacturing (NYSE:TSM) can manufacture the most advanced three-nanometer chips.

    Additionally, the memory chip market shows promise, with inventory levels for chips used in computer storage devices currently below average.

    As a result, semiconductor companies in Europe, with less exposure to automotive and industrial sectors but more focus on memory chips, may witness higher profits.

    So, in this article we will explore some intriguing European and Asian stocks in the semiconductor sector that you could consider adding to your portfolio.

    1. ASML

    ASML (NASDAQ:ASML) offers advanced semiconductor equipment systems, including lithography.

    Formerly known as ASM Lithography Holding and changing its name in 2001, the company was founded in 1984 and is headquartered in Veldhoven, the Netherlands.

    ASML Price Chart

    On May 7 it distributes a dividend of $1.61 and to be eligible to receive it, shares must be held before April 26.

    On April 17, it presents earnings. It should be noted that the previous data presented on January 24 were good, with an increase in revenues of +5% and earnings per share (EPS) of +8.9%.

    A good news is that ASML has reached the "first light" of its new High NA EUV lithography system. Lithography systems help create the tiny circuits in computer chips.

    This system costing more than $350 million is expected to help enable new generations of smaller and faster chips.

    It has 41 ratings, of which 27 are buy, 13 are hold and 1 is a sell.

    Its shares are up +60.88% in the last 12 months.

    2. Taiwan Semiconductor

    Taiwan Semiconductor (NYSE:TSM) manufactures and sells integrated circuits and other semiconductor devices worldwide. The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan.

    TSM Price Chart

    On July 11 it distributes a dividend of $0.44 and to be eligible to receive it you must own shares before June 13.

    On April 18 we will have its income statement. For 2024 it expects an increase in revenues of +19.5% and earnings per share (EPS) of +21.1%.

    It should not be forgotten that it is the world's largest chipmaker and is the only one that manufactures Nvidia's (NASDAQ:NVDA) most relevant chips.

    Its shares are up +59% in the last 12 months.

    3. Infineon Technologies

    Infineon Technologies (OTC:IFNNY) designs, develops, manufactures and markets semiconductor-based solutions worldwide. It was founded in 1999 and is headquartered in Neubiberg, Germany.

    Infineon Technologies Price Chart

    Its dividend yield is +1.03%.

    Its results are due on May 7. In the last ones of February 6, its earnings per share (EPS) rose by +9.4%.

    It has 24 ratings, of which 21 are buy, 3 are hold and none are sell.

    Its shares have fallen by -3.80% over the last 12 months.

    The market sees potential at 44.50 euros. HSBC, which places it at around 53 euros, stands out.

    4. STMicroelectronics

    STMicroelectronics (NYSE:STM) designs, develops, manufactures, and sells semiconductor products in Europe, the Middle East, America, and Asia Pacific. It was incorporated in 1987 and is headquartered in Geneva, Switzerland.

    STMicroelectronics Price Chart

    On March 26 it distributes a dividend and to receive it you must hold shares before March 18.

    On April 24 we will know its numbers. The previous ones on January 25 reflected an increase in earnings per share (EPS) of +19.8%.

    Its shares are down -3.50% in the last year.

    The market gives it a potential at 54.44, although Bank of America) raises it to 57.

    5. ASM International

    ASM International (OTC:ASMIY) is engaged in the research, development, manufacturing, and marketing of equipment and materials used to produce semiconductor devices in the United States, Europe, and Asia.

    ASM International Price Chart

    It was formerly known as Advanced Semiconductor Materials International. It was incorporated in 1968 and is headquartered in Almere, the Netherlands.

    Its dividend yield is +0.44%.

    It will release its results on April 23. Earnings per share (EPS) are expected to increase by +7.5% in 2024.

    It has 21 ratings, of which 11 are buy, 8 are hold and 2 are sell.

    Its shares are up +87.2% over the past 12 months.

    Deutsche Bank gives it a potential of $620.

    ***

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    Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.

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