Increasing investments to ramp up semiconductor chip production to meet high demand from several industries should drive the semiconductor industry’s growth. This, combined with technical breakthroughs in chip-making, should benefit Qualcomm (NASDAQ:QCOM) and Synaptics (NASDAQ:SYNA). But which of these stocks is a better buy now? Read more to find out.Qualcomm Incorporated (QCOM) and Synaptics Incorporated (SYNA) are two prominent players in the global semiconductor market. QCOM, in San Diego, Calif., is a multinational semiconductor and telecommunications equipment company that develops and delivers products and services based on code-division multiple access (CDMA) technology used in digital wireless communications equipment and satellite ground stations. In comparison, San Jose, Calif.-based SYNA develops and supplies custom-designed semiconductor products and solutions used in mobile computing, communications, PCs, IoT, and other electronic devices worldwide. The company also provides audio input and output System-On-Chips (SoCs), high-definition video and vision SoCs, touch controllers, touchpads, display drivers, and fingerprint sensors.
Despite the current semiconductor chip shortage, which has impacted the production of various industries worldwide, the global semiconductor industry witnessed 27.6% year-over-year sales growth in the third quarter. And investor optimism in this space is evident in the SPDR S&P Semiconductor ETF’s (XSD) 21.1% gains over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 6.7% returns.
Increasing investments by governments and enterprises to address the global chip shortage are expected to stabilize chip supply by the end of 2022. This, along with recent technological breakthroughs in the chip manufacturing process, should drive the industry’s growth. The global semiconductor market is expected to grow at a 7.7% CAGR to $778 billion by 2026. So, both QCOM and SYNA should benefit.