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4 Mid-Cap Semiconductor Stocks That Have More Room to Run

Published 07/27/2021, 10:57 AM
Updated 07/27/2021, 11:30 AM
© Reuters.  4 Mid-Cap Semiconductor Stocks That Have More Room to Run

© Reuters. 4 Mid-Cap Semiconductor Stocks That Have More Room to Run

The semiconductor industry is seeing a substantial uptick in demand from the consumer electronics and automotive industries. Consequently, we think semiconductor companies Rohm (ROHCY), Cirrus Logic (NASDAQ:CRUS), MACOM Technology (MTSI), and Semtech (NASDAQ:SMTC (NASDAQ:SMTX)) have robust growth potential because they have been rapidly boosting their production levels. So, there could be plenty more upside to be had from these mid-cap stocks. Let’s discuss.The current global semiconductor shortage was in-part created by the accelerated, global, digital transformation and rising household demand for advanced electronic devices. Moreover, the increasing adoption of cloud technologies, 5G solutions, and electric vehicles is also contributing to the rising demand for semiconductors.

Since semiconductors form the backbone of emerging technologies, the industry has been enjoying favorable investor sentiment, as evidenced by VanEck Vectors Semiconductor ETF’s (SMH) 61.2% returns over the past year. To meet the growing demand for chips, several semiconductor companies are ramping up their production and manufacturing capabilities significantly. As a result, the semiconductor market is expected to reach $90.8 billion by 2024, growing at a 4% CAGR.

Also, mid-cap stocks have performed well this year, as evident in the iShares Core S&P Mid-Cap ETF (IJH) 16.2% return year-to-date. Given this backdrop, we think it would be wise to bet on fundamentally strong mid-cap semiconductor stocks Rohm Co. Ltd. (ROHCY), Cirrus Logic Inc. (CRUS), MACOM Technology Solutions Holdings Inc. (NASDAQ:MTSI), and Semtech Corporation (SMTC) because they are poised to continue moving higher.

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