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Semiconductor Winners And Losers As Of Q2 2021

MarketGyrations profile picture


  • Semis have outperformed in 2021 and there are two catalysts out there that have helped make this a reality.
  • Equipment suppliers are the hottest place to be in thanks to a global investment boom seeking to increase fab capacity.
  • There is increasing evidence chip demand is not as healthy as widely believed, which has serious ramifications for the fab building spree.
  • Long semis makes sense, but caution is warranted as there could be trouble lurking beneath the surface.

The year 2021 is shaping up to be another strong year for semiconductors if the first quarter is any indication. For instance, the iShares PHLX Semiconductor ETF (SOXX) has gained 15.9% in 2021. In comparison, the SPDR S&P 500 ETF (SPY) has gained 7.2% YTD. However, while some semiconductor stocks have done great, others have struggled for various reasons. Why will be covered next.

Semis have done great for the most part

Semis is a label applied to a broad range of companies. SOXX, for instance, is an ETF with up to 30 different stocks. The 30 stocks are Texas Instruments (TXN), Intel (INTC), Broadcom (AVGO), Qualcomm (QCOM), Nvidia (NVDA), Applied Materials (AMAT), Micron (MU), Xilinx (XLNX), Analog Devices (ADI), NXP Semiconductors (NXPI), Lam Research (LRCX), Taiwan Semiconductor Manufacturing Company (TSM), ASML (ASML), Advanced Micro Devices (AMD), Microchip Technology (MCHP), KLA Corp. (KLAC), Skyworks Solutions (SWKS), Marvell (MRVL), On Semiconductor (ON), Qorvo (QRVO), Teradyne (TER), Monolithic Power Systems (MPWR), Entegris (ENTG), Cree (CREE), MKS Instruments (MKSI), Inphi (IPHI), Brooks Automation (BRKS), Lattice Semiconductor (LSCC), Silicon Laboratories (SLAB) and CMC Materials (CCMP).

The table below lists the previously-mentioned companies, their weight in SOXX and their gains or losses. Keep in mind that the stock market crashed in March 2020 due to COVID-19. The magnitude of the stock moves has thus been amplified. If stocks had not fallen, gains would almost certainly be much smaller.


Weight %

Change – 12 months

Change – 6 months

Change – 3 months

Change – 1 month

Change - YTD








































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MarketGyrations profile picture
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Comments (20)

AMD has been a sleeper so far........waiting for earnings release on 4/27.......then I'll make the call on whether or not the CEO needs to go.........vote today will also shed light
grxbstrd profile picture
@hrider2001 Lisa isn't going anywhere
Zipper0 profile picture
US-China tensions will last for decades. If that is what caused some double ordering, then wouldn’t double ordering continue into the future?
MarketGyrations profile picture
China is moving towards using their own chips and/or non-U.S. chips whenever necessary. That's part of the reason why MediaTek is gaining versus Qualcomm.

Having extra inventory on hand is just a temporary measure, not the final solution. Companies want to make sure production lines don't suddenly become disrupted if/when U.S. applies sanctions on the company in question like, for example, what happened to ZTE. It gives companies time to switch to backup plans, which is why companies like Huawei, HikVision, etc. did not suffer the same fate as ZTE when they got sanctioned. They were prepared for what they knew was coming.

Another thing to remember is that holding lots of inventory is not something you want to do if you can avoid it as there is a cost associated with doing so. Just in time production lines are much more efficient.
Zipper0 profile picture
@MarketGyrations Won’t it still take years for China’s chip-making abilities to catch up as well as bring foundries online? During that time, it would seem China would still be forced to keep double booking at existing foundries (for Mediatek’s and all other chips). China’s own build-out of its foundries during this time will also require lots of chip equipment, helping the chip equipment makers. On the other hand, I heard the US is trying to prevent ASML from selling equipment to China, but that just encourages China to keep double booking at existing foundries. So, in the end, whether China keeps double booking at existing foundries or sets up its own foundries, the chip equipment makers will win.
MarketGyrations profile picture
The issue as to how long it will take China to set up production lines without using U.S. equipment, materials, etc. is open to debate. It really depends on who you ask. There's a big gap as to what most analysts, industry experts, etc. say China is capable of and what China itself thinks it is capable of doing. The former says it will take many years (some even say decades), the latter suggests it will happen much, much sooner.

Note that China wants to use its own equipment, materials, EDA, etc, not rely on imported stuff from ASML etc. For instance, China is supposedly testing a DUV photolithography machine with the aim of matching this one from ASML:


If it passes testing/verification, it will be put to use. More advanced (i.e. EUV) lithography, ion implantation, etching/deposition, etc machines are in the pipeline.

