Image Source: Pixabay

What is the Semiconductor Value Chain?
 

 The AI hardware sector consists of 7 distinct sub-segments of which 4 are directly involved in the semiconductor value chain that refers to the 4 stages involved in the production and distribution of semiconductor devices involving multiple companies, each with their own specialized roles.

The 4 stages in the creation of semiconductor wafers (chips) are:

1. software design (read Update: Custom Design Software (EDA) Stocks Portfolio Up 7.6% In June - Here's Why).
   • Focus: involved exclusively (i.e. pure-play) in the custom design of complex semiconductor chips using sophisticated electronic design automation (EDA) software.
2. production equipment/material supplies (read Update: MunAIMarkets Model Pure-Play Semiconductor Suppliers Portfolio Up 15.8% In June; Now Up 23.6% YTD);
   • Focus: provide essential equipment for manufacturing chips such as lithography machines, and production materials such as chemicals and gases.
3. production - called foundries in industry jargon (Update; Pure-Play Semiconductor Foundries Portfolio Continued To Soar In June);
   • Focus: concentrate all their efforts in the manufacturing (fabrication (or fab) in industry jargon) of chips based on the designs provided by other semiconductor companies.
4. preparation for shipping (The Pure-Play Outsourced Semiconductor Assembly and Test (OSAT) Model Portfolio: DOWN 7.7% in May; DOWN 23.4% YTD); 
   • Focus: assemble chips into finished semiconductor components, tests for defects and do the very specialized packaging of the chips for shipping.

What Is A Semiconductor?
 

A semiconductor (aka computer chip or wafer) is a material that has an electrical conductivity value falling between that of a conductor, such as copper, and an insulator, such as glass. In many cases their conducting properties are altered by introducing impurities (doping) into the crystal structure and when two differently doped regions exist in the same crystal, a semiconductor junction is created. Connecting the two materials causes creation of a depletion region near the boundary, as the free electrons fill the available holes, which, in turn, allows electric current to pass through the junction only in one direction. and is the basis of diodes, transistors, and most modern electronics. 

The Pure-Play Outsourced Semiconductor Assembly and Test Model Portfolio: DOWN UP 15.8% in June; DOWN 11.2% YTD 
 

There are only 2 pure-play outsourced semiconductor assembly and test companies (OSAT) trading on U.S. stock exchanges. ASE Technology and Amkor Technology but they differ in scale, geographic roots, and strategic focus. Here's a breakdown to help you compare:

• ASE Technology:
  • Headquartered in Kaohsiung, Taiwan,
  • Market capitalization of $21.9B -  world’s largest OSAT provider,
  • Specializes in wire bonding, flip-chip, wafer-chip and SIP packaging
• Amkor Technology:
  • Headquartered in Tempe, Arizona, USA,
  • Market capitalization of $5.2B,
  • Specializes in flip-chip, wafer-chip and SIP packaging

The two companies are outlined below as to their stock performances month-ending June 27th, in descending order, and YTD, and the reasons for their stock price changes, as follows:

1. Amkor Technology Inc. (AMKR): UP 17.4% in May; DOWN 17.7% YTD
   • ​​​​​​​​​​​​​​Reasons for price change:
     • ​​​​​​​Q1 Earnings Surprise: Beat revenue expectations in Q1 2025.
     • Technical Breakout: The stock broke through key resistance levels in mid-June, triggering momentum buying and drawing in technical traders.
2. ASE Technology Holding Co. (ASX): UP 12.9% in June; UP 5.2% YTD
   • ​​​​​​​Reasons for price change:
     • ​​​​​​​New Tech Rollout: Introduced FOCoS-Bridge with TSV, a next-gen packaging solution that reduces power loss 3-fold that reinforced ASE’s position as a technology leader in the OSAT space.
     • Strategic Partnership Expansion: Expanded its partnership with Ainos to deploy AI-powered scent detection systems across its facilities, showcasing its commitment to smart manufacturing and sustainability.
     • Technical Momentum: The stock broke through key resistance levels in mid-June, triggering technical buying and momentum-driven trades.

Summary
 

The Portfolio is UP 15.8% in June but is still DOWN 11.2% YTD.

More By This Author:

Update: MunAIMarkets Model Pure-Play Semiconductor Suppliers Portfolio Up 15.8% In June; Now Up 23.6% YTD
Update: Custom Design Software (EDA) Stocks Portfolio Up 7.6% In June - Here's Why
Update: Performance Of Fabless Semiconductor Stocks "Fabulous" In June - Take A Look