Due to intensified global geo-political tensions, the semiconductor shortage issue might worsen. However, the overwhelming demand for semiconductors has helped the industry witness record sales and rising prices. John Neuffer, the president and CEO of Semiconductor Industry Association (SIA), recently said…
“Demand for semiconductor production is projected to rise significantly in the years ahead, as chips become even more heavily embedded in the essential technologies of now and the future.”
Moreover, the passage of the CHIPS Act investments totaling $52 billion to strengthen domestic semiconductor manufacturing and research is predicted to boost the growth of the domestic semiconductor industry.
Given this backdrop, quality U.S. semiconductor stocks Intel Corporation (INTC – Get Rating), Micron Technology, Inc. (MU – Get Rating), ON Semiconductor Corporation (ON – Get Rating), Rambus Inc. (RMBS – Get Rating), and SMART Global Holdings, Inc. (SGH – Get Rating) could prove to be wise bets now.
Intel Corporation (INTC – Get Rating)
INTC engages in the design, manufacture, and sale of computer products and technologies worldwide. The company operates through CCG; DCG; IOTG; Mobileye; NSG; PSG; and All Other segments.
Click here to checkout our Semiconductor Industry Report for 2022
On February 15, 2022, INTC announced its acquisition of Tower for $53 per share in cash, representing a total enterprise value of approximately $5.4 billion. Pat Gelsinger, INTC’s CEO, said, “This deal will enable Intel to offer a compelling breadth of leading-edge nodes and differentiated specialty technologies on mature nodes – unlocking new opportunities for existing and future customers in an era of unprecedented demand for semiconductors.”
INTC’s net revenue increased 2.8% year-over-year to $20.53 billion in the fourth quarter ended December 25, 2021. The company’s total current assets came in at $57.72 billion for the period ended December 25, 2021, compared to $47.25 billion for the period ended December 26, 2020. Also, its total assets came in at $168.41 billion, compared to $153.09 billion for the same period.
Analysts expect INTC’s revenue to increase 3.2% year-over-year to $77.82 billion in fiscal 2023. Its EPS is estimated to grow 6% to $3.72 in 2023. Also, it surpassed EPS estimates in each of the trailing four quarters. The stock closed Friday’s trading session at $48.07.
INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
INTC has an A grade for Value and a B grade for Quality. Within the A-rated Semiconductor & Wireless Chip industry, it is ranked #11 out of 97 stocks. Click here to see the additional POWR Ratings for Growth, Momentum, Sentiment, and Stability for INTC.
Micron Technology, Inc. (MU – Get Rating)
MU designs, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit; Mobile Business Unit; Storage Business Unit; and Embedded Business Unit.
On December 20, 2021, MU President and CEO Sanjay Mehrotra said, “We are now shipping our industry-leading DRAM and NAND technologies across major end markets, and we delivered new solutions to the data center, client, mobile, graphics, and automotive customers. As powerful secular trends including 5G, AI, and EV adoption fuel demand growth, our technology leadership and world-class execution position us to create significant shareholder value in fiscal 2022 and beyond.”
MU’s revenue came in at $7.69 billion for the fiscal 2022 first quarter ended December 2, 2021, up 33.2% year-over-year. Its non-GAAP net income came in at $2.47 billion, up 175.5% year-over-year, while its non-GAAP EPS came in at $2.16, up 176.9% year-over-year.
Analysts expect MU’s revenue to be $39.07 billion in fiscal 2023, representing a 20.8% year-over-year rise. The company’s EPS is also expected to increase 49.2% to $9.04 in 2022. It surpassed Street EPS estimates in each of the trailing four quarters. Over the past six months, the stock has gained 11% to close Friday’s trading session at $81.91.
MU’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system.
It has a B grade for Growth, Value, Sentiment, and Quality. It is ranked #7 in the same industry. Click here to see the additional ratings for MU (Momentum and Stability).
ON Semiconductor Corporation (ON – Get Rating)
ON provides intelligent sensing and power solutions worldwide. The company operates through three segments: the Power Solutions Group; the Advanced Solutions Group; and the Intelligent Sensing Group.
On February 7, 2022, Hassane El-Khoury, president and CEO of ON, said, “We continue to expand gross margins as we shift our mix into these high-value strategic markets while ramping new products, rationalizing our manufacturing footprint, and improving our overall cost structure. Outlook for our…
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