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Rising demand for tech devices from enterprises and their remote workforces has helped the semiconductor industry see a 29.2% year-over-year improvement in sales in the 2021 second quarter. Also, the resurgence of COVID-19 cases due to the rapid spread of its Delta variant should continue to buoy demand for semiconductors primarily from the consumer electronics industry. Furthermore, the demand for semiconductors should continue growing, driven by the ongoing global digital transformation.
Massive government and corporate investments in the semiconductor industry to address the chip shortage have boosted investor optimism in this space. This is evidenced by the SPDR S&P Semiconductor ETF’s (XSD) 7.2% gains versus the SPDR S&P 500 Trust ETF’s (SPY) 3.5% returns over the past month. According to a WSTS report, the worldwide semiconductor market is expected to grow by 25.1% in 2021 and 10.1% in 2022. As such, both TSM and MU should benefit.
