Government and private investments worldwide are helping the semiconductor industry rebound from tight supply conditions. Also, robust demand for semiconductors is keeping the chipmakers very busy. As such, both NVIDIA (NVDA) and ON Semiconductor (ON) are well-positioned to capitalize on the unprecedented demand for chips. But which of these stocks is a better buy now? Read more to find out.Santa Clara, Calif.-based NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing company worldwide. It operates in two segments: Graphics and Compute & Networking. It designs systems on chip units (SoCs) for the mobile computing and automotive market. In comparison, ON Semiconductor Corporation (ON) manufactures semiconductor components for various electronic devices worldwide. The Phoenix, Ariz., company operates in three segments: Power Solutions Group (PSG); Advanced Solutions Group (ASG); and Intelligent Sensing Group (ISG).
Robust demand and solid revenue growth have motivated semiconductor companies to invest in strategic plans to upgrade their production capacity, which could potentially ease the chip shortage in the near term. Also, the governments of several countries are investing in the industry to help increase production.
According to the Semiconductor Industry Association (SIA), sales during the second quarter of 2021 were $133.6 billion, up 29.2% year-over-year. Furthermore, the World Semiconductor Trade Statistics (WSTS) organization projects the worldwide semiconductor market to grow 25.1% year-over-year to $551 billion in 2021.