Entegris Inc. - The Semiconductor Sweetheart

Entegris Inc (Nasdaq: ENTG) is a Massachusetts-based advanced material science company that specializes in manufacturing the components used in semiconductors. The semiconductor industry has been one of the best performing industries of late: the one-year return on the VanEck Vectors Semiconductor ETF (Nasdaq: SMH) is 88.23% and growing. For that reason, this industry is certainly not one to be overlooked. Semiconductors play a huge role in our technologically advancing world: they are used in every type of electronic device, from smartphones and tablets to cars and clean energy systems, and investors are beginning to realize this. Although Entegris is not a pure semiconductor manufacturer, it is well-positioned to take advantage of this booming secular growth.

macro photography of black circuit board
Image Source: Unsplash

Secular Growth

As mentioned in the introduction, the semiconductor industry is poised to act as the heartbeat of the ongoing technological revolution. Semiconductors are the key component of chips, used in virtually every electronic device, and for that reason, investors have been keen buyers of semiconductor stock of late. One example of this is the returns seen on one of the industry’s largest players: Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM), a company that has seen its stock jump over 120% over the last year. This suggests that investors have already recognized the opportunity of the semiconductor manufacturers themselves, and this is exactly why Entegris is perfectly positioned to build off of what has preceded them.

Supply Chain Diversification

Why is Entegris perfectly positioned…where even are they positioned? Semiconductor manufacturers are starting to become household names with their growing popularity and an increasing number of companies expanding into space. NVIDIA, Texas Instruments, Samsung, Intel, Taiwan Semiconductors, just to name a few, are all making strides in this area and have all seen great financial performance as a result. Entegris sits just behind these big names as the supplier of the materials for their semiconductors. Taiwan Semiconductors and Samsung are their largest clients, accounting for a combined 20% of their revenue. Another client of note is a newcomer to the field Intel Corp (Nasdaq: INTC), which makes up 6.77% of Entegris’s revenue.

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Disclosure: I own no stake in Entegris, Inc.

Disclaimer: This article is not an investment recommendation,  more

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