12 Small-Cap Semiconductor Stocks to Buy Now

3. Ultra Clean Holdings Inc. (NASDAQ:UCTT)

Market Capitalization: $1.7 billion

Number of Hedge Funds: 24

Ultra Clean Holdings Inc. (NASDAQ:UCTT) is a developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. The company’s product offerings include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics and process modules, high-level assemblies, and other precision components that ensure the integrity and performance of semiconductor manufacturing.

Over the long term, Ultra Clean Holdings Inc. (NASDAQ:UCTT) anticipates sustained growth in the semiconductor market it serves, driven by diverse, long-term industry demands. These demands include emerging CPU architectures that enable higher-performing servers, essential for cloud computing, artificial intelligence (AI), and machine learning applications. Additionally, it foresees that semiconductor original equipment manufacturers (OEMs) will increasingly rely on partners like Ultra Clean Holdings Inc. (NASDAQ:UCTT) to meet their growing capacity needs. As of Q3 2024, the company’s revenue was fairly concentrated, with two major suppliers accounting for around 52% of their total revenue. While higher concentration poses a risk, the company is focusing on expanding its customer base and cross-selling more offerings to existing customers, which should support long-term earnings growth.