In this article, we discuss the 5 cheap semiconductor stocks to buy now. If you want to read our detailed analysis of the semiconductor industry, go directly to the 10 Cheap Semiconductor Stocks to Buy Now.
5. Marvell Technology, Inc. (NASDAQ:MRVL)
Share price as of Monday, September 20, 2021: $60.68
Number of Hedge Fund Holders: 51
Marvell Technology, Inc. (NASDAQ: MRVL) is headquartered in Santa Clara, California and it targets a variety of enterprise semiconductor segments. Marvell Technology, Inc. (NASDAQ: MRVL) is also famous for having supplied the first WiFi chip for Apple’s original iPhone launched in 2007 and the first in-car mobile WiFi connectivity platform in the Audi A8. However, as mentioned above, its primary markets are the enterprise sectors, where it works with the likes of Microsoft Corporation and Nokia.
Marvell Technology, Inc. (NASDAQ: MRVL) not only offers off the shelf data processing units (DPUs), but it also allows its customers to design their own integrated circuits, which are then made a part of the company’s product packages. It has also partnered with Huawei, Nokia, Samsung, ZTE, and Ericsson for providing processors for the companies’ fifth generation (5G) telecommunications products aimed towards telecommunication carriers. It also provides products to the aerospace and defense industries.
ClearBridge Investments, in its Q1 2021 investor letter, mentioned Marvell Technology, Inc. (NASDAQ: MRVL). Here is what the fund said:
“We also purchased Marvell Technology Group, in the IT sector, a semiconductor maker with exposure to the fast growing 5G and data center markets whose shares sold off in the latest rotation out of growth stocks. Marvell just acquired data center supplier Inphi, a name we have held in other ClearBridge portfolios, which should increase the chipmaker’s cross-selling opportunities in a strong demand environment for chips.”
4. II-VI Incorporated (NASDAQ:IIVI)
Share price as of Monday, September 20, 2021: $59.29
Number of Hedge Fund Holders: 29
II-VI Incorporated (NASDAQ: IIVI) is another American chip manufacturer headquartered in Saxonburg, Pennsylvania. As opposed to other semiconductor firms that sell chips, the company also sells machines that are responsible for manufacturing and selling semiconductor laser machines which enables its customers to process materials for a wide variety of products.
II-VI Incorporated (NASDAQ: IIVI) also supplies lasers that enable the manufacturing of vertical cavity surface emitting lasers (VCSELs). VCSELs are products that have grown alongside the communication boom ushered in by fourth generation (4G) cellular networks and the datacenter markets as they enable faster communications.
The company also provides high quality wafers to semiconductor foundries. These wafers are then printed with the billions of tiny transistors by chipmakers such as Intel Corporation and the cut up into individual chips for further processing. II-VI Incorporated (NASDAQ: IIVI) also supplies materials used to manufacture chipmaking machines.
Carillon Eagle Small Cap Growth Fund, in its Q4 2020 investor letter, mentioned II-VI Incorporated (NASDAQ: IIVI). Here is what the fund said:
“II-VI, otherwise known as “Two-Six,” is a diversified technology company with significant exposure to optical components for telecommunications infrastructure products used in data centers and next-generation 5G networks. The company provided forward revenue guidance that was better than expected, and investors are excited about a laser component that is used in mobile phones to enable 3D sensing functionality, providing the camera with depth perception.”
3. Intel Corporation (NASDAQ:INTC)
Share price as of Monday, September 20, 2021: $52.98
Number of Hedge Fund Holders: 78
Intel Corporation (NASDAQ: INTC), which is one of the, if not the most well-known semiconductor company in the world might seem a surprising addition to this list. However, Intel Corporation (NASDAQ: INTC)’s share price is lower when compared to its smaller peers such as Advanced Micro Devices, Inc and NVIDIA Corporation, due to the fact that the company has a significantly higher number of shares outstanding. According to Yahoo Finance, Intel Corporation (NASDAQ: INTC) has 4.06 billion shares outstanding, while NVIDIA and AMD, which have higher share prices, have 2.49 billion and 1.21 billion shares, respectively.
While Intel Corporation (NASDAQ: INTC) has struggled with pushing out semiconductors manufactured on the leading-edge manufacturing processes, the company under the leadership of its new chief executive officer Mr. Patrick Gelsinger is looking to make a comeback. As an established player, Intel Corporation (NASDAQ: INTC) has several agreements with U.S. government agencies and it commands a dominating market share in the x86 microprocessor market, with its only competitor being AMD.
2. Infineon Technologies AG (OTC:IFNNY)
Share price as of Monday, September 20, 2021: $41.82
Number of Hedge Fund Holders: 1
Infineon Technologies AG (IFNNY) is a German semiconductor manufacturing company that was originally part of the Siemens AG business group. While the term semiconductors generally bring computer and smartphone chips to mind, the market is more diverse than this as it includes other smaller segments such as power management integrated circuits and automotive processors. The company targets the automotive chip sector, the industrial sector which includes power generation companies, sensors that are located inside a plethora of devices such as computers, notebooks, gaming consoles, and datacenters and chips present inside Subscriber Identification Modules (SIM) for phones, credit and debit cards, passports and other products which require secure processing.
Infineon Technologies AG (IFNNY) was also at the center of the recent automobile chip shortage which resulted in several automakers such as Ford shutting down their production lines. However, as foundries ramp up production, the automotive sector is also expected to experience significant growth. This growth is evident in an analysis by PricewaterCoopers, one of the world’s largest accounting firms, who forecasts that by 2022 end, the automotive subsector of the semiconductor industry will have grown by 11.9%.
1. ON Semiconductor Corporation (NASDAQ:ON)
Share price as of Monday, September 20, 2021: $47.67
Number of Hedge Fund Holders: 44
ON Semiconductor Corporation (NASDAQ: ON) is an American semiconductor supplier which was formed in 1999. It is headquartered in Phoenix, Arizona, and is responsible for catering to several subsectors within the semiconductor industry. The company also has its own manufacturing facilities inside the United States, and through these, it manufactures and sells custom chips as required by its customers. ON Semiconductor Corporation (NASDAQ: ON) also supplies image sensors and memory devices, which when combined with its custom chips, make up for the company’s customized semiconductor segment.
In addition to this segment, the company also sells products under the discrete, power management and signal management categories. The discrete segment caters to high power devices, the power management sector supplies chips installed in products such as voltage regulators and the signal management sector covers technology products such as amplifiers and radiofrequency devices.
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