Canadian chip stocks to buy and hold amid demand growth speculation

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 Canadian chip stocks to buy and hold amid demand growth speculation
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Highlights

  • The global semiconductor market is anticipated to hit US$600 billion in 2022.
  • In Canada, there are not many semiconductor companies, but there are still a few options to explore.
  • Due to increased semiconductor content in products like factories and vehicles, the demand could rise.

Semiconductors have finally cemented their critical status as a truly necessary industry, even though it took recent chip shortages to do so. A recent report released by Deloitte has claimed that the global semiconductor market is anticipated to hit US$600 billion in 2022.

The report said that in various end markets, the absence of a single crucial chip, which frequently costs less than a dollar, might obstruct the sale of a US$ 10,000 gadget.

For the first time, the researchers anticipate that the worldwide industry will increase by 10 per cent to reach over US$600 billion in 2022. Due to increased semiconductor content in products like factories, vehicles, appliances, and data centres, in addition to the typical suspects like computers, data centres, and phones, chips could become even more significant across all industries.

In Canada, there are not many semiconductor companies, but there are still a few options to explore if an investor is looking for chip stocks. Here are a few to explore in 2022:

POET Technologies Inc. (TSXV:PTK)

The semiconductor business of POET Technologies particularly specialises in integrating photonics and electronic functionalities into a single microchip.

POET's technology enables these devices to interact in part via light, which is unaffected by temperature, unlike a normal semiconductor-based integrated circuit (IC).

On July 13, the PTK stock declined by 0.8 per cent during the trading session and closed at C$ 6.4 per share.

Spectra7 Microsystems Inc. (TSXV:SEV)

By replacing the size and weight of conventional circuits/chips with its analogue chip technology, Spectra7 aims to make electronics even smaller and more effective than they already are.

Spectra7 provides a wide range of semiconductor solutions, many of which are currently quite important and will probably gain much more attention in the future.

In the first quarter, the company's revenue was US$ 2.1 million, up by 275 per cent year-over-year (YoY). Meanwhile, the company expects its revenue to increase by 300 per cent by the end of the first half of this year.

5N Plus Inc. (TSX:VNP)

The material solutions provided by 5N Plus include metals, chemicals, and semiconductors. The company's semiconductor product portfolio includes two types of wafers and three different semiconductor compounds.

It is not a pure semiconductor firm, although it does have a large overlap with the sector. In Q1 2022, the revenue of 5N Plus soared 37 per cent YoY as there was a higher demand for speciality semiconductors.

The VNP stock trades on the Toronto Stock Exchange (TSX) closed at C$ 1.4 apiece on Wednesday.

Quantum Emotion Corp. (TSXV:QNC)

This nano-cap company stands out even among the somewhat unique companies on this list. The Quantum eMotion develops QNG2, a small IC-sized proprietary technology that can be included in most electronic products, including computers and cell phones.

It essentially functions as a quantum random number generator that can be used for next-generation encryption that even quantum gadgets and computers won't be able to decipher.

At market close on July 13, the QNC stock was priced at C$ 0.205 per share.

Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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