Surging demand for semiconductor chips from almost every sector and considerable investments to address the supply shortage should drive the industry’s growth. Micron (MU) and Marvell Technology (NASDAQ:MRVL) should benefit from the tailwinds. But which of these stocks is a better buy now?.Micron Technology, Inc. (NASDAQ:MU) and Marvell Technology Group Ltd . (MRVL) are two prominent players in the global semiconductor industry. MU manufactures and markets a portfolio of memory technologies for solid-state drives, modules, multi-chip packages, and other system solutions. On the other hand, MRVL offers a security and networking platform, secure data processing, networking, and storage solutions. It designs, develops, and sells analog, mixed-signal, digital signal processing, embedded and standalone ICs, and a portfolio of Ethernet solutions.
Despite the supply shortage, the global semiconductor industry witnessed a 29% year-over-year sales growth in July 2021. Rising government and corporate investments in the semiconductor industry should gradually eliminate the shortage and help the producers meet the skyrocketing demand. Malaysia, home to suppliers and factories serving semiconductor makers, has started its production with almost 80% capacity in September.
Investor interest in the industry is evident from the SPDR S&P Semiconductor ETF’s (XSD) 5.1% gains over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) marginal returns. The global semiconductor market is expected to grow at a 7.7% CAGR to $778 billion by 2026. So, both MU and MRVL should benefit. In terms of their past three months’ performance, MRVL is a winner with 4.3% gains versus MU’s negative returns. But which of these stocks is a better pick now? Let’s find out.