Rising investments to address the global semiconductor chip shortage by ramping up production, and a continuing increase in demand for chips from several sectors, should drive the semiconductor industry’s growth. We believe it would be a smart move to acquire shares in under-the radar chip stocks Allegro MicroSystems, MaxLinear and Nova (NVMI). Keep reading. Although the worldwide chip shortage has impacted many industries’ production, the world’s semiconductor sales have increased over the past year. The Semiconductor Association (SIA), reported worldwide sales of semiconductors rose 27.6% year over year and 7.4% sequentially, to $144.8 million in the third quarter. Investors’ increased interest in the semiconductor industry is evident in SPDR S&P Semiconductor ETF’s (XSD) 22.7% gains over the past month versus the SPDR S&P 500 ETF’s (SPY) 7.5% returns over this period.

Due to widespread adoption of 5G, the internet of things (IoT), artificial intelligence (AI) and electric cars (EVs), the demand for semiconductor chips will continue to grow. Many companies operating in the IoT chip market are also increasing production to keep up with rising demand. According to the Expresswire report, global IoT Chips market value is expected to grow at 7.5% annually by 2026.

It might be a smart move to invest in quality chip stocks Allegro MicroSystems, Inc., MaxLinear, Inc., (MXL) and Nova Ltd., (NVMI). In our POWR Ratings, these stocks have been rated either A (Strong buy) or B (“Buy”) in our system.

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