Silicon Carbide Stocks

Silicon carbide (SiC) is a wide bandgap semiconductor material. While naturally found as the gem-grade moissanite, industrial production on an enormous scale allows SiC to be utilized in applications as diverse as abrasives and ballistic armor.

Leading SiC suppliers had recently seen their valuations climb considerably, until Wolfspeed reported disappointing earnings and provided guidance that fell below expectations this week, after which semiconductor stocks focused on this technology saw significant losses.

Microchip Technology

Silicon carbide market growth has been exponential and now ranks as one of the key semiconductor markets, due to its lower energy consumption and increased performance. Some manufacturers within this industry, however, are struggling to meet rising demand – such as CUMI EM, AGSCO Corp, Saint-Gobain and ESD-SIC BV; nonetheless they have invested in research and development as they expand manufacturing capacity, working alongside industry leaders and investing in research & development initiatives for increased capacity expansion as they collaborate together in meeting market requirements.

The slowdown in EV sales has hit chipmakers who specialize in power semiconductors used for electric vehicles hard, yet two of these companies’ earnings reports this week provide hope of an imminent recovery and adoption of power-efficient chip technologies by AI data centers – this may drive demand and boost profits for these products.

Microchip Technology, as the top silicon carbide stock to buy in 2024, is an example of an adaptable company which has successfully navigated shifting market conditions. Revenue and earnings per share (EPS) growth has accelerated over the years thanks to strong tailwinds from silicon carbide market trends; additionally, Microchip has expanded its product offering while creating long-term partnerships with key industry players to increase profitability.

ON Semiconductor Corporation (NASDAQ:ON) is another silicon carbide stock worth investing in at the current time. With numerous growth opportunities and efforts underway to increase manufacturing capacity, ON Semiconductor also diversifies silicon sources while working to set up production in China in order to reduce supply chain risks.

Hassan El Korrey, previously at Cypress and now at ON Semiconductor, is an adept CEO who successfully revitalized a decades-old business by restructuring operations and increasing profitability by eliminating non-essential elements while prioritizing what works – which makes ON an excellent sleeper semiconductor stock to invest in.

Additionally, ON’s sales surged during Q2 of this year due to strong automotive and industrial demand. Furthermore, ON completed several acquisitions intended to accelerate innovation such as TMR sensing which are anticipated to lead to long-term growth.

Wolfspeed and Allegro Microsystems are among the many silicon carbide companies worth considering during this market dip, due to their potential recovery. Although their stocks fell this week, these stocks still possess great upside. While Wolfspeed specializes exclusively in silicon carbide production while Allegro boasts more diversified semiconductor manufacturing expertise; both currently trade at three times revenue and have margins that dropped below 40% for the first time ever – both offer compelling valuations with strong potential growth as the EV market improves.

ON Semiconductor

ON Semiconductor, a pioneer of energy-saving innovations in semiconductor industry, offers an expansive portfolio of energy efficient products across automotive, communications, computing, consumer electronics, industrial and military/aerospace sectors. Their expertise extends from power management, signal logic as well as standard and customized devices tailored specifically for specific challenges.

This firm takes great pride in their sustainability and corporate responsibility initiatives, aimed at improving both employee lives and wider society. Their ‘Earth First’ initiatives involve reducing their environmental footprint, supporting ethical business practices, and working closely with customers to promote sustainability throughout their supply chains.

ON Semiconductor invests both in research and development as well as new technology development. For instance, they have designed a silicon carbide (SiC) power device which uses only half as much current than an equivalent SiO2 device; this could significantly increase efficiency for electric vehicles as well as renewable energy systems.

ON Semiconductor remains confident that its new SiC technology will lead to long-term revenue gains despite global silicon chip demand’s recent drop. They plan on transitioning to 200 millimeter production by 2024, which should increase capacity and margins while returning cash back to shareholders through share repurchases and dividends.

Investors are cautioned that any slowdown in the EV market could negatively impact EV Motors’ performance; however, their strong product portfolio and strategic acquisitions should help them navigate any such downturns and emerge stronger at the other side.

As with other semiconductor companies, ON Semiconductor may experience periodic sales and profit fluctuations, prompting investors to monitor its sales and profit trends to assess its risk/reward ratio.

Onsemi stands out from its competitors by employing a vertically integrated production process for SiC production. This approach allows Onsemi to ensure better quality and shorter innovation cycles, ultimately helping it create more compact yet efficient power modules for applications such as electric vehicles.

IQT has also made significant strides in its sensor division, with advanced ADAS cameras achieving superior market share in an expanding sector. Unfortunately, however, the firm remains dependent on this sector for growth – and large players like STMicroelectronics and Infineon present fierce competition in this arena.

Even amid the challenges facing the semiconductor industry, ON Semiconductor has managed to increase both revenues and earnings over time. Looking ahead, silicon carbide technology demand should only increase over time, making ON Semiconductor one of the top long-term investments.

Allegro Microsystems

Allegro Microsystems (ALGM) is one of the many chip stocks benefitting from the surge in electric vehicle demand. The company specializes in power and sensing semiconductor chips for motion control and energy-efficient systems, as well as designing power products – which were introduced at Electronica 2024 – designed to address growing power demands across automotive, industrial and data center applications – improving efficiency while simplifying design and reducing costs.

The company’s new product lineup features 48V motor drivers – A89212 and A89224, APM81815 buck regulator, as well as the isolated gate driver AHV85311 offering high-side power switching with low parasitic current. All these chips can extend battery life for eBikes and power tools; optimize fan and pump performance in automotive systems; enhance thermal management in AI servers; simplify power regulation for electric power steering/motor drives.

Allegro Silicon Carbide Corporation has seen impressive sales growth over the past three years despite slowdown in semiconductor production; yet profits are still relatively modest despite such rapid expansion.

That is because the company is investing significantly in research and development (R&D), as well as having an established presence across Asia. That means investors should anticipate revenue to continue increasing over the years ahead.

With revenue and earnings projected to expand, it may be worth buying during this recent market dip. Not as crowded as some mega-cap chip stocks, it may offer better risk/reward ratio than its peers.

Allegro Microsystems’ growth potential and dividend yield make it an attractive income-generating stock. Over the past five years, its annual dividend increase has averaged 10% per annum – making Allegro an appealing dividend stock option.

Silicon carbide is an innovative technology with tremendous potential across the electronics, electric vehicle (EV), and renewable energy sectors. Thanks to its exceptional reliability, power density, and thermal conductivity features it has quickly become one of the industry favorites. Three silicon carbide stocks could reap large gains as demand for their transformative technologies surge – this makes them among the top chip stocks to invest in for long-term profits.