Small things make big changes. This premise is perhaps the one that best suits the market for chips, Those little processing units that are crucial in contemporary technology.
Today it is unthinkable to conceive the operation of hundreds of devices without the existence of these semiconductors.
From something as everyday as a smartphone or a smart watch to space stations, countless mechanisms depend on the operation of these small elements, which have been able to digitize everything around us.
The importance of these chips it has resulted in a particularly attractive market, with overwhelming growth potential.
Data provided by Statista indicate that during the past year more than 1,000 million chips worldwide, generating sales of more than $ 440 billion.
In the same way, this market is expected to maintain a growth rate of 8.6 percent per year, with which by 2028 its value is expected to reach 800,000 million dollars.
With these figures it is clear that the industry of chips or semiconductors creates an attractive market for investors. However, since last year a shortage of chips worldwide, after the main manufacturers had to reduce or halt their production, due to the closure of economies.
This caused that many industries like the automotive one had to limit their production; However, the health emergency also generated high demand, with more and more companies and consumers having to work remotely, which required technologies with high processing power.
In this sense, and with the habits and needs inherited from the pandemic, the market for chips will grow and in a timely manner there will be four factors that will inevitably impact the actions of this sector:
5G technology
The next generation network is already active in some parts of the world. The 5G network promises faster connection speeds and data transfers, which will be demanded by devices with chips more powerful. In the near future, many more devices will connect and become “smart”, using Internet of Things (IoT) and 5G technology, both of which require the use of more semiconductors.
Automotive Industry Technology
The bet on electric cars is a reality for a growing number of players in the industry. To this must be added the intention to generalize autonomous driving technologies. Both changes are high-tech processes that will require a significant number of processors. The demand for these components will be exponential within the automotive industry.
Smart cities
With 5G networks, machine learning systems, image recognition, and many other technologies, cities around the world are getting smarter. With this it is expected to improve the center and functioning of many daily activities. This new generation of cities demands a combination of different technologies, hardware Y software, which will also increase the need for semiconductors.
With this in mind, investors have found it to be an attractive sector and are struggling to seek information that allows them to measure the potential of semiconductor companies listed on the world’s stock exchanges. In platforms like eToro It is possible to find a variety of securities directly related to this industry, which are listed on the US and European stock exchanges. Likewise, it is possible to study different strategies followed in the portfolios of other users or even in the automated portfolios of eToro.