Top Semiconductor Manufacturing Companies to Watch

The semiconductor industry is poised for significant growth in 2024, driven by technological advancements and increasing demand across various sectors. Among the companies leading the charge, Nvidia, AMD, Micron, Taiwan Semiconductor, and Intel stand out as semiconductor stocks to watch. Each company is uniquely positioned to capitalize on key industry trends such as AI, 5G, cloud computing, and the Internet of Things.

Key Takeaways

• Taiwan Semiconductor Manufacturing Co. Ltd. is critical to the global supply chain and excels in advanced semiconductor chip manufacturing.
• NVIDIA Corp. is strategically aligned with future technological advancements, making it a top stock for 2024.
• Intel Corp. remains a leader in the U.S. semiconductor industry by revenue and production capacity.
• Samsung is a major player in the semiconductor market, contributing significantly to various technological advancements.
• Advanced Micro Devices (AMD) is recognized for its strong financial foundation and involvement in key technological developments.

1. Taiwan Semiconductor Manufacturing Co. Ltd.

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) was founded in Taiwan in 1987 by Morris Chang as the world’s first dedicated semiconductor foundry. TSMC is the world’s largest semiconductor foundry, manufacturing integrated circuits (ICs) for customers globally. The company serves major sectors, including computing, consumer electronics, automotive, and telecommunications. TSMC stands out for its scale, manufacturing leadership, and financial strength, enjoying strong profitability with 49% gross margins, 26% operating margins, and 33% returns on equity. The company is well-positioned to capitalize on the growing demand for advanced semiconductor chips, fueled by advancements in 5G, artificial intelligence, the Internet of Things, and electric vehicles (EVs).

2. NVIDIA Corp.

NVIDIA Corp. (NVDA) is a leading developer of graphics processors for personal computers and enterprise servers. Founded in 1993 and headquartered in Santa Clara, California, NVIDIA is renowned for its graphics processing units (GPUs) for gaming and professional markets. NVIDIA continues to dominate the global semiconductor market with a mammoth $2.4 trillion market cap and a $942.89 share price as of March 22, 2024.

Financial Performance

• Revenue (TTM): $18.1 billion
• Net Income (TTM): $9.5 billion
• Market Cap: $1.8 trillion
• 1-Year Trailing Total Return: 218.1%
• Exchange: Nasdaq

Key Strengths

• Pioneer in GPU-accelerated computing and dominate gaming/crypto mining segments.
• Critical supplier for AI training/inference in data centers and cloud environments.

Innovations and Market Impact

NVIDIA’s massively parallel architecture makes its GPUs uniquely suited to accelerate artificial intelligence and machine learning. The company’s solutions are used in industries such as architecture, cybersecurity, robotics, and game development.

3. Intel Corp.

Intel, established in 1968 and headquartered in Santa Clara, California, is a multinational technology company and a leading manufacturer of computer processors and other semiconductor products. Intel is renowned for its microprocessors found in most personal computers, solidifying its status as a cornerstone of the computing industry. The company’s product lineup extends beyond CPUs, including chipsets, integrated graphics, memory, and networking hardware, catering to various computing needs from consumer to enterprise levels.

Founded in 1968 as a manufacturer of logic circuits and memory chips, Intel has spent the past half-century growing into one of the largest semiconductor firms in the world. The company, which has well over 100,000 employees and locations in 65 countries, produces a wide array of chips, including graphics processing units (GPUs), systems-on-a-chip (SOC), and flash memory. Intel’s line of central processing units (CPUs), all under the umbrella of the company’s flagship Intel Core family, are used by Dell, HP, and many other major computer manufacturers.

Intel’s innovations have powered decades of computing advancements, significantly contributing to developing desktop, laptop, and server markets. Despite increasing competition in recent years, Intel continues to invest heavily in research and development, aiming to maintain its leadership in process technology and manufacturing capabilities.

