2 Small-Cap Value Chip Stocks You Need to Know About

Governments around the world are responding to fallout from the chip shortage of the last few years by pouring billions of dollars into semiconductor manufacturing. Even the U.S. and the European Union, which account for small portions of the global chipmaking market (Taiwan and South Korea have come to dominate the space), are getting serious. The U.S. CHIPS Act will dole out $53 billion to support manufacturing and research, and the European Chips Act will aim to rekindle semiconductor manufacturing with 43 billion euros in funding.

This legislation is only going to foot a small part of the bill to build new fabs and update existing ones, though. A new high-end chip fab, where the manufacturing of semiconductor designs is executed, can cost tens of billions of dollars. That's why I've recently focused my investment dollars not on chipmakers themselves like  or Taiwan Semiconductor Manufacturing. Instead, I am putting my money into fab equipment companies -- the businesses that build the machines needed to actually make silicon wafers and package the chips from those wafers into a computer. 

Because of global economic uncertainty in 2023, many of these fab equipment company stocks have been sold off hard, but they could be trading at a deep-value share price. Two small-cap names you should keep on your radar are Onto Innovation (NYSE: ONTO) and Kulicke Soffa Industries (NASDAQ: KLIC). Here's why. 

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Source Fool.com