Top US Semiconductor Companies to Watch in 2023
The semiconductor industry is the backbone of modern technology, powering everything from smartphones to advanced computing systems. As we move through 2023, several U.S.-based semiconductor companies are particularly noteworthy due to their innovative contributions and market potential. This article highlights the top ten U.S. semiconductor companies to watch this year.
Key Takeaways
- Nvidia continues to lead in graphics processing units (GPUs) and artificial intelligence (AI) technology.
- Qualcomm remains a dominant player in mobile and wireless communication technologies.
- Advanced Micro Devices (AMD) is making significant strides in both consumer and enterprise computing markets.
- Broadcom is known for its diverse semiconductor solutions, including wireless and broadband communication.
- Intel maintains its strong presence in the semiconductor industry with its focus on processors and data-centric solutions.
1. Nvidia
Nvidia is the clear leader in graphics processing units (GPUs) that power gaming, professional visualization, data centers, and cryptocurrency mining. With its massively parallel architecture, Nvidia GPUs are also uniquely suited to accelerate artificial intelligence and machine learning.
In 2023, it will become clearer than ever before that Nvidia is no longer just a GPU company. While the Santa Clara, California-based chip designer continues to make most of its money from GPUs, it’s hoping to change that soon with a growing portfolio of commercial software, its forthcoming Grace server CPU, a broader set of server appliances, and its expanding family of networking products that stemmed from the company’s 2020 acquisition of Mellanox Technologies.
With gaming and artificial intelligence poised for robust growth this decade, Nvidia remains a top semiconductor pick. Its dominance in advanced GPUs that fuel everything from video games to self-driving cars keeps Nvidia at the forefront of key technology trends.
Backed by solid financials and bold leadership, investors bullish on AI and the metaverse should consider building a long-term position in this innovative semiconductor giant.
2. Qualcomm
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.
Key Strengths and Opportunities
- Dominant position in mobile chips and modems, powering over 30% of smartphones
- Key role in the transition to 5G
- Leadership in adjacent growth markets like automotive and IoT
- Settlement of licensing dispute with Apple, securing long-term patent royalties
- Potential to compete with Apple developing its own modem chips
Financial Performance
| Metric | Value |
|---|---|
| Dividend yield | 1.9% |
| 1-year return | 59.5% |
| Consensus rating | Buy (1.89 out of 5) |
Strategic Moves
Qualcomm is staking a good chunk of its future on its 2021 acquisition of chip design startup Nuvia. The company has said that Nuvia’s tech will serve as the foundation for Arm-based custom application processing cores that will go into future chips for laptops, smartphones, and other device types. However, Arm is suing the San Diego, California-based chip designer to destroy its custom cores because Qualcomm allegedly failed to negotiate a new license with Arm to keep using Nuvia’s tech.
3. Advanced Micro Devices
As a leading designer of microprocessors and chipsets, Advanced Micro Devices (AMD) is a key player in auto semiconductors poised to benefit from electric vehicle growth. Highlights include:
- 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.
It’s been nearly six years since AMD reinvigorated its client CPU portfolio and re-entered the server chip market with the company’s game-changing Zen architecture. In that time, the Santa Clara, California-based chip designer has proven that it can firmly challenge Intel’s CPU dominance in PCs and servers while making inroads with GPUs and expanding to other product areas like adaptive system-on-chips (SoC) and data processing units (DPU) with its Xilinx and Pensando acquisitions.
4. Broadcom
Broadcom Inc. (NASDAQ:AVGO) designs, develops, and supplies various semiconductor devices. It is one of the biggest semiconductor companies in the US. On March 7, the company reported earnings for the fiscal first quarter of 2024. The company reported an EPS of $10.99, beating estimates by $0.57. The company’s revenue for the quarter grew by 34.17% and amounted to $11.96 billion, ahead of market consensus by $240.89 million. As of March 26, Broadcom Inc. (NASDAQ:AVGO) has surged nearly 63.01% over the past six months.
Financial Performance
- EPS: $10.99 (beat estimates by $0.57)
- Revenue: $11.96 billion (34.17% growth)
- 1-year return: 97.9%
- Dividend yield: 1.7%
Market Position
While trillion-dollar Nvidia Corporation (NVDA) has been turning heads, Broadcom is no slouch as the #2 largest U.S.-based semiconductor company. The company is closely tied to the broader industry, and despite a slight revenue slump in 2023, it is on track for a 22% rebound in 2024.
Future Outlook
Broadcom’s strong market position and financial performance make it a key player to watch. The company’s focus on next-generation chip technology, which can be used as the foundation for public and private 5G and 4G cellular networks, positions it well for future growth. The comparison of Taiwan Semiconductor (TSM) vs. Broadcom (AVGO) highlights the competitive landscape and potential for Broadcom to surge in the coming months.
5. Intel
Intel Corporation (NASDAQ:INTC) is a leading semiconductor company with a market capitalization of $177.74 billion as of March 26. The company offers a wide range of products and solutions catering to various industries and applications.
Data Center Market
This year, Intel is aiming to defend its data center market share against rivals with the recently launched fourth-generation Xeon Scalable processors. Additionally, Intel is taking a new swing at Nvidia and AMD with its new Intel Data Center GPU Max Series for high-performance computing and AI workloads.
PC Efforts
In the PC market, Intel will continue to push its new 13th-generation Core chips and Arc discrete graphics products. The company’s success in this area is crucial for its overall performance.
