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Savvy investors pile into semiconductors

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Semiconductors, or chips, should be included in investment portfolios if anyone is serious about growing wealth over the next decade, according to the CEO and founder of independent financial advisory and fintech deVere Group.

Amid an escalating, trillion-dollar chip battle between geopolitical superpower rivals, US and China, the Japanese government also announced it is overhauling its chip strategy to triple sales of domestically produced semiconductors to over $108 bln by 2030.

France confirmed it is to plough $3.1 bln of public money into a factory to make microchips, as both Europe and the United States have passed so-called Chips Acts.

In addition, chipmaker Nvidia this week briefly broke into the club of companies with a $1 trln market cap.

“Semiconductors are tiny, but these mighty chips power our world. They are fueling this current industrial revolution,” said deVere chief executive Nigel Green.

“Semiconductors are at the forefront of technological progress. As our reliance on electronic devices continues to grow, the demand for semiconductors is skyrocketing – and will continue to do.

“From smartphones and computers to automobiles and advanced infrastructure, semiconductors are indispensable in powering our daily lives. This ever-increasing demand has created a fiercely competitive market, with companies vying to capture larger market shares and gain technological superiority.”

Green explained that beyond their technological significance, semiconductors have also become critical strategic assets. They are vital for national security, defense applications, and emerging technologies such as artificial intelligence, 5G, and the Internet of Things (IoT).

“The ability to control semiconductor manufacturing and develop cutting-edge chip designs has become a matter of top level strategic importance for countries and companies alike,” he said.

Against this backdrop, Green added that investors looking to create and build wealth for the long-term should include exposure to chips in their portfolios.

No brainer

“Their far-reaching – and growing – impact on our lives makes it a no-brainer for almost everyone to have semiconductors within a well-diversified portfolio.”

However, his bullish approach does come with a warning.

“But, with every boom, there will be winners and losers. A good fund manager will be critical in helping you make informed decisions,” considering that semiconductors have become entangled in geopolitical tensions and economic considerations.

Major powers such as the US and China are engaged in a race for technological supremacy, with semiconductors at the forefront.

Concerns about intellectual property theft, national security risks, and economic dominance through control over semiconductor technology have prompted trade restrictions, export controls, and investment scrutiny, further fueling the battleground.

“Semiconductors will remain a fiercely contested battleground for market dominance and technological advancements.

“Their strategic importance is what makes them such an attractive, a potentially hugely rewarding, proposition for savvy investors keen to build wealth over the next decade,” the deVere Group CEO concluded.