Semiconductors are small chips used to manufacture nearly every consumer electronic. From computer chips to medical equipment, and smartphones to 5G mobile networks, our modern lives depend on these tiny silicon wafers. Most of them could easily fit on the tip of your finger.
Canada’s semiconductor industry isn’t nearly as large as those of the United States or Taiwan. That said, the Canadian government did allocate $240 million for research and development in the field. This comes as global demand for semiconductors has surged at the same time supply has dwindled. Chip shortages have made semiconductor companies especially optimistic on production.
Despite the recent slowdown in semiconductor growth stocks, which have been hurt lower consumer spending, these companies are still an investment you might want to consider. If you’re looking to invest in future microchip technology, here’s what you should know about investing in semiconductor stocks.
What are semiconductor stocks?
Semiconductor stocks can fall into a variety of market sectors, ranging from companies that mine silicon to chemical plants that turn it into materials. However, we typically associate them with the tech sector.
And, like other tech stocks, semiconductor stocks can be especially volatile. Companies that perform well in this sector are those that can generate sustainable revenues, keep costs low, and reinvest capital in research and new technology.
Top semiconductor stocks for Canadian investors
Many of the largest semiconductor companies are headquartered in the United States. That said, Canada has some exciting growth stocks in this industry. It would be foolish to overlook up-and-coming tech companies trading on the Canadian stock market.
For diversity, let’s look at three big U.S. semiconductor stocks and one growth Canadian company.
| Semiconductor Stock | Description |
| Nvidia (NASDAQ: NVDA) | A leader in the development and design of GPUs |
| Intel (NASDAQ: INTC) | The world’s largest logic chipmaker and key developer of new technologies |
| Texas Instruments (NASDAQ: TXN) | The world’s largest manufacturer of analog chips |
| POET Technologies (TSXV: PTK) | Toronto-based company that’s integrating photonics and electronic devices into one chip |
Nvidia
Gamers across the world know Nvidia by its iconic memory chips and gaming cards. As such, Nvidia is a global leader in producing a certain kind of semiconductor, the “graphics processing unit” or GPU.
But video game graphics is only one segment of Nvidia’s semiconductor operations. The other segment, Compute & Networking, uses semiconductors for a mind-numbing amount of operations. For instance, it has developed a cloud computing platform that helps accelerate a number of data centre tasks, from artificial intelligence to high-performance computing (HPC). It also develops GPUs for high-level cryptocurrency mining.
During the pandemic, consumers rushed to video games for entertainment, and Nvidia’s market cap exploded and it has continued to surge. Nvidia is now neck and neck with Apple as the most valuable company in the world as of January 2025, with a valuable of almost $3.5 trillion.
Intel
Intel is one of the world’s largest semiconductor manufacturers. It is also a key developer in the x86 series of microprocessors, the central unit found in almost all personal computers.
For much of the early 2010s, Intel enjoyed an unrivalled position in the semiconductor industry. But Intel became relatively complacent, and did very little to beat back the competition that was gradually gaining momentum.
With the arrival of new chip-producing giants—such as Nvidia and Taiwan Semiconductor Manufacturing—as well as manufacturing blunders, Intel fell behind. It has been struggling to keep up ever since.
In December 2024, Intel’s CEO Pat Gelsinger was ousted after the board lost confidence in his turnaround strategy, following a 33% decline in revenue and missed opportunities in chip manufacturing contracts with major clients like Microsoft and Amazon. Following Gelsinger’s exit, Intel appointed David Zinsner and Michelle Johnston Holthaus as interim co-CEOs while searching for a permanent replacement.
Texas Instruments
Texas Instruments (TI) is well-known across the world for its high-computing calculators. It is also a major manufacturer and seller of semiconductors, especially analog chips.
Though these chips aren’t as powerful as GPUs, they’re less expensive to produce. Not only that, but the automotive and industrial sector depend heavily on analog chips, which together make up around 62% of TI’s revenue.
TI is also an integrated device manufacturer (IDM), which means it makes most of its chips in-house. This has helped insulate TI from the global chip shortage, as it doesn’t depend on a third-party for chip production.
That said, with the company’s performance tied to the automotive and industrial sectors, it can be fairly cyclical. For instance, during the pandemic, TI struggled to grow, as low demand for cars and consumer electronics left it selling fewer chips.
Over the past couple of years, Texas Instruments (TI) has faced a challenging financial landscape. In 2023, the company reported an annual revenue of $17.519 billion, marking a 12.53% decline from the $20.028 billion reported in 2022. In the fourth quarter of 2024, TI’s revenue decreased by 2% year-over-year to $4.01 billion, with net income falling 12% to $1.21 billion.
Despite these declines, the company anticipates a return to growth in the first quarter of 2025, projecting revenues between $3.74 billion and $4.06 billion, which would surpass the $3.66 billion from the same quarter the previous year.
POET Technologies
POET Technologies is a growth company based in Toronto. It designs and develops a special kind of semiconductor that integrates electronics and photonics into a wafer-level device.
According to the company, this integrated chip will cut assembly and component costs for its clients. It will also provide them with a flexible platform that could have far-reaching applications from data centre solutions to consumer product development.
So far, the company has done surprisingly well. It has cash on hand and has managed to keep its operating costs low. As the Canadian government has recently allocated money for the development of the semiconductor sector, POET is certainly a growth stock to keep your eye on.
Are semiconductor stocks right for you?
The semiconductor sector presents an enticing investment prospect in 2025, buoyed by technological advancements in fields such as artificial intelligence, autonomous vehicles, cloud computing, and green energy solutions. This upsurge in demand, highlighted by AI-driven companies like Nvidia, accentuates the pivotal role of semiconductors in future technological progress.
However, potential investors should recognize the sector’s complexity, from the procurement of materials like silicon to the capital-heavy chip fabrication process. Additionally, the semiconductor industry is characterized by its cyclical nature, influenced by consumer demand and broader economic trends. For example, a dip in tech product sales during the 2022-2023 economic slump resulted in an oversupply, impacting giants such as Intel and AMD, though the market saw a resurgence in 2024 attributed to demands in data centers, AI, and automotive technologies.
Despite these fluctuations, the long-term outlook for semiconductor stocks is promising, especially with global efforts like the U.S. CHIPS Act promoting domestic manufacturing and major firms investing in advanced 2nm and 3nm chip technologies.
For forward-looking investors, semiconductor stocks present a lucrative growth avenue, especially for those planning to maintain their portfolios over the next decade, given the industry’s trajectory towards continuous technological innovation.