If I Could Buy Only 1 Semiconductor Stock, This Would Be It
With the advent of artificial intelligence (AI), the growth of chips in electric and autonomous vehicles, and governments worldwide now subsidizing production, it's no wonder many investors are bullish on semiconductor growth. According to McKinsey, the chip industry is set to grow from about $600 billion today to $1 trillion by 2030. That's a high-single-digit growth rate, above what U.S. gross domestic product (GDP) should be over that time.
And yet, advanced semiconductors have a dark side, with extreme cyclicality in some end markets. Just look at today's more mature PC and smartphone markets, which are in some of their worst-ever downturns coming off the pandemic boom.
The semiconductor industry can also be capital-intensive, requiring large outlays for manufacturing facilities that are costly and time-consuming to build, as well as extremely difficult manufacturing processes that further complicate execution. That's why this capital-light, highly diversified chip equipment stock is probably best positioned to capture shareholder value from the industry's long-term growth.
Source Fool.com
