According to the World Semiconductor Trade Statistics, the semiconductor industry sales rose 25.6% in 2021 and 6.8% in 2020. For this year, consulting firm Deloitte shared that the sales will grow 10% higher.
The sales projection for semiconductors is positive this 2022 with the high demand for chips, and analysts are seeing a huge opportunity for stock investors as well.
Sectors Fueling the Growth of the Semiconductor Industry
Automotive, consumer electronics, healthcare and military sectors are some of the largest contributors to the semiconductor industry. Today, semiconductors are called “the new oil” as millions of products rely on them.
In recent months, the semiconductor shortage dominated news outlets. The COVID-19 pandemic halted the transportation of chips, while the mandate to stay at home heightened the demand for electronics. The sectors we’ve mentioned above were the same ones that were drastically affected by this supply chain issue. The supply shortage won’t be fully resolved until the new factories commence their operations in the next two to three years. Yet again, the demand is set to be higher in the future.
Best Semiconductor Companies to Invest in 2022
We’ve rounded the top three semiconductor companies to invest in this year.
BrainChip Holdings Limited (ASX: BRN)
BrainChip Holdings specialises in a technology that develops neural processes for Edge AI applications and is based in Sydney, Australia. They use an architecture that imitates the actual neurons of human brains. The company has had a steady growth in the past two years, with multiple deals and patents granted. Major organisations, including NASA work with BrainChip to meet spaceflight requirements.
There are two main reasons for the increase in BrainChip’s share price recently: (1) the capital call notice to LDA Capital for up to 15,000,000 shares, (2) the commercialisation of the AKD1000 AIOT chip.
Weebit Nano Limited (ASX: WBT)
Weebit Nano Limited develops a silicon oxide resistive random access memory technology used in different industries, including cloud data, automotive, healthcare and smartphones. It operates in Australia and Israel.
In December 2021, the company had AU$48M in cash and was debt-free. With a cash burn of AU$15M, it has a cash runway of around 3 years, which is a good lead time to further finance and develop the business. The company has a market capitalisation of AU$477M, making its cash burn low in proportion.
Pivotal Systems Corporation (ASX: PVS)
Pivotal Systems Corporation provides a gas flow monitoring and control technology platform for the semiconductor industry. The company is headquartered in California, United States.
Pivotal Systems is yet to dominate the semiconductor market, but it has already received significant attention from investors in recent years. Its price movement on the ASX reached AU$1.24 at one point and dropped to AU$0.78, giving investors the liberty to buy stocks at a lower price. The company’s profit is expected to grow by 74% this year and there’s also a foreseeable high cash flow.