In March, Intel was awarded a total of $8.5 billion in subsidies—and another $11 billion in loans—through the CHIPS Act. The firm plans to put the substantial injection of funding toward the construction of two new fabs on its Arizona campus and another two in Ohio, where the company will attempt to launch an entirely new manufacturing hub with no preexisting semiconductor ecosystem. All four of the new fabs announced will manufacture leading-edge nodes.

4. Samsung

A well-known name in the consumer electronics industry, Samsung (005390.KS) is involved in much more than devices for everyday use. It manufactures business appliances and solutions, health and medical equipment, consumer appliances, robotics, and much more.

Samsung Semiconductor, a subsidiary of Samsung Electronics, develops semiconductors for use in business and consumer electronics. Its solutions apply to technologies like data centers, automotive and IoT to mobile and wearable devices. The company manufactures its semiconductor chips using its in-house foundry, Samsung Foundry.

Samsung believes in the power of collaboration with industry partners to inspire and drive the type of innovation that shapes the future.

5. Broadcom Inc.

A multinational corporation headquartered in the heart of Silicon Valley, Broadcom primarily operates as a fabless designer with a broad and diversified range of semiconductor products. The company’s portfolio includes ethernet switch ICs, network adapters, RAID controllers, and other devices that are used by high-profile customers like IBM, Dell, Motorola, and Nintendo. In 2023, Broadcom finalized a multibillion dollar deal with Apple—for whom it has been a longstanding supplier—to provide 5G radio.

Broadcom designs, develops and supplies semiconductor technology and infrastructure software solutions, covering a range of enterprise storage, networking and communications use cases. The company’s line of products include storage adapters, wireless embedded solutions, RF components, processors, custom silicon devices and motion control encoders, helping power massive businesses across a range of industries.

Broadcom Inc.

Broadcom supplies digital and analog semiconductors as well as software for networking, telecom, and data center markets. It provides interfaces for computers’ Bluetooth connectivity, routers, switches, processors, and fiber optics.

6. Qualcomm Inc.

Qualcomm is a global semiconductor and telecommunications company that designs and markets wireless communications products and services. Telecommunications companies worldwide use Qualcomm’s patented CDMA (code division multiple access) technology, which has played an integral role in the development of wireless communications. Its Snapdragon chipsets are found in many mobile devices.

Qualcomm is a leading designer and supplier of semiconductor chips and wireless telecommunications products, specializing in mobile phone chips and expanding into the Internet of Things (IoT) and automotive industries. With the rollout of 5G networks fueling an upgrade cycle for smartphones globally, Qualcomm is poised to benefit from surging demand for its chipsets and licensing technologies.

7. Advanced Micro Devices (AMD)

Advanced Micro Devices (AMD) is a global semiconductor company known for its pioneering work in microprocessors, graphics processors, and related technologies. Founded in 1969 and headquartered in Santa Clara, California, AMD has grown into a formidable competitor in the semiconductor industry, challenging industry giants and innovating across high-performance computing, graphics, and visualization technologies.

Financial Performance

• Revenue (2023): $23 billion
• Net Income (TTM): $299 million
• Market Cap: $2.9 billion
• 1-Year Trailing Total Return: 106.3%

Market Position

AMD is Intel’s most direct competitor and has been battling the tech giant for market share since the 1960s. The company is highly regarded for its Ryzen CPUs and Radeon GPUs, which have received critical acclaim for their performance and efficiency.

Strategic Focus

AMD is well-poised to capitalize on the surge in demand for high-performance computing, gaming, and data center technologies. The company has made significant inroads into these areas, benefiting from industry trends and strategic positioning.

Key Highlights

• Highest rank in laptop CPUs and strengthening data center chip business
• Dominant position supplying infotainment/ADAS chips for next-gen autos
• Electric vehicle charging semiconductors signal additional upside

8. ASML Holding

ASML Holding N.V. is a Dutch multinational corporation founded in 1984. ASML specializes in the development and manufacturing of photolithography machines, which are essential for the production of semiconductors. As a leading manufacturer of semiconductor lithography equipment, ASML is poised to benefit from strong demand growth.

