A severe supply shortage has struck the semiconductor industry in the wake of the COVID-19 pandemic, triggering substantial investments from governments and enterprises worldwide to redress the shortage. As the demand for semiconductors remains strong amid the continuing, global digital transformation, we think buying the dip in quality semiconductor stocks Semtech (NASDAQ:SMTC (NASDAQ:SMTX)), Himax (HIMX), and Alpha & Omega (AOSL) could deliver handsome gains in the near term. Read on.A global semiconductor shortage has caused production bottlenecks in multiple industries, including consumer electronics, technology, networking, and automotive. Given the heightened demand for microprocessors amid a remote lifestyle and global digital transformation, governments around the world have been investing heavily to boost production.
The U.S. Senate approved $52 billion federal investment in the domestic semiconductor market under the CHIPS for America Act on June 8. In a similar vein, the European Commission outlined its plans in March to double the EU’s share of global chip manufacturing to account for 20% of the global output by 2030.
Global semiconductor sales have risen 29.2% year-over-year to $133.60 billion in the second quarter, ended June 30, 2021. Furthermore, the semiconductor industry is expected to become one of the most crucial industries over the long term due to its universal applications.