Automakers’ Demand for Chips Is Going to Skyrocket

I recently made a shrewd investment.

It wasn’t stocks, cryptos or even options.

It was a Hyundai Elantra.

I know, I know — it’s unheard of for a gas-guzzling car, notorious for depreciating in value, to be an investment.

But the fact is, when I parted ways with my Elantra, I received 90% of what I paid for it off the lot.

That’s crazy!

I have the global chip shortage to thank for setting me up with this sweet deal.

You may have heard about the chip shortage…

But you may not realize what’s happening behind the scenes.

The Chip Shortage Isn’t Going Away

In short, automakers can’t get the chips they need to build new vehicles.

The lack of chips has capped new cars. That sent prices higher, prompting consumers to look for used vehicles.

Analysts saw the problem ending soon…

But now short supply is expected to stretch into next year.

And I think the semiconductor shortage isn’t going away for a LONG time.

Everything Needs Semiconductors

Call me a pessimist if you want. But I think of myself as a realist.

Everything needs chips.

Smartphones, computers, even your fridge. And not to be overlooked…

Fully electrified cars already use a ton of chips.

For example, a Ford Focus has about 300 chips…

But Ford’s electric models have 10X more.

And since self-driving cars will need even more chips and sensors…

Automakers’ need for chips is going to skyrocket.

Tech Gets Smarter Every Year

Electric vehicles are the future.

Automakers want 50% of their sales to come from them by 2030…

Demand will have to outpace supply.

The thing is, other end-markets are need more chips too.

Tech gets smarter every year.

That’s why chip stocks are up 250% since 2017.

semiconductor index stock exchange chart

(Source: Bloomberg.)

You can invest in chips with the iShares Semiconductor ETF (Nasdaq: SOXX).

Or you can join our Strategic Fortunes subscribers. That way you get access to our favorite technology picks.

After all, semiconductors are just one trend.

But one trend that is truly changing the world as we know it is crypto. It’s shaking up everything from art, finance, trading — you name it, it’s changing.

That’s why it’s critical you sign up for Ian King’s webinar on the future of cryptos.

You can join the special VIP attendee list now by clicking here.

Regards,

Steve Fernandez

Research Analyst, Strategic Fortunes

 

Morning Movers


From open till noon Eastern time.

 

Lenovo Group Ltd. (OTC: LNVGY), the Chinese PC maker, is up 31% this morning. The stock spiked after the announcement that it will be joining Shanghai’s STAR Market, a Nasdaq-style market focused on Chinese science and technology equities.

 

NetEase Inc. (OTC: NETTF) is a Chinese online communications and gaming services company. The stock has been choppy and volatile since the Chinese government brought restrictions against video game companies. It is continuing that volatility with an 18% rise this morning.

 

Vallourec S.A. (OTC: VLOWY) is a French company that makes pipes, tubes and other related products for the oil and gas industry. It is up 15% today with the recent uptick in oil stocks with oil and gas prices rising.

 

SmileDirectClub Inc. (Nasdaq: SDC) is an oral care company that offers clear aligner treatments, and it is up 12%. SmileDirect has long been a favorite of meme traders, and their interest in it seems to have been reignited this morning.

 

Hertz Global Holdings Inc. (OTC: HTZZ), the rental car company operator, is up 10% today after naming former Ford CEO Mark Fields as the interim CEO for the company. Fields is expected to lead the planned turnround of the company.

 

Olaplex Holdings Inc. (Nasdaq: OLPX) manufactures and sells luxury hair care products. The stock is up 9% continuing the excitement around it since its initial public offering last week.

 

Silvergate Capital Corp. (NYSE: SI) is a bank with a proprietary payments platform that allows instantaneous transactions between cryptocurrency traders and exchanges. The bank also originates lines of credit collateralized by bitcoin. The stock is up 8% today, as it tends to move with the crypto markets.

 

AU Optronics Corp. (OTC: AUOTY) is a Taiwanese company that develops liquid crystal displays (LCDs) and other flat panel displays. The stock is up 8% as part of a broader bounce back in Taiwanese stocks after they plunged on the Monday thanks to sell-off in the U.S. markets.

 

KnowBe4 Inc. (Nasdaq: KNBE) operates a platform for cybersecurity awareness training. The stock jumped 8% today after the company announced the steps it would be taking toward becoming a more sustainable, environmentally friendly organization.

 

ThredUp Inc. (Nasdaq: TDUP) operates online resale platforms that allows consumers to buy and sell secondhand apparel, shoes and accessories. The stock is up 7% on positive media attention from sources like the Motley Fool.

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