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While many analysts thought the shortage would get better towards the end of the year as the vaccines rolled out, that may no longer be the case. Apple (NASDAQ:AAPL) CEO Tim Cook warned that silicon supply constraints would affect sales of the iPhone and iPad. This week Toyota Motor Corp (NYSE:TM) announced it would reduce global production for September by 40% from its previous plan due to critical shortages of semiconductors.
Since the shortage reflects a tight supply, this has been a boon to the semiconductor industry and many chip stocks. With the shortage expected to continue, many chip stocks are ripe for continued gains. That’s why investors should consider chip stocks such as Intel Corporation (INTC), Silicon Motion Technology Corp. (SIMO), and Broadcom Inc. (AVGO), which are rated highly in our POWR Ratings system.
