The Semiconductors have been on fire as of late. Taiwan Semiconductor Manufacturing Company (TSM) is the world’s largest manufacturer of semiconductors beat analyst estimates for sales for this past quarter and signaled a rebound in the chip sector. Memory chipmaker Micron Technology (MU) reported better-than-expected earnings and say it expects demand to recover in the second half.
But are all Semiconductors on fire. Off the top of my head, I would say no and suggest stick to the name brand semis. However, a fellow mate wanted me to look at three semis: NVIDIA Corporation (NVDA) and Himax Technologies, Inc. (HIMX).
NVIDIA Corporation (NVDA)
Nvidia needs no introduction, but just to remind you, not only is Nvidia the leader in gaming, but also the leader in supplying chips needed for artificial intelligence and high performance computing the data center arena and driverless vehicle market. NVidia was once up over 300%. However, NVidia sold off with the Markets from its all-time high of $289.39 per share back in October. Nevertheless, the stock is up over 20% YTD.
The bullish investing thesis on Nvidia (NASDAQ:NVDA), the current leader in GPUs, is pretty clear. GPUs work better than CPUs for artificial intelligence applications and as a result, the chip maker — and NVDA stock — seem well positioned in a market with what is essentially huge growth potential.
If price is going to get to $200, it must get through this band of support / resistance.
Himax Technologies, Inc. (HIMX)
Himax fabless semiconductor company, provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, the United States, and internationally. The company creates semiconductors for touch screen displays, microdisplays like smart glasses and VR goggles, images sensors for cameras, and more. However, its down over 60% the last several years and was down 61% in 2018. But as some of the new technologies continue to develop, Himax products may soon be more in demand.
First and foremost, its CMOS image sensor business is a promising one. As the world looks for better ways to secure and protect arenas, airports, train stations, and more, Himax may be working on the solution. In fact, the company is working on a machine-vision sensor product line with Emza at the moment. Essentially, machine vision gives an automated way to detect threats in these areas, and considering the market at the moment, demand for its WiseEye AIoT intelligent vision solution could see momentum. There’s also promise in the LCoS business, which is being used in Google’s AR device. While the device from Google may not generate significant revenue for a few years, the product is slated to be met with high demand and gives the company the ability to boost margins in the long run. Finally, the company’s 3D sensing arm could see strong demand as smartphone manufacturers look to include the latest and greatest technologies in their upcoming product launches.
Right now price is at a major monthly support/resistance line at $3.25. If this level doesn’t hold, the chart suggest price will head down to the monthly demand at $1.40 where is would be selling at a major discount. Even if the $3.25 level holds, the next test would be the $5.15 level. I personally would think it would be a buy above $5.15 and a bigger buy at $1.40.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.