9. Micron Technology

Micron Technology, founded in 1978 and headquartered in Boise, Idaho, is a global semiconductor industry leader specializing in developing and manufacturing memory and storage solutions. Micron’s product portfolio includes dynamic random-access memory (DRAM), NAND flash memory, and NOR flash memory, essential components in various electronic devices such as computers, smartphones, servers, and automotive applications.

Micron’s strategic approach to research and development, combined with its global manufacturing footprint, enables the company to maintain a competitive edge in the fast-paced semiconductor industry. Through collaborations with industry partners and a commitment to sustainability, Micron aims to address the growing demand for high-quality memory solutions while minimizing its environmental impact.

Micron Technology stands out as one of the best semiconductor stocks for 2024, poised to capitalize on several key industry trends. As digital transformation accelerates globally, the demand for memory and storage solutions is skyrocketing, driven by technological advancements such as artificial intelligence, 5G, cloud computing, and the IoT. Micron is well-positioned to meet this surging demand with its leading-edge DRAM and NAND technologies. The company’s ongoing investments in next-generation memory technologies further solidify its market position.

Micron’s planned state-of-the-art semiconductor manufacturing facilities are expected to create approximately 75,000 domestic jobs over the next 20-plus years, showcasing its commitment to economic growth and innovation.

10. SK Hynix

SK Hynix is one of the largest memory chip makers in the world. Hynix chips are used by many companies to manufacture various end products that require memory. The company was founded in 1983 and is headquartered in South Korea. Nearly two-thirds of its revenues are generated from the sale of dynamic random access memory (DRAM) and one-third from NAND Flash sales.

Conclusion

The semiconductor industry is on the cusp of a transformative era, driven by rapid technological advancements and increasing demand across various sectors. Companies like Nvidia, AMD, Micron, Taiwan Semiconductor, and Intel are at the forefront, leveraging their technological prowess and financial strength to lead the market. With the global semiconductor demand projected to exceed $1 trillion by 2030, these companies are well-positioned to capitalize on emerging trends such as AI, 5G, cloud computing, and the Internet of Things. For investors, this represents a significant opportunity to gain exposure to a sector that is integral to the future of technology. Diversifying through semiconductor ETFs like SOXX and SMH can also provide a balanced approach to investing in this dynamic market. As we look ahead, the continued innovation and strategic positioning of these top semiconductor companies make them essential players to watch in the coming years.

Frequently Asked Questions

What is the semiconductor industry?

The semiconductor industry involves the design and manufacturing of semiconductor devices, which are essential components in electronic devices. These include microchips, transistors, and diodes used in everything from computers and smartphones to medical equipment.

Why is Taiwan Semiconductor Manufacturing Co. Ltd. important?

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) is crucial due to its role in the global supply chain and unmatched manufacturing expertise. TSMC is a key player in producing advanced semiconductor chips, which are vital for technologies like 5G, AI, IoT, and electric vehicles.

Which companies are leading the semiconductor industry in the U.S.?

Leading semiconductor companies in the U.S. include Intel Corp., NVIDIA Corp., Qualcomm Inc., and Advanced Micro Devices (AMD). These companies are known for their technological advancements and significant contributions to the industry.

What factors are driving the growth of the semiconductor industry?

The growth of the semiconductor industry is driven by technological advancements and increasing demand across various sectors such as AI, 5G, cloud computing, and the Internet of Things. The forecasted surge in semiconductor demand to over $1 trillion by 2030 highlights the industry’s significant growth potential.

Why is NVIDIA considered a top semiconductor company to watch?

NVIDIA is considered a top semiconductor company due to its leadership in AI technology and graphics processing units (GPUs). The company’s strong financial foundation and strategic alignment with future technological advancements make it a compelling choice for investors.

What are some investment options for those interested in the semiconductor industry?

Investors interested in the semiconductor industry can consider individual stocks of leading companies like NVIDIA, Qualcomm, TSMC, ASML Holding, and AMD. Additionally, semiconductor ETFs like SOXX and SMH provide affordable exposure to a diversified portfolio of over 30 chipmakers.