The Safest Semiconductor Chip Stocks to Own in March 2023

Canadians can invest in two safe semiconductor chip stocks, as the country prepares to expand its industry presence and become a reliable semiconductor supplier.

| More on:

Image source: Getty Images

Prime Minister Justin Trudeau will ensure that Canada plays a vital role in North America and become a reliable semiconductor supplier to the global economy. He wants Canadians to be part of the semiconductor ecosystem but admits the role still needs to be determined.

Meanwhile, the federal government announced it would spend $240 million to help Canada expand its presence in photonics and semiconductor manufacturing. Regarding investment prospects in the semiconductor space, the choices are scant.

The TSX Venture Exchange has promising names, except that microcap stocks are volatile. However, on the Toronto Stock Exchange, you can take positions and own the safest semiconductor chip stocks in March 2023.

Celestica (TSX:CLS) and 5N Plus (TSX:VNP) have visible growth potential and could deliver outsized gains over time. As of this writing, the value stocks outperform the broader market.

Record revenue growth

Celestica caters to innovative companies and the world’s best brands. The $2.12 billion company provides high-reliability design, manufacturing, and supply chain solutions across various industries.

Also, as the world’s leading Wafer Fabrication Equipment (WFE) supplier, it delivers the most comprehensive vertical solutions for the top semiconductor WFE manufacturers. At $17.02 per share, the year-to-date gain is 11.53%, while the trailing one-year return is +14.84%. The total return of this tech stock in three years is +204.47%. 

Last year, Celestica’s annual revenue exceeded US$7 billion for the first time since 2011 with 29% year-over-year revenue growth. In the fourth quarter (Q4) of 2022, revenue and net earnings rose 35% and 33%, respectively, to US$2 billion and US$42.4 million versus Q4 2021. For 2023, management projects total revenue to hit US$7.5 billion, or 3.4% higher than in 2022.

Its president and chief executive officer (CEO) Rob Mionis said, “Our ability to successfully execute on our long-term strategy has allowed us to win in markets where we see opportunity for long-term, profitable growth.”  The core business segments, Advanced Technology Solutions (ATS) and Hardware Platform Solutions (HPS), posted record annual revenues, too.

Viable global supplier

5N Plus produces specialty semiconductors and performance materials and focuses on value-added end markets and client partnerships. The $312.7 million company secured strategic arrangements in high-growth sectors, despite inflationary and energy-related cost pressures last year.

The total revenue in 2022 increased 25.8% to US$264.22 million versus 2021. However, 5N Plus incurred a net loss of US$22.99 million compared to a net income of US$3.11 million in the previous year. Still, its president and CEO Gervais Jacques said the company is well positioned for the future.

Besides China, 5N Plus is the only viable global supplier of ultra-high purity semiconductor compounds used in a wide range of critical technologies. The company will also capitalize on the unprecedented demand for terrestrial renewable energy and space solar power applications.

Performance-wise, the basic materials stock is up 21.65% year to date but trades at an absurdly low price of $3.54 per share.

Trilateral semiconductor forum

The first-ever semiconductor forum between the U.S., Canada, and Mexico is being organized and could happen anytime soon. Justin Trudeau said a North American semiconductor industry would prevent overreliance on Asia. Expect Celestica and 5N Plus to be at the front and centre in helping the region achieve its objectives.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Tech Stocks

Shopping and e-commerce
Tech Stocks

1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts

Historically, tech stocks have done well during bull markets. Here’s one you’ll be happy you bought before the next bull…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

edit Sale sign, value, discount
Tech Stocks

2 Cheap Tech Stocks to Buy Right Now

Many tech stocks offer exceptional returns compared to other stock sectors when the market is bullish. You can add to…

Read more »

Hands shaking over a business deal
Tech Stocks

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking to invest $5,000 in the stock market? Here are two of the best growth stocks you can…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Best Software Stocks to Buy in 2023 and Beyond

Salesforce (NYSE:CRM) and Constellation Software (TSX:CSU) are the two best software stocks to buy this year and beyond.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

Read more »

Tech Stocks

2 Best Canadian Stocks Under $10 to Buy Now

Cheap TSX stocks such as Payfare and StorageVault are trading under $10. Both these stocks have significant upside potential in…

Read more »

edit Businessman using calculator next to laptop
Tech Stocks

Better Buy: BlackBerry Stock vs. CrowdStrike

BlackBerry and CrowdStrike are tech stocks part of the cybersecurity segment. Which is a better buy between CRWD stock and…

Read more »