How to Invest in ASX Semiconductor Stocks: A Complete Guide

Semiconductor stocks are shares in companies that design, manufacture or sell semiconductor chips, the tiny electronic components powering devices like smartphones, cars, computers and medical tools. These companies may be purely chip designers (fabless), both designers and makers (IDMs), or specialised contract manufacturers (foundries).

Within the sector, subsectors include memory chips (like DRAM and NAND), logic and microprocessor chips (used in CPUs and GPUs), analog and mixed signal chips (for sensors and power management), and power or compound semiconductors made from materials such as silicon carbide or gallium nitride. Each subsector serves different uses: memory for storage, logic for computing, analog for signal control, and power for industrial or automotive applications. This entire sector is a foundational pillar of the broader technology market.

What makes investment in the Semiconductor Stocks attractive?

Semiconductor stocks combine strong secular tailwinds from AI/data centre ramps, consistent double-digit revenue growth, innovation leadership, favourable government support and pockets of value in recovering segments. While markets remain volatile and subject to geopolitics or trade‐policy risk, the long term structural growth outlook remains compelling.

Investing in semiconductor stocks can be appealing because of several well-defined trends and practical fundamentals giving these companies momentum now and into the future.

1. Growth in Global Demand for AI & Data Centres

The rise of artificial intelligence (AI) is a powerful driver. Companies like Nvidia, AMD, Broadcom, ASML, Marvell, and Micron are experiencing surging demand for chips that underpin AI models and data centre infrastructure. AI-related sales surged sharply in 2024 and are expected to climb further as enterprises and hyperscales invest heavily. Analysts see generative AI chips generating over $150 billion in sales in 2025 alone, up from $125 billion in 2024. Major banks emphasise these AI tailwinds as key investment opportunities.

2. Long-term Market Expansion

Global semiconductor revenues are on track to surge from about $627 billion in 2024 to over $700 billion in 2025, growing at double-digit rates. They will then reach over $1 trillion by 2030 and possibly double again by 2040. That translates to industry revenue growth of more than twice the global GDP, an attractive outlook for investors.

3. Technology Leadership & Innovation

Leading-edge chipmakers and equipment suppliers enable advances in high-performance computing, memory, and power design. ASML, for instance, holds a virtual monopoly on EUV lithography machines critical for next generation chip nodes, with revenues sharply rising. Micron and SK Hynix dominate memory markets like DRAM and NAND, while Nvidia and AMD push forward with specialized AI chips like HBM4, MI300 and beyond.

4. Government Support & Policy Incentives

Governments worldwide have enacted large stimulus packages to support local semiconductor manufacturing. In the U.S., the CHIPS and Science Act allocates over $50 billion in subsidies and tax credits to build domestic chip production and research infrastructure. Europe’s Chips Act and South Korea’s KCHIPS Act also foster local industry and help reduce supply chain risks while driving global capacity expansion. This is also relevant to the semiconductor industry in Australia, as global supply chain diversification becomes a priority.

5. Recovery from Past Cyclicality & Undervalued Stocks

After cyclical downturns and oversupply issues, many semiconductor stocks started 2025 with bounce backs. Analysts note that some non-AI-centric firms may still trade at reasonable valuations, offering potential value for long-term investors. While companies like Texas Instruments face tariff related pressures and mixed near-term demand forecasts, others remain optimistic on prospects tied to infrastructure buildouts and AI acceleration.

Why This Could Matter for the Future

The semiconductor industry is the backbone of virtually every modern technology, from autonomous vehicles and industrial automation to AI, 5G, IoT, and edge computing. As more systems embed processing power at the edge or in devices, demand for specialised chips (power, analog, sensor, custom AI accelerators) continues to rise. That gives opportunities to a broad base of companies, not just the largest players.

Semiconductor Companies in Australia (Listed on the ASX)

Although the ASX doesn’t host big global semiconductor chipmakers, interesting listings still focus on emerging technologies. Here is a list of semiconductor companies in Australia that are driving innovation in this space:

• BrainChip Holdings (ASX: BRN) is developing neuromorphic processors and spiking neural network hardware, including the Akida AI chip and the MetaTF development environment. Based in Australia, BrainChip targets edge AI applications in security, industrial IoT, and surveillance. Its positioning at the AI hardware frontier differentiates it from other small-cap players.

