The ongoing shortage of semiconductors has exacerbated the pandemic-driven share price boom of manufacturers of the crucial technology, sparking concern the price rises are unsustainable and investors could be caught out by their outsized exposure to the sector.
The world's third-largest chip manufacturer Flex warned last week it expects the global shortage to continue until at least mid-2022, as the rebound in car sales and boom in tech demand continues to overwhelm supply. Renewed tensions between China and the US have also weighed on supply. The PHLX Semiconductor Sector (SOX) index, which is a market cap-weighted index composed of the 30 largest companies primarily involved in the design, distribution, manufacture and sale of semiconductors, has risen 143.5% from 18 March 2020 to 9 June 2021. This compares to a rise of around 80% in the fi...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes