Zacks analyst blog spotlights Analog Devices, Semtech, Vishay Intertechnology and Sumco

For immediate release

Chicago, IL – May 2, 2022 – announces the list of stocks featured in the analyst blog. Every day, Zacks Equity Research analysts discuss the latest news and events impacting stocks and financial markets. Stocks recently featured in the blog include: Analog Devices ADI, Semtech Corp. SMTC, Vishay Intertechnology, Inc. VSH and Sumco Corp. SUOPY.

Here are highlights from Friday’s analyst blog:

Semiconductor revenues will hit records: 4 stocks to buy

Markets have bled lately and tech stocks have been one of the biggest casualties. However, the semiconductor market does not seem to have been affected much, as the surge in demand has boosted sales. In fact, the surge in demand that led to a crisis in semiconductor supply last year is still far from over.

This has seen a steady increase in semiconductor sales over the past few months and forecasts are for revenues to hit an all-time high this year. Given this situation, actions like Analog devices, Semtech Corp., Vishay Intertechnology, Inc. and Sumco Corp. should benefit from it in the short term.

Semiconductor revenue will hit a new high

According to a new report from Gartner, global semiconductor revenues will hit a new high of $676 billion in 2022, up 13.6% year-over-year. Growing demand for semiconductors will be the main driver of revenue growth.

In addition, the average selling price of semiconductors has increased due to the shortage of chips, which is expected to be the main driver for the growth of the global semiconductor market. Of the total growth in 2022, semiconductor revenues from smartphones are expected to increase 15.2% this year, given that 5G smartphone production units are expected to grow 45.3% in 2022.

The report further states that the memory market will continue to dominate the overall semiconductor device market. The memory market is expected to account for 31.4% of the overall semiconductor device market in 2022.

However, slowing PC and server market growth is expected to dampen semiconductor revenue growth in the coming days, but overall demand for semiconductors will continue as the supply crunch continues for months, the report says.

Semiconductor sales continue to rise

According to the recent Semiconductor Industry Association (SIA) report, global semiconductor sales rose 32.4% year-over-year in February to $52.5 billion from $39. $6 billion the previous month.

February was a strong month, according to SIA, with global semiconductor sales up more than 20% year-over-year for the 11th consecutive month.

The demand for semiconductors has exploded in recent years. As more people stayed home to work and learn during the COVID-19 outbreak, demand for electronic goods, networking and communications equipment soared. Sales of semiconductors have thus increased.

Additionally, as the Internet of Things (IoT), artificial intelligence and virtual reality gain popularity, the demand for microchips will continue to soar. The development of these advanced technologies depends on semiconductor technology. As a result, the demand for semiconductors is only expected to grow in the coming years as the need for these services grows.

Increased demand for 5G devices is also benefiting microchip sales, with unit production more than tripling to 555 million in 2021 from 250 million in 2020 and expected to grow a further 45.3%, according to the Garner report.

Additionally, the semiconductor shortage is far from over and is expected to last for the rest of the year. This will only benefit the industry, as demand is expected to remain strong.

Our choices

The semiconductor industry is only expected to benefit in the short term, given the growing demand for semiconductors and the continued shortage of supply. In today’s market, there are four smart stocks investors could take advantage of.

Analog devices is an original equipment manufacturer of semiconductor devices, particularly analog, mixed-signal and DSP integrated circuits. The ADI product line consists of amplifiers and comparators; analog-to-digital converters; digital to analog converters; video encoders and decoders; embedded processing and DSP products; MEMS and temperature sensors; RF/IF components and converters; Power and thermal management ICs, audio/video converters, amplifiers, CODECs, filters and processors. Analog Devices has manufacturing facilities in the United States, Ireland and Southeast Asia.

Analog Devices’ expected profit growth rate for the current year is 30.5%. The Zacks consensus estimate for current-year earnings has improved 1.3% over the past 60 days. ADI wears a Zacks rank #2.

Semtech Corp. designs, manufactures and markets a wide range of analog and mixed-signal semiconductors for commercial applications. SMTC’s product line includes Signal Integrity Products, Protection Products, Power and High Reliability Products, Wireless and Sensing Products, and Systems Innovation Group. Semtech Corporation devices are used in a variety of applications including computing, communications, industrial, military aerospace and automotive.

Semtech Corporation’s forecast earnings growth rate for the current year is 29.5%. The Zacks consensus estimate for current-year revenue has improved 8% over the past 60 days. SMTC sports a #1 Zacks rank.

Vishay Intertechnology, Inc. is a global manufacturer and supplier of semiconductors and passive components. VSH’s products include metal oxide semiconductor field effect transistors, diodes and optoelectronic components. Vishay Intertechnology’s products are typically used to perform functions such as switching, amplifying, rectifying, routing or transmitting electrical signals, power conversion, and power management.

Vishay Intertechnology’s forecast earnings growth rate for the current year is 4.7%. The Zacks consensus estimate for current-year earnings has improved 0.2% over the past 60 days. VSH wears a #2 Zacks rank.

Sumco Corp. manufactures and sells silicon wafers for the semiconductor industry. SUOPY offers single crystal ingots, polished wafers, annealed wafers, epitaxial wafers, junction insulated wafers, silicon on insulator wafers and reclaimed polished wafers. Sumco Corporation mainly operates in Japan, North America, Asia and Europe.

Sumco Corporation’s forecast earnings growth rate for the current year is 32.7%. The Zacks consensus estimate for current-year earnings has improved 11.5% over the past 60 days. SUOPY sports a #1 Zacks rank.

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Past performance is not indicative of future results. The potential for loss is inherent in any investment. This document is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold any security. No recommendation or advice is given as to whether any investment is suitable for any particular investor. It should not be assumed that investments in the securities, companies, sectors or markets identified and described have been or will be profitable. All information is current as of the date hereof and is subject to change without notice. The views or opinions expressed may not reflect those of the company as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management of securities. These returns come from hypothetical portfolios composed of stocks with Zacks Rank = 1 that have been rebalanced monthly without transaction fees. These are not the returns of actual stock portfolios. The S&P 500 is an unmanaged index. To visit for more information on the performance figures displayed in this press release.

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