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Global Semiconductor Revenues Rebound in 2020: 5 Winners

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Ritujay Ghosh
·5 min read
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The global semiconductor industry had a great 2020, with revenues rebounding after a decline in 2019. And this happened despite the pandemic. Demand for semiconductors witnessed a surge last year despite the pandemic-induced lockdown in the early months that kept shipments halted for long.

In fact, the global semiconductor industry, which plays a key role in the high-growth technology space, has been relatively less battered by the coronavirus pandemic, thanks to the growing sales of 5G smartphones and the ongoing 5G boom in several parts of the world.

Global Semiconductor Revenues Rebound

According to a preliminary report from Gartner, global semiconductor revenues hit $449.8 billion in 2020, reflecting an increase of 7.3% from 2019. This follows a 12% decline from the prior year in 2019. In fact, the lockdown and work and learn-from-home culture gave a boost to microchip sales.

Memory emerged as the best-performing device category in 2020, as demand for server build and PCs grew due to the pandemic. Worldwide memory revenues jumped $13.5 billion, accounting for 44% of overall growth in revenues in 2020.    

Within memory, NAND flash witnessed maximum revenue growth of 23.9%, hitting $52.8 billion. This was $10.2 billion higher than 2019.

5G Smartphones, PC Demand Drive Sales

Although the overall smartphone market slowed down, strong sales of 5G smartphones help drive microchip sales. Also, microchip demand got a boost from the 5G boom in Europe and parts of Asia, including China and Singapore.

Intel Corporation INTC once again dominated the position as the No. 1 global semiconductor vendor in terms of revenues. Intel’s revenues grew 3.7% in 2020.

Although semiconductor sales had somewhat slowed down after the coronavirus outbreak, when shipments got stalled due to the lockdowns, sales started picking up once the economies reopened. Sales of microchips, both year over year and month over month, have been on the rise for quite some time now.

Our Choices

Given that the pandemic is far from over and people will continue to work and learn from home, demand for servers and PCs will continue to increase. As a result, the semiconductor market is poised for further growth in 2021. Below are five chip stocks that investors can gain from the current scenario.

Micron Technology, Inc. MU through global brands, namely Micron, Crucial and Ballistix, manufactures and markets high-performance memory and storage technologies including Dynamic Random Access Memory or DRAM, NAND flash memory, NOR Flash, 3D XPoint memory and other technologies.

The company’s expected earnings growth rate for next year is 36.4%. The Zacks Consensus Estimate for current-year earnings has improved 44% over the past 60 days. Micron sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Maxim Integrated Products, Inc. MXIM is an original equipment manufacturer of semiconductor analog and mixed-signal integrated circuits. The company has a broad product portfolio that includes analog-to-digital converters, amplifiers and comparators, communications devices, data converters, and management components, sensors and wireless products.

The company’s expected earnings growth rate for the current year is 24.8%. Its shares have gained 30.2% in the past three months. Maxim Integrated Products holds a Zacks Rank #2 (Buy).

NXP Semiconductors N.V. NXPI provides high-performance, mixed-signal and standard product solutions that leverage its RF, analog, power management, interface, security, as well as digital processing expertise. 

The company’s expected earnings growth rate for next year is 35.4%. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 30 days. NXP Semiconductors carries a Zacks Rank #2.

NVIDIA Corporation NVDA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that now support high-performance computing, gaming and virtual reality platforms.

The company’s expected earnings growth rate for the current year is 67.9%. The Zacks Consensus Estimate for current-year earnings has improved 6.3% over the past 60 days.NVIDIA holds a Zacks Rank #2.

Taiwan Semiconductor Manufacturing Company Ltd. TSM is the world's largest dedicated integrated circuit foundry. It manufactures proprietary IC designs using its advanced production processes.  

The company’s expected earnings growth rate for the current year is more than 18.3%. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the past 60 days. Taiwan Semiconductor has a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


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Micron Technology, Inc. (MU) : Free Stock Analysis Report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
Maxim Integrated Products, Inc. (MXIM) : Free Stock Analysis Report
 
NXP Semiconductors N.V. (NXPI) : Free Stock Analysis Report
 
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
 
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