10 Undervalued Chip Stocks Near 52-Week Lows

7. Monolithic Power Systems Inc (NASDAQ:MPWR)

Monolithic Power Systems is 14% above its 52-week lows, which it hit in November last year. The company announced a weak Q3 performance which resulted in a significant correction in the stock. For many, this was a buying opportunity and with the price trading sideways for the most part of the last two months, the opportunity is still there for the taking.

MPWR created its unique economic moat by targeting efficiency in the power management chip market. It did so by adopting higher power density in its chips. This niche approach has helped it carve out a small portion of the market for itself even when it cannot compete with major semiconductor players on all fronts.

While other semiconductor manufacturers create separate equipment for each component in a chip, MPWR integrates everything on a single design, thus reducing the switching and conduction losses as a result of shortened electric paths. The company also operates on a lean model by outsourcing its manufacturing to companies that specialize in modern semiconductor manufacturing technologies. In this way, the firm can focus on its core niche technology, which is what has helped it drive nearly 245% returns in the last 5 years, despite the stock currently trading at two-thirds of its all-time highs!