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Amid a global semiconductor chip shortage, rising demand from several industries, including automotive and consumer electronics, has increased chip prices. Furthermore, in the second quarter of 2021, worldwide semiconductor sales increased 29.2% year-over-year. To address the problems caused by the shortage, governments and corporates worldwide are investing to boost semiconductor production. And the U.S. Senate has passed a landmark bill that includes $52 billion in planned spending to increase domestic production of semiconductors.
The global semiconductor market is expected to grow 25.1% to $551 billion in 2021. Given the favorable industry backdrop and the prevailing low-interest-rate environment, small-cap stocks ACLS and AXTI should benefit.
