For Immediate Release
Chicago, IL – July 28, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NeoPhotonics Corporation NPTN, Silicon Laboratories Inc. SLAB, Analog Devices ADI and Vishay Intertechnology, Inc. VSH.
Here are highlights from Wednesday’s Analyst Blog:
4 Semiconductor Stocks to Watch on Growth Prospects
The U.S. Senate voted 64-32 on Jul 26 to advance a key bipartisan bill that would boost domestic semiconductor manufacturing and help the country compete with China. The $280 billion package will be in the form of subsidies and research funding.
As the Internet of Things (IoT), artificial intelligence, and virtual reality become gain more importance, demand for microchips has continued to grow. This has resulted in an acute semiconductor shortage globally. The new bill, which is likely to get passed by the end of this week, is expected to not only boost semiconductor production but also help ease the ongoing shortage. Given this situation, stocks like NeoPhotonics Corporation, Silicon Laboratories Inc., Analog Devices and Vishay Intertechnology, Inc. are expected to benefit in the near term.
Semiconductor Manufacturing to Get a Boost
The legislation will provide $52 billion in subsidies to the U.S. semiconductor industry and, in turn, a major boost to production. Besides, it will provide $24 billion in the form of investment tax credit to semiconductor plants.
The legislation comes as President Joe Biden and other experts have said that it is of utmost importance for economic and national security as the world gets increasingly dependent on technology. Thus, the bill will help the United States be more self-reliant.
The bill is also expected to ease the global semiconductor shortage that started during the peak of the pandemic and continues. Semiconductor shortage has already hampered production in industries like automobiles, consumer electronics and high-tech weapons and medical equipment, which has compelled several manufacturers to cut down on production.
Semiconductor Industry Poised to Grow
The U.S. semiconductor industry was already doing good but is still behind China in production. The bill is now expected to help the United States compete with China in terms of manufacturing and production.
The bill comes just at a time when semiconductor manufacturers are struggling to meet the soaring demand for chips. Ever since the onset of the pandemic, the semiconductor industry has been facing a supply-chain crisis. While demand is soaring, several industries have been crippled because of a supply shortage.
This, on the other hand, higher demand has been boosting semiconductor sales. Global semiconductor sales increased 18% year over year in May to $51.8 billion from $43.9 billion in May 2021, according to SIA. Global semiconductor sales increased 18% year over year in May to $51.8 billion from $43.9 billion in May 2021, according to SIA.
Semiconductor sales have increased by more than 20% month over month, for the 14th straight month now. This reflects the underlying strength of the sector as well as the ongoing increase in demand for semiconductors.
The supply crisis is far from over but the new bill is expected to ease this problem to a great extent, which is only going to help the industry in the coming days.
Stocks to Watch
The semiconductor industry is only likely to benefit in the near term, given the surging demand for semiconductors. The new bill, at the same time, will further boost production and is expected to make the United States more self-reliant. Given this scenario, these four chip stocks are likely to benefit in the near term.
NeoPhotonics Corporation is engaged in the design and manufacture of the photonic integrated circuit, or PIC, based modules and subsystems for bandwidth-intensive, high-speed communications networks. Products offered by NPTN include high-speed products that enable data transmission at 10Gbps, 40Gbps and 100Gbps, agility products such as ROADMs that dynamically allocate bandwidth to adjust for volatile traffic patterns, and access products that provide high-bandwidth connections to more devices and people over fixed and wireless networks.
NeoPhotonics Corporation’s expected earnings growth rate for the current year is more than 100%. Shares of NPTN have gained 3.2% in the past three months. NeoPhotonics Corporation has a Zacks Rank #2 (Buy).
Silicon Laboratories Inc. is a leading provider of silicon, software and solutions for the Internet of Things, Internet infrastructure, industrial automation, consumer and automotive markets. SLAB solves the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity.
Silicon Laboratories’ expected earnings growth rate for the current year is 66.4%. Shares of SLAB have gained 8.9% in the past three months. Silicon Laboratories has a Zacks Rank #2.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and DSP integrated circuits. ADI’s product line is composed of amplifiers and comparators; analog to digital converters; digital to analog converters; video encoders and decoders; embedded processing products and DSPs; MEMS and temperature sensors; RF/IF components and converters; power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices has manufacturing facilities in the United States, Ireland, and Southeast Asia.
Analog Devices’ expected earnings growth rate for the current year is 42.9%. Shares of ADI have gained 8.5% in the past three months. Analog Devices carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vishay Intertechnology, Inc. is a global manufacturer and supplier of semiconductors and passive components. VSH’s products include metal oxide semiconductor field-effect transistors, Diodes and Optoelectronic Components.
Vishay Intertechnology’s expected earnings growth rate for the current year is 15.5%. Shares of VSH have gained 5.8% in the past three months. Vishay Intertechnology carries a Zacks Rank #3.
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