The semiconductor industry is gradually rebounding from supply chain issues and shortages, with favorable government policies and substantial investment. The industry is enjoying unprecedented demand due to semiconductors' wide-ranging applications across several sectors. Furthermore, if the CHIP act is passed, it should boost the industry and benefit both Cirrus (CRUS) and Silicon Laboratories (NASDAQ:SLAB). But which of these stocks is a better choice now? Read more to find out.Austin, Tex.-based Cirrus Logic, Inc. (NASDAQ:CRUS) is a fabless semiconductor company that provides low-power, high-precision mixed-signal processing solutions in the United States and internationally. In comparison, Silicon Laboratories Inc. (SLAB), which is also headquartered in Austin, provides silicon, software, and solutions for the Internet of Things (IoT), industrial, and consumer markets. The company offers analog-intensive, mixed-signal solutions for use in a range of electronic products in various applications for the IoT market.
The ballooning demand for consumer electronics, the evolving gaming industry, and the rising popularity of electric vehicles (EVs) have fostered screaming demand for semiconductors, creating immense scope for chipmakers to garner substantial returns. According to the latest Semiconductor Industry Association (SIA) report, worldwide sales of semiconductors increased 24% year-over-year to $48.8 billion in October 2021. “Annual chip sales and units shipped are projected to reach all-time highs in 2021, with moderate annual growth expected in 2022,” said John Neuffer, SIA president and CEO.
Furthermore, if the proposed Creating Helpful Incentives to Produce Semiconductors for America Act, or CHIPS Act, with an allocation of $52 billion to support domestic semiconductor production and incentives to invest in new semiconductor manufacturing facilities in the U.S. is passed, it should boost the industry significantly. And given the favorable market trends, both CRUS and SLAB should benefit.