Semiconductors
3.0 Stars - Attractive
Sector Background
- Semiconductor companies may be classified as foundries, fabless, integrated device manufacturers or equipment manufacturers.
- As of 2020, US based companies hold the largest market share in the industry at nearly 50%.
What we like about
- Semiconductors are the bedrock of all technology.
- The industry has strong barriers to entry, which protects the future earnings growth of the incumbent companies.
- As the world becomes increasingly tech driven, the demand for semiconductors will continue to increase.
Sector Outlook
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Global semiconductor sales rose by 25.6% in 2Q21, leading to much better earnings growth and record high share prices for chipmakers.
- The industry is at risk of a down cycle as demand begins to normalise.
- As the semiconductor industry begins to recover, we have upgraded the industry to 3.0 Stars “Attractive”.
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