Turnaround Scheme
With the chipmaker reducing its headcount, making cuts to product lines, and slashing other programs, the stakes are higher than ever for Intel to execute CEO Pat Gelsinger’s turnaround scheme. This plan seeks to put Intel ahead of chip manufacturing rivals in advanced chip-making capabilities by 2025.
6. Micron Technology
Micron Technology Inc (NASDAQ:MU) is an American semiconductor company specializing in computer memory and data storage solutions. The company was founded in 1978 and has grown to become one of the biggest semiconductor companies in the US. As of March 26, Micron Technology Inc has a market capitalization of $132.55 billion.
7. Texas Instruments
Texas Instruments Incorporated (NASDAQ:TXN) is headquartered in Dallas, Texas, and is renowned for designing, manufacturing, testing, and selling analog and embedded processing chips. It is one of the biggest semiconductor companies in the US. As of March 26, 2023, the market capitalization of Texas Instruments stood at $154.68 billion.
Market Position
Texas Instruments holds a significant position in the semiconductor industry, particularly in the analog and embedded processing segments. The company’s extensive product portfolio and robust supply chain have enabled it to maintain a competitive edge.
Key Products
- Analog Chips
- Embedded Processing Chips
- Digital Light Processing (DLP) Technology
Financial Performance
| Metric | Value |
|---|---|
| Market Capitalization (as of March 26, 2023) | $154.68 Billion |
| Revenue (2022) | $18.34 Billion |
| Net Income (2022) | $7.77 Billion |
Future Outlook
The future looks promising for Texas Instruments, with increasing demand for automotive and industrial applications driving growth. The company’s focus on innovation and strategic investments in R&D are expected to sustain its market leadership.
8. Analog Devices
Analog Devices Inc. (NASDAQ:ADI) is a semiconductor company specializing in data conversion, signal processing, and power management technology. Despite its name, Analog Devices is a leader in the digital age, thanks to its innovative sensors and data converter products that translate real-world analog signals into digital data.
Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $94.57 Billion |
| Dividend Yield | 1.9% |
| 1-Year Return | 9.7% |
| Consensus Rating | Buy (1.58/5) |
Technological Advancements
Analog Devices has a rich history of technological advancements, including being the first to launch laser trim wafers. The company’s continuous innovation ensures it remains at the forefront of the semiconductor industry.
Market Position
Analog Devices’ market capitalization as of March 26 stands at $94.57 billion, reflecting its strong position in the industry. The company’s focus on data conversion and signal processing makes it a critical player in the semiconductor market.
9. Lam Research
Lam Research may not be a household name, but its strong outperformance in 2023 makes it a company worth paying attention to. The reason you may not have heard about the company is logical, too, since Lam isn’t a design shop or semiconductor foundry but rather a key supplier of wafer-fabrication equipment and related services that make the global chipmaking industry run.
Financial Performance
- Dividend yield: 0.9%
- 1-year return: 70.5%
- Consensus rating: Buy (1.74 out of 5)
Market Position
Lam Research is a critical player in the semiconductor industry, providing essential technology and services that support global chip production. This unique position allows it to benefit from the ongoing demand for advanced semiconductor manufacturing.
Risks and Considerations
However, risks include customer concentration issues and highly complex technical execution. Investors seeking stability and exposure to semiconductor manufacturing megatrends should consider building a position in Lam Research.
10. Microchip Technology
Microchip Technology Incorporated (NASDAQ:MCHP) manufactures and designs a wide variety of semiconductor products. The product categories include microcontrollers and processors. Microchip Technology Incorporated (NASDAQ:MCHP) has a market cap of $47.11 billion as of March 26.
Conclusion
The semiconductor industry in the US is poised for significant growth and innovation in 2023. Despite facing economic challenges, companies are continuing to push the boundaries of technology, driven by increasing demand and government support. Key players like Nvidia, Qualcomm, and AMD are leading the charge with their cutting-edge advancements, while a host of promising startups are emerging to tackle industry bottlenecks. Investors have a unique opportunity to capitalize on this dynamic market, with substantial upside potential forecasted for the coming years. As we move forward, keeping an eye on these top semiconductor companies will be crucial for anyone looking to stay ahead in the tech landscape.
Frequently Asked Questions
What are the top US semiconductor companies to watch in 2023?
The top US semiconductor companies to watch in 2023 include Nvidia, Qualcomm, Advanced Micro Devices, Broadcom, Intel, Micron Technology, Texas Instruments, Analog Devices, Lam Research, and Microchip Technology.
Why are these semiconductor companies important in 2023?
These semiconductor companies are important in 2023 because they are driving market innovations and navigating the tough economic environment. They are also well-positioned to benefit from the forecasted surge in semiconductor demand.
What factors make a semiconductor company worth watching?
Factors that make a semiconductor company worth watching include financial strength, technology leadership, and secular growth drivers. Companies that excel in these areas are likely to perform well in the market.
How is the US government supporting the semiconductor industry?
The US government is creating a conducive environment for the growth of the semiconductor industry through various initiatives and policies aimed at boosting domestic production and innovation.
What is the forecast for semiconductor demand?
Semiconductor demand is forecasted to surge over $1 trillion by 2030, presenting significant upside potential for investors.
Are there investment options for diversifying in the semiconductor sector?
Yes, investors can diversify their portfolios in the semiconductor sector by investing in semiconductor ETFs like SOXX and SMH, which provide affordable exposure to over 30 chipmakers.
