How to Play the Shortage in This “Lifeblood” Tech


Snow is in the air, and that cheerful, gift-giving time of year is fast approaching.

A graphic of a person's hands resting on a laptop with a stock line graph moving through it

Source: Shutterstock

Interestingly, many folks are anxiously wondering whether they’ll be able to procure the latest and greatest tech gadgets, among other items, for their loved ones in time for Christmas.

That’s because product shortages have become routine these days as we face ongoing snags in the global supply chain. Among the products hardest hit are the semiconductors that power our electronic devices, from gaming consoles to electric vehicles (EVs).

Companies like Sony Group Corporation (NYSE:SONY), Microsoft Corporation (NASDAQ:MSFT) and Nintendo (OTCMKTS:NTDOY) have said supplies of their highly prized new gaming consoles could be constrained through 2022 due to the chip shortage.

The chip shortage is also hitting other prized electronics products, like graphics cards, Wi-Fi routers, lower-end laptops, speakers and earphones, not to mention EVs.

To give you a sense of the level of demand that’s coming, consider that your typical Ford Focus uses roughly 300 chips. But Ford Motor Company’s (NYSE:F) new EV, the Mustang Mach-E, requires nearly 10-times as many chips.

Intel Corporation (INTC) CEO Pat Gelsinger said he thinks the global chip shortage won’t end until sometime in 2023, while ARM Holdings CEO Simon Segars said the chip shortage will last much longer and be much worse than many are expecting.

U.S. Commerce Secretary Gina Raimondo recently told CNN the chip shortage isn’t likely to abate until late 2022, assuming new coronavirus variants don’t continue to crop up.

These shortages could spell trouble for folks looking to fulfill their loved ones’ holiday wish lists.

However, the situation bodes well for the high-quality companies that are expected to benefit from the supply chain shortage, as I explained with my InvestorPlace colleagues Luke Lango and Eric Fry on Wednesday in our Early Warning Summit 2022.

As we discussed, the microchips made from semiconductors are the lifeblood of the modern digital world.

Everything from tech, manufacturing, and agriculture to travel, entertainment, and banking can’t function without massive amounts of computer chips.

And with new technologies like 5G, the Internet of Things (IoT) and artificial intelligence (AI) all converging and growing every single day, demand for chips will remain strong for years.

It’s why some of the biggest semiconductor manufacturers are pouring so much money into expanding their capacity.

The world’s largest chipmaker, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), has said it will invest $100 billion over the coming three years to ramp up its output. QUALCOMM Incorporated (NASDAQ:QCOM) is investing from $25 billion to $28 billion this year alone. Micron Technology, Inc. (NASDAQ:MU) recently announced plans to invest $150 billion over the next decade to expand its semiconductor output.

I think we’re in the early stages of a massive chip manufacturing boom, and so, in the short term, and I expect chip manufacturers to generate incredible earnings throughout 2022.

In fact, I’ve been recommending chipmakers for years and with great success.

Like Intel Corporation (NASDAQ:INTC), which I recommended when it traded at just $3.60 per share.


And QUALCOMM, which I recommended at $2.10.

Looking ahead, I believe 2022 will be a pivotal year for this sector of the market. You just need to know where to look.

Business Is Booming for This Semiconductor Standout

Now, one stock that I think is an interesting play for this opportunity designs, engineers, manufactures and sells test and burn-in equipment for use in the semiconductor industry in North America, Asia and Europe.

It provides full wafer contact test systems, test during burn-in systems, test fixtures and related accessories.

The company markets and sells its products to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies through a network of distributors and sales representatives.

Obviously, due to the current semiconductor ship shortage, the company’s business is booming.

Case in point: The analyst community is expecting 157.1% annual earnings growth of $0.04 per share in its current quarter that ended in November. In the past two months, the analyst community has revised their consensus earnings estimate up for a loss of $0.01 per share to $0.04 per share.

Typically, positive analyst revisions precede future earnings surprises. In other words, the company is making a transition from negative to positive earnings, which is exactly when a company’s shares tend to take off.

Now, Luke, Eric and I reveal the name and ticker of this company in our Early Warning Summit 2022… for free. In fact, it’s only one of the four free stock recommendations we unveil in our presentation.

That’s because we don’t think only a single sector, like the red-hot semiconductor industry, is poised for explosive potential next year.

The bottom line is that the convergence of new technologies — like AI, 5G, precision medicine, the Internet of Things, electric and driverless cars and the blockchain — are re-creating the very framework of modern society.

When you add up the economic impact that these technologies will have on the world, it’s staggering — at least $45 trillion over the next 10 years.

In our Early Warning Summit 2022, Luke, Eric and I lay out our view of why we believe we’re about to witness one of the biggest stock booms in U.S. history.

Click here to watch the replay… to get our four free picks… and to see what other stocks Luke, Eric and I believe are a screaming buy now.


Louis Navellier

P.S. Luke, Eric and I see a lot of great opportunities lining up for 2022. But you need to be VERY selective with your money moving forward given everything that’s happened in the world.

And you need to have a proven game plan in place for the moments when the markets get rocked.

We see big moves coming to the market in 2022, and we’ve created a unique approach to exploit these moves for big gains. We go over it in fine detail at our Early Warning Summit 2022.

Click here to watch the replay now.

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Microsoft Corporation (MSFT), Ford Motor Company (F), Micron Technology, Inc. (MU)

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.

Article printed from InvestorPlace Media,

©2023 InvestorPlace Media, LLC