8 Best Semiconductor Stocks Of June 2024 (2024)

Taiwan Semiconductor, as the name implies, is located in the Asia-Pacific region. That proximity to big APAC technology firms has provided it with deep relationships as a key supplier for the region.

TSM specializes in fabrication operations rather than the research and design of new and innovative chips, meaning it commands lower margins than some of the flashier semiconductor stocks out there. But since many leading firms are fundamentally “fabless,” meaning they have no manufacturing capacity of their own, there is built-in business for TSM every year as it is contracted to turn designs into real hardware.

Based on this operating model, there’s perhaps no company more tied to the broader industry, so it’s no surprise that revenue slumped slightly in 2023 but is on track for a 22% rebound in 2024.

While trillion-dollar Nvidia Corporation (NVDA) has been turning heads, Broadcom is no slouch as the #2 largest U.S.-based semiconductor company.

In addition to its massive scale, AVGO also offers a much more generous dividend than NVDA, with an above-average yield that even tops the 1.4% offered by the typical corporation right now. Broadcom has successfully weathered recent disruptions in the marketplace, and it is currently projecting a mammoth 40% increase in revenue for fiscal 2024.

With a much more generous dividend than Nvidia and much less of the volatility that characterizes its larger rival, AVGO is a great combination of steady dividend-producing operations plus significant growth potential in the coming year.

Speaking of “fabless” chipmakers, Qualcomm predominantly relies on third parties to produce its best-in-class semiconductor products for wireless communications. That includes a key design for smartphone leader Apple (AAPL), including chips that provide 5G connectivity for iPhones.

There’s risk in this model, though, as the loss of a big contract with a firm like Apple could result in a significant reduction of its footprint. But QCOM has been a leader in the space since its formation back in 1985, and it has a reliable enough revenue stream to fuel a decent dividend.

What’s more, QCOM has more than enough capital to ensure those dividends keep going strong. As of the end of its fiscal year in September 2023, it boasted $11.3 billion in cash and equivalents on its balance sheet—a huge war chest to fuel growth, support its dividends and weather any potential storms on the horizon.

While perhaps not quite as much a household name as other semiconductor stocks on this list, the strong outperformance of Lam Research in 2023 is proof that this is a company worth paying attention to.

The reason you may not have heard about the company is logical, too, since Lam isn’t a design shop or semiconductor foundry but rather a key supplier of wafer-fabrication equipment and related services that make the global chipmaking industry run.

However, LRCX is still significant in size with a more than $100 billion market cap and more than $15 billion in annual revenue projected in 2024. Furthermore that sales total is expected to grow roughly 18% in the second quarter thanks to the sector-wide recovery and a good chance of continued investment in its gear as a result of that rebound.

You might think it’s counterintuitive that a firm with “analog” in its name would be a leader in the digital age. But that’s the catch, as Analog Devices specializes in sensors and data converter products that translate real-world analog signals into digital data that can be sorted, analyzed and used effectively in a 21st-century economy.

While revenue slumped over the last fiscal year, ADI is tracking a double-digit growth rate in 2024 as a sign that things are looking up. Shares slightly topped the performance of the S&P 500 across all of 2023, but more importantly they are up significantly from their 52-week low in October 2023.

Microchip Technology is a great example of a stock that has been very volatile over the last few years but is decidedly looking up in 2024.

MCHP is a top provider of microcontrollers, a chip that controls a specific function in a specific piece of gear, meaning its customers slant heavily toward industrial end-users who have unique needs in their production processes.

Considering 41% of revenue comes from these clients, that means a very cyclical outlook that’s dependent on the broader macroeconomic picture. After a better-than-expected 2023, however, with employment looking up and inflation easing off, MCHP is poised to take advantage of this brighter outlook in the year ahead.

Taiwan’s United Microelectronics operates as a semiconductor foundry, providing circuit design, assembly and testing services for “fabless” design shops that don’t have their own manufacturing capacity.

These characteristics make it very similar to the larger Taiwan Semiconductor.

However, what makes UMC worth considering is its huge income potential, with an annual dividend that is approximately five times the S&P 500 right now. Admittedly, that distribution is only paid once a year in the summer. But if you’re patient and in it for the long haul, UMC is a semiconductor stock worth considering—particularly with its outlook of 16% revenue growth in the next fiscal year.

Currently trading near its all-time high, ASE Tech Holding is another income-oriented chipmaker that pays a generous distribution on an annual cycle. It’s also one of the better performers on this list, in part because this Taiwanese chipmaker is also one of the smallest.

While ASX definitely took it on the chin during late 2021 and early 2022, its modest size and more agile operations mean it can move a bit faster than some of its larger peers to capitalize on the strong outlook for the sector in 2024.

In fact, it has projected double-digit revenue growth for 2024, but more importantly a roughly 50% jump in profits. That bodes well not just for shares but also for the potential of greater dividends supported by this stronger stream of profits going forward.