Increasing government investments on a global scale are expected to boost semiconductor production. The chip supply will be less in the next quarters due to this. This means that the industry’s chip sector is in a strong position to continue growing, thanks to the increasing demand for chips from many industries within the digital age. This should bode well for fundamentally sound large-cap semiconductor stocks Broadcom (NASDAQ:), STMicroelectronics (STM), United Microelectronics (UMC), and Qorvo (NASDAQ:).Although COVID-19 lockdowns in Malaysia have exacerbated the global chip shortage, governments’ initiatives worldwide to keep critical factories up and running and address supply chain vulnerabilities bode well for semiconductor manufacturers. As chip suppliers allocate capital, increasing supply to electronic and automotive markets will help to decrease the gap. The World Semiconductors Trade Statistics estimates that the world’s semiconductor market will increase by 25.1% between 2021 and 2023.

Investors’ confidence in the semiconductor industry is evident from the iShares Semiconductor ETF’s (SOXX) 59.8% return over the past year. Global semiconductor sales are expected to grow 7.7%, reaching $778 billion in 2026.

We believe it is a smart move to invest in quality stocks of large-cap semiconductor companies such as Broadcom Inc., STMicroelectronics N.V., United Microelectronics Corporation, and Qorvo, Inc. Their market dominance, constant innovations and wide portfolio are all expected to result in substantial returns.

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