KLIC - 1 Monster Opportunity in the Global Chip Shortage
Although we have been dealing with it for a year now, the world is still in a semiconductor shortage. The pandemic caused a surge in demand for digital solutions, from artificial intelligence to the Internet of Things to cloud computing and more. Yet more production capacity is expensive and time-consuming, with the industry caught off-guard after the trade war of 2018 and onset of the COVID-19 pandemic in 2020.
And even though demand for semiconductor equipment is roaring back, many semiconductor equipment stocks have sold off recently with the general technology market. That doesn't make much sense, given that these companies have record backlogs and have already sold out for the year.
Furthermore, semicap (or semiconductor capital) equipment stocks are trading at below-market multiples, despite generating lots of cash. Yet even among semicap equipment stocks, advanced packing company Kulicke & Soffa (NASDAQ: KLIC) is especially cheap. And it just raised its buyback program in a big way to a large part of its market cap. That could be a big opportunity for shareholders.
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1 Monster Opportunity in the Global Chip Shortage