While the electric vehicle (EV) industry suffered this year due to the global semiconductor shortage, initiatives worldwide to push toward a clean energy-based future, and an increased focus on ramping up semiconductor production, should drive the industry’s growth next year. Therefore, we think EV chip makers QUALCOMM (QCOM), Microchip (MCHP), and ON Semiconductor (ON) should benefit. Read on.Semiconductors are the key components for electric vehicles (EVs). The aggregate value of semiconductors used in EVs is twice the value of chips in any internal combustion engine. Therefore, the expected surge in demand for EVs should drive the demand for semiconductors.
And while the global semiconductor chip shortage has marred the EV industry’s growth this year, government initiatives to transition to a zero-emission environment, and an increased focus on ramping up semiconductor production, should drive the industry's growth next year. By 2025, global electric vehicle production is expected to rise four-fold to more than 11.6 million units.
Therefore, we think prominent EV chip makers QUALCOMM Incorporated (NASDAQ:QCOM) and Microchip Technology Incorporated (NASDAQ:MCHP), and ON Semiconductor (ON) should benefit.