Semiconductor Crisis Leading to Significant Opportunity


Investors may want to consider semiconductor stocks, we said on March 2.

All because the worldwide shortage is now expected to last into 2022, reports MarketWatch.

Worse, says IHS Markit, as highlighted by Reuters, a shortage of auto chips could impact up to a million units of global light vehicle production this quarter. Technology is being hit hard, too with work and school from home trends increasing the demand for electronics. Electric vehicle maker Nio even had to halt production the other day due to these shortages.

It’s gotten so bad Taiwan Semiconductor Manufacturing wants to spend $100 billion over the next three years to help fix the issue.

“TSMC is entering a period of higher growth as the multiyear megatrends of 5G and [high-performance computing] are expected to fuel strong demand for our semiconductor technologies in the next several years,” the company announced, as quoted by Barron’s. “The pandemic also accelerates digitalization in every aspect.”


Top Ways to Trade the Shortage

With the current showing no signs of letting up soon, some of the top ways to trade the continued shortages are with Pro Shares Ultra Semiconductor (USD), iShares PHLX Semiconductor ETF (SOXX), and First Trust NASDAQ Semiconductor ETF (FTXL).

Other top stocks you may want to consider are Micron Technology (MU), which just ran from $80 to $93.57. If it can break above resistance, we could see a test of $100. Helping, the company just reported solid earnings. Revenue for example, came in at $6.24 billion as compared to $5.77 billion quarter over quarter.

“Micron’s strong fiscal second quarter performance reflects rapidly improving market conditions and continued solid execution,” said Micron Technology President and CEO Sanjay Mehrotra, as quoted in a company release

“Our technology leadership in both DRAM and NAND places Micron in an excellent position to capitalize on the secular demand driven by AI and 5G, and to deliver new levels of user experience and innovation across the data center and intelligent edge.”