5 - 7 minutes readWhat are the 5 Best Semiconductors Stocks in 2023?

Everyone wants to know that “what are the 5 best Semiconductors Stocks in 2023?” The concept of automation is propelling the world forward. All of the tasks that used to take hours or even days can now be completed in a matter of minutes. All of this is possible because of technological advancements.

5 Best Semiconductors Stocks in 2023

We now have unlimited access to everything. A foldable smartphone, electric scooters, and even a supercomputer are on the horizon. However, without a chip, all of these electronic devices are useless. Yes, one small technological chip is critical to the operation of all electric devices. These tiny chips are referred to as semiconductors.

Nowadays, semiconductor chips are found in all of the devices we use. The temperature sensor in your air conditioner is made of semiconductors. Because of semiconductor chips, electrical rice cookers can cook rice evenly. Not only that, but semiconductors are also used in credit cards, trains, and medical networks, among other things. As a result, without semiconductors, it is impossible to use a device efficiently.

Silicon and germanium are the two elements that make up a semiconductor. China is the world’s largest producer of silicon. China will produce approximately 5.4 million metric tonnes of silicon by 2020. This accounted for roughly two-thirds of global silicon production in 2020. Russia, Brazil, Norway, and the United States are the world’s other major silicon producers.

The Effects of a Semiconductor Shortage

For the past two years, supply chain constraints and a global shortage have made the semiconductor market quite volatile. Experts predict that it will continue until early 2024. Supply chain disruptions in the semiconductor industry have affected 169 industries across 169 countries, including India. According to Deloitte, the chip shortage has resulted in a $500 billion revenue loss over the last two years.

Construction of a New Semiconductor Factory

Countries around the world built new fab units to bridge the enormous gap between demand and supply of semiconductor chips. Chipmakers and foundries have begun planning for 29 new semiconductor factories in China, Taiwan, the United States, Japan, and Korea. Fabrication takes three years to complete. While the industry anticipates that 200 fabs will be operational by 2026, the construction of fabs presents its own set of challenges due to a lack of materials and labour.

An overview of India’s Semiconductor Industry

Currently, India imports all its semiconductors, the majority of which come from Taiwan, China, Korea, and Vietnam. This results in a massive import value of $24 billion. According to the Ministry of Electronics and Information Technology, India’s semiconductor market will grow to $63 billion by 2026, four times its current size. With the 5G rollout just around the corner, demand for semiconductors may break through the ceiling.

Why should you Buy Top Semiconductor Stocks in India?

As you may have noticed, the demand for semiconductors will only rise in the coming years. In addition, the government has announced the Semicon India Program and sanctioned funds under the PLI scheme to make India a prominent hub for semiconductor manufacturing. Domestic and international private companies have reacted positively to this.

List of Top 5 Best Semiconductors Stocks in 2023

There is a list of top 5 Semiconductors Stocks in India:

1 – TATA ELXSI

Citizens were working from home in 2020, resulting in a surge in demand for laptops, air conditioners, and other electronic devices. Now high demand is good news for companies. But there was a small problem. Globally, there was a huge shortage in the supply of semiconductor chips. So, companies were experiencing difficulties in manufacturing electronic devices despite the high demand. The Tata Group saw this as an opportunity and decided to enter the semiconductor space.

In August 2021, the company displayed its plans to invest $300 million (approx. Rs. 2,245 crore) to set up a new semiconductor assembly and testing unit. Today, Tata Elxsi has already entered 5G network equipment and the semiconductor industry.

2 – Dixon Technologies

Dixon Technologies Limited is one of India’s largest companies, focusing on the production of consumer durables, lighting, and smart phones.

They have a diverse product portfolio that includes:

  • Consumer electronics such as LED TVs.
  • Washing machines are examples of home appliances.
  • LED bulbs and tube lights are examples of lighting products.
  • Cell phones
  • DVRs and CCTV
  • Medical Supplies
  • Set-top box repair and refurbishment services… and much more.

3 – MosChip Technologies

MosChip Technologies began operations in 1999. It is a company that designs semiconductor systems. It is India’s first publicly traded fabless semiconductor company. A fabless semiconductor company designs, tests, and packages semiconductor chips but does not produce them.

Moschip Technologies Ltd. has a diverse clientele from all over the world. In fiscal year 2021, it generated approximately 86% of its revenue from its semiconductor business and 14% from its embedded services business.

4 – ASM Technologies

ASM Technologies specialises in consulting services for embedded software and system software. They specialise in prototyping, testing, pilot production, network design, wireless and cloud security products, and other services.

Most of the company’s revenue comes from its clients in the United States. By 2020, the company’s international clients will account for 81% of its revenue.

ASM Technologies has also made investments in the cloud, network, cybersecurity, electric vehicles, and other areas.

The company is currently working and investing in the digital space. They intend to set up and use IoT technology to make things easier soon.

5 – SPEL Semiconductor Limited

Natronix’s India OSAT facility is housed at SPEL Semiconductor Limited. It is in the business of selling electrical integrated circuits (ICs). SPEL is India’s first and only facility for semiconductor IC assembly and testing. Because this company sells integrated circuits, their products are used in a variety of electronic devices such as laptops, smartwatches, smartphones, and computers.

SPEL also provides services to several fabless businesses around the world. Several of their largest customers are in America, Asia, and Europe. Earnings from the company’s non-Core businesses are increasing, which could be risky. The promoter, on the other hand, owned Zero Promoter Pledge, accounting for 59.17% of the company.


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Things to think about before Investing in India’s Best Semiconductor Stocks

  1. Check to see if the company has shown a consistent increase in revenue growth. Furthermore, it should be able to convert sales into profits. Only then can profits be reinvested in research and operations to help the company grow even further.
  2. The company’s financials must be strong. Analyze the company’s past and current performance by reviewing its income statement, balance sheet, cash flow statement, annual report, and other important documents. This will indicate its prospects and help you make the best investment decision.
  3. Be wary of risks and developments in the semiconductor industry as well as within the company.
  4. Although the government is working hard to make India a global semiconductor hub, the ecosystem will take time to form, maintain, and grow. Initially, the companies would devote enormous resources to research and operations, increasing their costs and limiting their profits. As a result, it is best to invest with a long-term horizon in mind.
  5. Do not take recommendations, tips, or unsolicited advice at face value. Consult a financial advisor, if necessary, but only invest after thoroughly researching semiconductor stocks.

Conclusion

Semiconductors are a true blessing to the modern world. Nowadays, semiconductor chips are found in almost every electronic device we use. With the growing demand for electric vehicles, this segment is expected to grow even more. As a result, it is safe to predict that semiconductor stocks will soon accelerate and become the new emerging trend.