Of course, there are many who say China will fall short if it attempts to go domestic only. So I'm not going to say who is right or wrong. That is not for me to decide. I'm just giving you the different viewpoints. Time will tell who was closest to the truth.
06 Apr. 2021
Solid article. I appreciate the industry analysis.
MarketGyrations profile picture
Thank you. Good to hear the article was of some use to you.
06 Apr. 2021
The private sector has some really exciting names in this space. Groq and credo are my favs. Especially Groq.
lshiang profile picture
It is hard to believe that AMD, QCOM and XLNX are the only companies down both for 1st quarter and YTD. And TSMC performance is worse than $SOXX. A correction has to take place soon since it does not make any sense so far this year!
tufttugger profile picture
"Anything that could potentially change this dynamic (between AMD having node and architecture lead over Intel) is considered a headwind for AMD. For instance, new leadership at INTC has raised optimism that INTC could regain lost ground versus AMD. AMD got punished as a result..." <-- This.

AMDs story has earned it higher market forward PEs. Any 'threat' to AMDs story can ding the price. AMD needs to prove the story hasn't changed, and AMD is a huge growth story, especially for all the reasons noted as potential downsides in this article. AMD has their foot in the door with better products. Even if Intel were to match in the future (AMD has a significant lead, helped by TSMC likely keeping node advantage for a couple more years at least), AMD will keep growing share in an expanding market. And not enough merit is given to their GPU technology. With additional growth in GPU, and expected growth in FPGA, AMD is diversifying products in newer growing markets and taking share.

And though AMD did not book enough capacity in their contracts for last year, or likely this year too, for the crazy unmet demand which then dinged their share growth, they will still sell everything, and grow share more (and revenue as a % converts more to earnings as it grows for AMD, so margins will rise). I don't expect that story to change, nor companies to draw down inventories too much. I agree with other commenters that a lot more chips are needed in the future. And supply chain issues will have companies keeping supply on hand ("just in time" supply is going to be less prominent). There will be a build up, but demand should keep growing faster. All good news for AMD (and XLNX), regardless of what their competition does in the medium term.
grxbstrd profile picture
@tufttugger "And not enough merit is given to their GPU technology. With additional growth in GPU, and expected growth in FPGA, AMD is diversifying products in newer growing markets and taking share."

Just a clarification, you're not referring to taking GPU share here, right?
tufttugger profile picture
@grxbstrd Think of it more like, RDNA2 is competitive enough that if AMD had had more supply, they wouldn't be losing share (even perhaps growing some) with gamers in an expanding TAM. No love for AMD valuation there. CDNA is a bit different. More of a kicking tires stage for them on that (like Zen1 was).
grxbstrd profile picture
@tufttugger Potential (which remains questionable due to missing features) is different than doing. "Taking" is active, so after your clarification my point is your statement isn't accurate. AMD lost share last Q as we know. And I expect those dGPU loses to extend or grow through 2021 without a new flagship refresh, plenty of supply or not. RT plays best on NVIDIA is the market perception.

The "why" is also a red herring imo. You state if AMD had more supply. But AMD has plenty of 7nm capacity and they are choosing how they allocate it. They clearly made the choice to not supply GPU to advantage CPU. So by your idea, they could take share from CPU or GPU, right? I'd argue they can't take share from GPU without a competitive RT/DLSS equivalent, that's why Lisa not feeding the GPU product line. So let's not call potential to the same as "taking."
Chip content of modern EV cars are far beyond what’s found in ICE cars. These cars all strive to be smart cars connected and streaming data to and fro data centers which require more capacity and compute to support. 5G has similar vector. Higher quality videos you now stream requires more and more, by default, times a billion and change, the next decade. Netflix now supports 4K for a premium. Imagine in a few years the next step change up to 8K. Those pixels won’t display by themselves using last year’s chipset. People have tendency to extrapolate past into future. Hard for most to grasp what exponential growth means, until it lands, then it’s a given default for all
I am not an expert but for sure every area of life is going wireless and thus RF seems to me to still be in its infancy. The industry has done very well for years but the opportunity is even better for the future. Qorvo & Skywork's success will continue for years.
Angstfrei profile picture
The longterm trend is up and will stay up for an indefinite period. Electrification, digitalization, urbanization and decarbonization are global megatrends that will require more and more semis. Who wants to play semi specialities such as SiC (as key element for car electrification) should also look into Soitec and IFX.
Is the current semiconductor movement a temporal one or a secular trend? Experts in this area, please share your views/opinions on this issue. Thanks
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