Cyclical demand for semiconductors good news for investors?

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The Broad line semiconductor industry is engaged in the design and manufacture of integrated chips. Historically, the industry used to control the entire production process, from inception, design to manufacture. However now numerous firms in the industry are delegating more and more production to others while they provide the design and layout. In this way, many companies are outsourcing their activities.

The broad line semiconductors industry has a market capitalization of about $17 billion. The price to earnings ratio is 22.7. The net Profit margin stands around 11.5%, while the return on equity is 14.2%. The dividend yield is 3.0%.

The semiconductors industry is not only a rapidly expanding one but also a highly competitive one. Few companies dominate the scene but there are ambitious, relatively newer firms that are also emerging in the industry. The market leader in terms of Market capitalization is Intel with a revenue of $1702.4. It is followed by Taiwan Semiconductor with a market of $1358.7 Billion. It is further followed by Arm holdings and Texas Instruments, with a market of $1248.3 Billion and $647.1 Billion respectively. An analysis of the stock market shows that Intel has a stock price of 26.33. Taiwan semiconductors has that of 20.58. The highest stock price is commanded by Texas instruments of 45.61 followed by Arm Holdings which has that of 44.53 as of today. To learn more about the stocks of these companies as well as others in the industry, please visit a credible source, Bidnessetc.com.

There are other relatively less big firms that have shown the most promising growth in the industry. Morgan CRU has shown a growth rate of 311.60% in the last quarter. It was followed by Solargiga which had a growth rate of 160.10%. The third position of the fastest growing company is occupied by Spreadtrum Communications with a growth pace of 56.10%.

The semiconductors industry is a more volatile industry than most. Its fluctuations in demand have sometimes disheartened and confused investors as it is has created an atmosphere of uncertainty. However, it should be remembered that the semiconductor industry is highly cyclical. There is a persistent pattern of booms and busts in demand for the industry's products. Demand is inherently linked to demand for cellphones and personal computers. Therefore, in the peak period, companies like Intel and Toshiba can't produce microchips quickly enough to meet demand. However low points such as slow personal computer sales can have a highly detrimental impact on the industry Broadcom stocks and shares.

The investors can actually benefit from the knowledge that demand in the semiconductors industry is cyclical. This is a reassurance during low times because it provides the comfort that sales will boost back to normal once again. Therefore the investors are not left stranded to figure out whether the change is temporary or permanent, because they can predict with certainty that it is temporary.

The composite value of the industry's stock is $1100.0 while the change for today is -0.08%.

 

 

 
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