Should you explore these microchip stocks?

Summary

• The strength of the semiconductor industry lies in its inherent applicability across sectors over the long run.
• Microchip Technology Incorporated develops microcontroller units or MCUs and has seen operating income of US$ 848 million during March 2023 quarter.
• NVIDIA Corporation designs discrete graphic processing units and reported a total revenue of US$ 11.98 billion for the three months ended January 2023.

The Chinese ban on Micron Technologies (NASDAQ: MU) has affected the company’s stock performance over the last two days. However, the strength of the semiconductor industry lies in its inherent applicability across sectors over the long run.

There could be a short-term disruption in the semiconductor sector due to this ban, the evidence of which lies in the MU stock price that has decreased since the announcement. In the meantime, let us look at a few semiconductor stocks that could potentially gauge the returns offered by the industry.

ALSO READ: Did you know about these blue-chip stocks?

Microchip Technology Incorporated (NASDAQ: MCHP)

The company’s microcontroller units or MCUs are the main source of revenue for the company. The MCUs are used in a wide range of electronic devices that are used for daily life operations. Apart from these chips, the company is also expanding in the high-end MCU segment.

Microchip Technology reported net sales of US$ 2.33 billion for the quarter ended March 31, 2023. This marked a gain of 2.9% sequentially and 21.2% on year-on-year basis. The operating income during the quarter was reported to be US$ 848 million, while the net income during the quarter was US$ 604 million.

Image source: ©2023 Kalkine®; Data source: Company Reports

Alongside these results, the company also reported the financial results for fiscal year 2023, wherein net sales came in at US$ 8.439 billion. The operating income for the entire fiscal year was US$ 3.116 billion, while the net income was US$ 2.238 billion for the year.

ALSO READ: Here are the top 10 S&P 500 stocks with a high dividend yield

NVIDIA Corporation (NSDAQ: NVDA)

The company is engaged in the designing of discrete graphic processing units that are used to enhance user experience. These chips are well-recognized as they are used in high-end PCs for gaming and in infotainment systems. The company has also focused on artificial intelligence and autonomous driving.

For the three months ended January 2023, NVIDIA reported total revenue of US$ 11.98 billion. Meanwhile, the operating income during the quarter was US$ 1.857 billion. Additionally, the net income to common stockholders during the period was US$ 2.094 billion.

Image source: ©2023 Kalkine®; Data source: Company Reports

NVIDIA will be releasing its financial results for the first quarter of 2023, which ended April 30, 2023.