The global semiconductor industry sales increased 24% from the prior year in November 2021, driven by the heightened demand from various industries and favorable government policies, and huge corporate funds addressing the growing chip shortage. Amid the accelerating deployment of 5G technology worldwide, companies are making impressive breakthroughs in the chip-making process that increases bandwidth, provides lower latency, and delivers efficient performance using low power. This, combined with the possibility of the passage of the CHIPS Act in the near term, guarantees the industry’s bright long-term growth prospects.
Growing investor optimism in this space is evident in the First Trust Nasdaq Semiconductor ETF (FTXL) 2.1% gains over the past month, which surpassed the SPDR S&P 500 Trust ETF’s (SPY) 2% returns. The global semiconductor chips market is expected to grow at 7.8% CAGR and reach $553.60 billion by 2026. So, both Micron Technology, Inc. (MU – Get Rating) and Marvell Technology, Inc. (MRVL – Get Rating), two prominent players in the semiconductor chip industry, are expected to benefit substantially in 2022.
MU designs, manufactures, and sells memory and storage products worldwide. It sells DRAMs, SRAMs, flash memory, semiconductor components, and memory modules to various end markets. In comparison, 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.
In the last three months, MU experienced 36.8% gains and MRVL gained 34.2%. But which of these stocks is a better pick now? Let us find out.
On December 1, MU expanded its business relationship with United Microelectronics Corporation (UMC), which helps MU to secure supplies for automotive, mobile, and critical customers into the future and increase collaboration across the semiconductor industry. This expansion will also help MU deliver its industry-leading memory and storage solutions to its customers globally.
On December 7, 2021, MRVL announced its collaboration with OE Solutions, a leading supplier of optoelectronic transceiver solutions for broadband wireless and wireline markets, to deliver the industry’s first production-ready 100G QSFP-DD optical modules optimized for 5G backhaul and Metro Access applications. The OE Solutions 100G QSFP-DD Coherent Transceiver with the Marvell Deneb Coherent DSP will enable the transition of 10G to 100G coherent solutions, delivering unprecedented performance and scalability. The companies are looking forward to gaining widespread recognition and benefit from the accelerating deployment of 5G infrastructure worldwide.
Recent Financial Results
MU’s non-GAAP revenue for its fiscal 2022 first quarter, ended December 1, 2021, increased 33.2% year-over-year to $7.69 billion. The company’s non-GAAP gross profit came in at $3.62 billion, representing a 102.7% rise from the prior-year period. Its non-GAAP operating income came in at $2.73 billion, up 180.1% from its year-ago period. While its non-GAAP net income increased 175.5% year-over-year to $2.47 billion, its non-GAAP EPS increased 176.9% to $2.16. As of December 1, 2021, the company had $8.68 billion in cash and cash equivalents.
For its fiscal 2022 third quarter, ended October 30, 2021, MRVL’s net revenues increased 61.5% year-over-year to $1.21 billion. The company’s non-GAAP gross profit came in at $788.35 million, up 66.7% from the prior-year period. Its non-GAAP operating income came in at
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