The continuing global semiconductor chip shortage has hampered production in various sectors. However, President Biden’s efforts to address the crisis and rising demand from several industries should propel the chip industry’s growth. Therefore, we think dividend-paying chip stocks Broadcom (NASDAQ:AVGO), Intel (INTC), and United Microelectronics (UMC) could be ideal bets now. Also, these stocks are rated Strong Buy in our proprietary POWR Ratings system. So, let’s discuss these names.Analysts expect the global semiconductor shortage to persist in 2022 due to increased demand for electronics, electric vehicles (EVs), and other products that require semiconductor chips to operate. However, the CEO of Mubadala, Abu Dhabi’s state investment fund and a major shareholder in chipmaker GlobalFoundries, believes the semiconductor industry is on track to record exponential growth over the next decade. He added that chipmakers are poised to play a “crucial” role in the global economy.
Rising demand from several industries, including consumer electronics and electric vehicles (EVs), and the Biden administration’s pressure on Congress to pass a $52 billion spending bill before Christmas to tackle the crisis should drive the semiconductor industry’s growth. The global semiconductor chip market is expected to reach $553.6 billion by 2026, registering a 7.8% CAGR.
Given this backdrop, along with rising inflation and expected market volatility due to the effects of the COVID-19 omicron variant, we think it could be wise to bet on dividend-paying chip stocks Broadcom Inc. (AVGO), Intel Corporation (NASDAQ:INTC), and United Microelectronics Corporation (UMC). This is because dividend-paying stocks can reduce overall portfolio risk. Also, these stocks are rated Strong Buy in our proprietary POWR Ratings system.