2 Semiconductor Stocks to Buy Amid the Automotive Chip Shortage, and 1 to Watch

The empty lots at new car dealerships have attracted the attention of most Americans regardless of whether they pay attention to the semiconductor industry. Thanks to a shortage of semiconductor chips, automobile factories are being temporarily idled, and used car prices have shot higher amid the rising demand for cars.

However, the shortage of such chips has placed the focus on some semiconductor companies that previously received little attention, such as NXP Semiconductors (NASDAQ:NXPI), Texas Instruments (NASDAQ:TXN), and GlobalFoundries (NASDAQ:GFS). Let’s take a closer look at these three companies.

A close-up of a semiconductor designed for automotive applications.

Image source: Getty Images.

Understanding the automotive chip shortage

The semiconductor shortage has affected all tech-related industries. Nonetheless, the nature of the chip shortage differs in the automotive industry.

Consumers who have experienced a decades-long upgrade cycle often pay little heed to less advanced chips. However, a robust market for larger, slower chips remains, and the automobile sector

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The Semiconductor Shortage Is An Opportunity To Create A Win-Win Situation For Mexico And US

According to the Banco de México, Mexico’s central bank, stoppages in the nation’s automotive industry as a result of the global semiconductor chip shortage could cost Mexico up to 1% of the expected growth of the Gross Domestic Product (GDP) by the end of 2021.

The semiconductor shortage is hitting many industrial sectors hard, but the automotive industry has been hit much harder than others. This is because semiconductors are an indispensable component for auto manufacturers since they need them for a wide variety of in-vehicle systems such as security, navigation and entertainment. A combination of events such as the suspension of operations in factories and ports in Asia due to the pandemic and the increase in demand from the technology industry (especially cell phone companies, computers, and video game consoles) all led to a surplus of demand for this one component. This in turn has resulted in shortages in

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Stellantis and Foxconn partnering on automotive semiconductor business

Stellantis and Foxconn will co-develop a new line of automotive semiconductor chips partly aimed at improving future supplies of the critical component, the companies announced Tuesday.

Stellantis is teaming up with Foxconn on new semiconductor chips. (REUTERS/Pascal Rossignol)

“With Foxconn, we aim to create four new families of chips that will cover over 80% of our semiconductor needs, helping to significantly modernize our components, reduce complexity, and simplify the supply chain. This will also boost our ability to innovate faster and build products and services at a rapid pace,” Stellantis CEO Carlos Tavares said.

The chips will be made available to third-party customers and will enter production by 2024. Details on planned investments and manufacturing locations were not immediately released.


Stellantis is developing the chips to help it integrate new software platforms for its

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Car sales, used car prices impacted by semiconductor chip shortage

The economy continues to rebound from the COVID-19 pandemic, but with the ongoing semiconductor chip shortage, many are traveling far and wide just to get the car they desire. It doesn’t matter whether a vehicle is new or used, dealerships are running on empty. 

Nearly 10% of vehicle shoppers traveled out of state to purchase the ride they wanted, according to a new survey by, an online automotive marketplace. Of the 12,000 respondents, 56% bought a new vehicle, while 43% bought a used vehicle.

A shortage of computer chips has caused a number of automotive factories to shut down temporarily in recent months, as they can’t finish building new vehicles without adequate parts. 

► Car rental delivery?: Uber Rent looks to shake up the rental car industry.

► Average age of vehicles at all-time high: Cars, trucks, SUVs getting older as used car prices soar

Those issues have contributed

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