Top 10 Semiconductor Stocks

Most of the growth in the semiconductor industry these days is due to consumer products. Semiconductor companies stand to gain from the iPhone phenomenon and the convergence device movement, which is only at the beginning of its incredible growth curves. I recently listed the 3G iPhone’s Top 5 Component Beneficiaries. Here I look at the top 10 semiconductor stocks that have positioned themselves well to milk these developments in smartphones and convergence devices.

1. Qualcomm
With its legal troubles with Nokia coming to an end, top wireless semiconductor company Qualcomm (QCOM) is on a roll. It is also a major beneficiary of the 3G iPhone without having a single chip inside it. Suggested reading: 3G iPhone and Qualcomm, Vijay’s Valuation Series, stock analysis from Q108, Q208, and Q308.

2. Broadcom
With its design win for the touchscreen controller and its revenue-sharing deal with Infineon for the GPS chip in the iPhone, Broadcom (BRCM) is a top beneficiary of the 3G iPhone. Suggested reading: Vijay’s Valuation Series, stock analysis from Q407, Q108 and Q208.

3. Marvell
Marvell Technology (MRVL) has the design win for the Wi-Fi single chip in the 3G iPhone. Its options backdating issue and the liabilities of the 2006 Intel Deal are a thing of the past, and things look promising. Suggested reading: Vijay’s Valuation Series, stock analysis from Q407 and Q108.

4. Nvidia
Nvidia (NVDA) is a pioneer in the development of GPU, a class of chips for graphics processing found in all display cards. It targets the high end of the market, e.g. the gamers. With Intel (INTC) and AMD (AMD) (with the help of its ATI acquisition) jumping onto the GPU bandwagon, Nvidia was forced to cut its prices, leading to its first loss in six years. Shares are at an all-time low because of a recent quality fiasco. But the graphic chips market is bound to grow and Nvidia’s technological edge will see it through.

5. Intel
The world’s largest semiconductor company, Intel (INTC) is set to take on the convergence device movement with its Atom processor. Through the Larrabee project, it is also developing an advanced GPU to take on Nvidia. Suggested readings: Intel’s Multi-core Future and Intel Shines Even Without iPhone.

6. STM
STMicroelectronics (STM) is a major beneficiary of the convergence device movement. With its JV with NXP, it has all the necessary raw materials for the convergence platform. Its design wins in the iPhone and from Nokia and Sony Ericsson have given it the necessary recognition to catapult to the No.3 position in the wireless semiconductor industry. Suggested reading: ST Microelectronics: Strategy , Valuation Series, stock analysis from Q108 and Q208.

7. Infineon
A major beneficiary of the iPhone with four design wins in the 3G iPhone, Infineon (IFX) figured at the top of my list of 3G iPhone’s Top 5 Component Beneficiaries. Suggested reading: Vijay’s Valuation Series, stock analysis from Q108 , Q208 , and Q308 .

8. Tessera
Tessera (TSRA) is a great IP licensing company that is bound to benefit from the convergence device movement with its IP for chip packaging that drives electronics miniaturization. Suggested reading: Tessera’s Roll-Up Strategy, stock analysis from Q307, Q407, and Q108.

9. IDCC
Interdigital (IDCC) is another IP licensing company that is a strong beneficiary of the iPhone due to its licensing deal with Apple and its Infineon alliance. Suggested reading: Vijay’s Valuation Series, stock analysis from Q407, Q108, and Q208.

10. TI
Texas Instruments (TXN) is another important beneficiary of the iPhone and but for its flawed baseband strategy, it could have figured as a top beneficiary of the convergence device movement. TI can recover lost ground through some acquisitions. Suggested reading: Vijay’s Valuation Series stock analysis from Q108 and Q208.

Comments

[Takayama:]

iPhone is not on my want list.
I target the Lenovo net-book S10.

2008 Aug 15 01:32 AM

[DAVEB4444:]

MY I-PHONE EXCEEDS MY EXPECTATIONS 10X.

2008 Aug 15 06:09 AM

[principle:]

Who really thinks Nvidia has some technological lead over AMD or INTEL? Thats just funny. Both AMD and INTEL have loads more technology than Nvidia, which is why NVDA is in trouble. Nvidias technology right now was to throw as many circuits on a die as possible which makes the die larger, fewer on a wafer, lower yields/reliability from the ones that survive. Nvidia has been lucky that software programmers favored their architecture and drivers. Nvidia is a good company but I wouldnt say they have any technology edge in the semiconductor business. The only reason they have grown this large is the absence of competition because they bought them all out in the 90s or they were competing with Intel or VIA who dont care about graphics, and then ATI showed up and gave the world better products and competition to Nvidia.

2008 Aug 15 07:50 PM

[TinyTim:]

any disclosures?

2008 Aug 16 05:27 PM

[tsuprem4:]

anybody knows why IDCC stock going up from nov08 till jan09, while others going down?

Feb 27 01:14 AM