Government funding coupled with corporate investments should allow the semiconductor industry to increase its production capacity to meet the sky-high demand. The growth potential of this industry should allow low-priced stocks such as United Microelectronics (UMC) and Himax Technologies (NASDAQ:HIMX) to grow in the near term.The global semiconductor shortage is a grave challenge faced by countries worldwide, as the low supply is creating negative spill-over effects in the majority of tech-savvy industries. As a result, governments and corporations alike are spending heavily on this industry to expand the total production capacity.
President Biden’s proposed infrastructure plan includes a provision of $50 billion investment to revive the American semiconductor industry. Comparatively, the European Union announced its aim to boost its chip production to account for 20% of the global output by 2030, while South Korea recently announced a $452 billion investment in this industry over the next nine years. On the corporate front, Taiwan Semiconductor Manufacturing Company (TSM), the world’s largest semiconductor manufacturer, has responded to this shortage by increasing its capital spending budget to $28 billion in 2021.
Such investments should boost the production, and thereby supply of semiconductors globally. According to Statista, the global semiconductor industry is expected to grow 11% year-over-year in 2021. Moreover, the Semiconductor Industry Association projects the annual global sales to increase 19.7% in 2021 and 8.8% in 2022.