- Chips are digital steel pushing America into the Fourth Industrial Revolution.
- Semiconductors are primed to surge to a $730 billion market by 2026, but two auto innovations will make it a strong buy in 2021.
- I’ll share two chipmaker ETFs and how to get Paul’s small-cap Super Bull stock to buy today!
Invest in the technology that creates a multibillion-dollar revolution.
That’s the dream.
And in 2021 that tech will be semiconductors.
Chips are becoming part of our everyday lives. I bet you’re using one now without even thinking about it.
Anything that’s computerized today depends on semiconductors — TVs, smartphones, tablets, home devices, even cars.
Remember build the machine that makes the machine … or the tech that makes all of those devices work!
Chips are digital steel pushing America relentlessly into the Fourth Industrial Revolution.
Its market size is expected to increase 42% by 2026, growing from $513 billion in 2019 to $730 billion in 2026:
But there’s one industry poised to be transformed that will send semiconductors soaring in 2021.
Each year cars are getting smarter, faster and more connected due to groundbreaking innovations in semiconductor tech.
There’s no escaping this transformation. And we don’t want to! There are massive profits ahead for us by investing in the chipmakers that make modern cars.
I’ll tell you about two auto innovations and three semiconductor buys to grab for 2021.
Chip Tech No. 1: Advanced Driver Assistance Systems
Every time I drive, I’m immediately reminded how far automotive tech has come in such a short time.
As soon as I put my car in reverse, not only do I have the safety and convenience of the front and backup cameras, but also a 360-degree bird’s-eye view of the car and all of my surroundings.
It’s like a satellite view of the car in real time.
And the tech that makes it possible? You guessed it. Semiconductors.
So your first automotive tech positioned to grow the semiconductor market in 2021 is advanced driver assistance system (ADAS) technology.
ADAS assists drivers with semiconductor chips built into cars of today.
From self-driving sensors to blind spot monitoring, to lane keeping assistance to forward-collision warnings, today’s cars are built to help keep drivers and passengers safer.
The technology advancements in ADAS are always moving forward.
Overall, the ADAS tech market is expected to reach $67.4 billion by 2025, growing at an impressive compound annual growth rate (CAGR) of 19%.
Chipmakers around the globe anticipate growth in this sector and are ramping up production to meet the demand.
For example, one of the world’s leading semiconductor companies just unveiled a suite of new chips for ADAS technology.
ADAS tech is on the move with semiconductor chips leading the way.
Chip Tech No. 2: Electric Vehicles
It’s no secret that we’re all big electric vehicle (EV) fans.
Paul Mampilly is a very happy owner of a Tesla, after all.
Paul is not alone in his EV early adoption and loyalty.
Per Allied Market Research, the global EV market value is projected to soar 396% by 2027.
Valued at $162 billion in 2019 the market is forecast to reach a staggering $803 billion by 2027. This is a remarkable CAGR of 22.6%:
But, next year is setting up to see an accelerated use of semiconductor chips in EVs.
Per Bloomberg data, a projected 2021 “auto rebound is set to spark chip demand,” especially in the EV market.
Due to more incentive programs and the favorability of greener transportation, EV sales are set to surge in 2021.
EVs are chock-full of semiconductor chip technologies.
Right now, an average EV contains $572 to $834 worth of semiconductor chip content versus $300 to $500 for the overall auto industry.
3 Ways to Play the 2021 Semiconductor Surge
Semiconductors are at the heart of the Fourth Industrial Revolution.
It’s going to be a top investment for 2021 as the tech transforms more industries as it is in the auto world.
So today, I have three ways for you to put your money in the chip explosion.
The first two are exchange-traded funds (ETFs). Some of you have asked what the difference is between an ETF and a stock.
An ETF is basically a basket of stocks. You can gain broad exposure to a sector by investing in an ETF, but it trades like any other stock.
So here are your chip ETFs for today:
No. 1: Buy the VanEck Vectors Semiconductor ETF (Nasdaq: SMH). So far this year, SMH is up 31.9%. This ETF has 25 different semiconductor stocks that you can invest in with one buy.
No. 2: Buy the SPDR S&P Semiconductor ETF (NYSE: XSD). XSD rose 30.94% so far in 2020. This ETF will give you a chance to lock in profits from 38 different active companies in the semiconductor sector.
Now for the stock. By buying a single stock, you’re investing in one company. It can be more volatile than an ETF but lead to big gains:
No. 3: Get the small-cap semiconductor stock. Paul’s Extreme Fortunes research service has a great stock for 2021’s chip boom. We are super bulls when it comes to this technology. And this service targets stocks with explosive 1,000% potential from small stocks usually under $10. Check out Paul’s Super Bull Summit and find out how to unlock his stock pick here.
Until next time,
Director of Investment Research, Banyan Hill Publishing
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