Skip to main content

Semiconductor rankings out - roadmap to investment opportunities?

"We're all pilgrims on the same journey-but some pilgrims have better road maps."
- Nelson DeMille
We write here on a fairly regular basis about semiconductor companies. IC Insights just came out with their Semiconductor Supplier Ranking for the first half of 2008. They provide two charts, one based on sales and one based on growth rate.

There are some interesting aspects to the rankings that are worth reviewing.

Qualcomm (QCOM) is a company that we previously held in our trading portfolio. It recently saw its stock jump based on the ending of litigation but it was a big gainer in the rankings due to exceptional sales growth. QCOM moved up four spots and is now considered the 10th largest semiconductor manufacturer based on sales and is the number two stock based on growth rate.

Taiwan Semiconductor (TSM), a company we recently wrote about (read the post here), made gains in both rankings as well. The company moved from sixth to fifth place based on sales and is the top stock based on growth rate.

Another stock we have written about here, SanDisk (SNDK), did not make the top 20 on either list.

The continuing malaise in the DRAM sector is well illustrated by Qimonda which dropped 12 positions from being ranked 18th overall in 2007 to 30th in 1H08.

We have written about the trend toward "fabless" semiconductor companies and discussed why Taiwan Semiconductor would benefit. Two companies that made good gains in the rankings happen to be fabless: Qualcomm, discussed above, and Broadcom which jumped three positions and is now ranked number 20 based on sales and number 6 based on growth rate.

AMD, despite being left for dead by the financial media, actually registered a 9% growth rate y-o-y and, though it dropped four positions, managed to hang in at number 15 in the rankings based on sales.

As can be seen, there are companies that have managed to shine in spite of a slowing global economy that is impacting semiconductor sales. Unfortunately, it seems that the stock price doesn't always track the rankings and some of the top ranked stocks are in nasty down-trends. Values or value traps? The fact that IC Insights provides a list of biggest by sales and best by growth rate allows an investor to cross reference between the two lists to find solid companies with critical mass and an aggressive growth rate.

An investor could do worse than to pick their semiconductor stocks from the top 20 lists provided by IC Insights. I would encourage readers to read the report at IC Insights to review the lists and draw their own conclusions.

Disclosure: none

Sources: Shakeups Rock 1H08 Top 20 Semiconductor Supplier Ranking

Comments

Popular posts from this blog

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street profess

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing wh

Interactive Ads - Google one-ups Yahoo again

Google's ( GOOG ) press release describing the expansion of a beta program for what are being called Gadget Ads has again shown that Google is unparalleled at melding technology and advertising to benefit its bottom line. Gadget Ads are mini-web pages or "widgets" that can be embedded within publisher pages. I have written in the past on Yahoo's ( YHOO ) Smart Ads and how, by more precisely targeting site users and adjusting ad content accordingly, they provide a much desired evolution of the banner or display ad format. Though Smart Ads and Gadget Ads are not really the same, I think it is fair to say that Google has seen the challenge of Smart Ads and has chosen to leapfrog Yahoo by rolling out its own update to the display ad format. The evolution of the Gadget Ad -- One of the trends on the Internet over the last year or so involves software developers creating "widgets" which can be hosted within web pages and blogs. Widgets can be pretty much any