Semiconductors are vital to the modern economy and semiconductor stocks are a way for investors to track their profits, as the production of increasingly sophisticated chips grows.
Quite simply, semiconductors are the brains of the brains of modern electronics. They are at the core of modern communications, computing, healthcare, military systems, transportation, clean energy and countless other applications. In fact, they have become critical to any country’s economic growth, competitiveness and even national security.
Yet there is a supply shortage, as shown most evidently by the shortages in the auto industry during the pandemic. To boost manufacturing capacity, the big semiconductor companies like TSMC, Samsung and Intel are substantially increasing their investments in fabrication plants (known as ‘fabs’) and next-generation chip miniaturization.1