Governments worldwide have been taking steps to alleviate the current semiconductor chip shortage. With large-scale expenditures to expand production, fundamentally sound semiconductor companies Amkor Technology (NASDAQ:AMKR) and Silicon Motion Technology (NASDAQ:SIMO) should benefit. Therefore, we think these stocks could be ideal picks to cash in on the industry's growth prospects. Read on.A persistent semiconductor chip supply shortage has hampered output in various industries—from automobiles to electronics. However, massive investments by governments and businesses to scale up production should help the semiconductor industry meet the growing demand. According to the World Semiconductor Trade Statistics (WSTS), global semiconductor sales for September 2021 were $48.3 billion, up 27.6% from September 2020 and 2.2% from August 2021.
In addition, Commerce Secretary Gina Raimondo has urged the House of Representatives to adopt legislation supporting U.S. semiconductor chip manufacturing as soon as possible to avoid future supply disruptions and to catch up with the growing demands.
Keeping this backdrop and the long-term trends in mind, we believe fundamentally sound semiconductor stocks Amkor Technology Inc. (AMKR) and Silicon Motion Technology Corporation (SIMO) could be solid picks now. Though these stocks have witnessed significant price declines recently, we think they are well-positioned to gain substantially in the coming months.