In order to address the continuing shortage of chips, there has been a surge in demand across many industries. This is due to technological advances and government support. Given the industry’s solid long-term growth prospects, it is wise to bet on chip stocks Micron (MU), NXP Semiconductors (NASDAQ:), ON Semiconductor(ON), and Kulicke and Soffa [KLIC]) currently. Analysts anticipate that the current semiconductor shortage will continue through next year. The global semiconductor industry saw a 24% increase in sales year over year between October 2021 and October 2021. Also, the possibility of the House’s passage of the $52 billion CHIPS Act by the end of this year and increasing corporate investments to ramp up chip production is likely to ease the situation by the end of 2022. The growing investor optimism in this space is evident in the SPDR S&P Semiconductor ETF’s (XSD) 16.8% gains over the past three months, surpassing the SPDR S&P 500 Trust ETF’s (SPY) 5.1% returns.

Moreover, consistent chipmaking breakthroughs should foster the industry’s long-term growth. By 2026, the global market for semiconductor chips is projected to expand at 7.8% CAGR. It will reach $553.60 Billion.

This backdrop and ongoing market volatility means that fundamentally sound and undervalued chip stock Micron Technology, Inc., NXP Semiconductors N.V., ON Semiconductor Corporation, Kulicke and Soffa Industries, Inc. are all likely to see a rally in near-term.

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