   

   

• Weebit Nano (ASX: WBT) specialises in ReRAM nonvolatile memory IP. Their resistive random-access memory is aimed at low power embedded applications like wearables, robotics, IoT, and 5G devices. If commercial adoption accelerates, this next generation memory tech could deliver unique value.

   

   

• Archer Materials Limited (ASX: AXE) is a Deep Tech company working on two main semiconductor technologies: the 12CQ carbon-based qubit processor for quantum computing, and a graphene based labonachip biosensor for medical diagnostics. Archer targets breakthroughs in room-temperature quantum chips and ultrasensitive disease detection tools using graphene field effect transistors.

   

   

  

   

Sector Comparison & Potential Opportunities

Semiconductor-related ASX stocks are tied to global AI, edge computing, quantum, and memory innovation. BrainChip and Weebit Nano occupy niches in emerging AI and memory tech that could benefit if demand for low power, brain-inspired chips or advanced memory grows. BrainChip (neuromorphic AI hardware) and Weebit Nano (next-gen memory) offer speculative but high-upside plays tied to emerging global trends for investors bullish on AI and semiconductor innovation.

Archer Materials is the only ASX company actively aiming to commercialise quantum processing chips and graphene biosensors. Its dual-track development includes a potentially disruptive 12CQ qubit platform with room-temperature operation, plus a biosensor chip aimed at rapid disease monitoring. While commercialisation may take years, Archer has made steady progress through wafer fabrication milestones, foundry collaboration, fabrication scaling and pESR chip demonstration. Its technology has earned attention from research partners and global alliances.

How to Evaluate Semiconductor Stocks on the ASX

Key Factors to Evaluate Semiconductor Stocks include:

1. Business Model & Subsector

Semiconductor companies vary by business model: fabless chip designers, equipment suppliers, memory makers, integrated device manufacturers (IDMs), or assembly and testing firms. Each has different risks and growth profiles. For example, IDMs combine design and manufacturing, while fabless designers outsource production and depend on foundries.

2. Market Demand & Growth Drivers

Look for exposure to areas with strong demand, such as AI chips, data centres, cloud infrastructure, high-bandwidth memory, and edge computing. Firms tied to AI and high-performance computing often show durable growth momentum.

3. Financial Strength & Valuation

Consider fundamentals: revenue and earnings growth rates, profit margins, and valuation multiples such as price-to-earnings (P/E) or price-to-book. High growth (e.g. > 25 % revenue and EPS growth) is a positive sign, though stocks with sky-high P/E require scrutiny. Balance growth and valuation carefully.

4. Cyclicality & Macro Risks

Semiconductors are inherently cyclical. Supply-demand imbalances, trade tensions (especially between the U.S. and China), tariffs, and currency swings (e.g., the strength of the U.S. dollar) impact performance. Strong firms may outperform even in downturns if they dominate their niche or have diversified revenue.

Expert Note: At Proactive Equities, our analysts use this exact framework to evaluate semiconductor stocks. We assess whether a company's competitive "moat" (like ASML's EUV monopoly or Weebit's ReRAM IP) is strong enough to justify its valuation and navigate the sector's inherent cyclical risks. This rigorous analysis is crucial before making any investment recommendation.

5. Company Size & Liquidity

Blue-chip names like Nvidia, Broadcom, ASML, and TSM are large, liquid, and well covered, but there can also be a significant opportunity in mid- or small-cap stocks. Emerging firms often trade at higher volatility but can offer earlier upside if fundamentals are solid.

6. Competitive Edge & Innovation Pipeline

Focus on firms with unique IP or disruptive tech, such as advanced lithography tools (ASML), neuromorphic processors, new memory architectures, or custom AI accelerators. Those with technical moats typically sustain long-term value.

7. Geographic Exposure & Supply Chain

Check global exposure. Some companies rely heavily on China or Taiwan in their supply chain or revenue. That may involve geopolitical and regulatory risk. Others may benefit from diversification or government subsidy programs in their regions.

What are the Risks of Investing in Semiconductor Stocks?

Here are key risks to keep in mind when investing in semiconductor or technology companies:

1. Cyclical Industry Fluctuations

Semiconductors are highly cyclical. Intense demand phases, such as during AI led surges, can quickly transition to oversupply and plunging prices if demand slips or gigafabs ramp up capacity too quickly. That volatility can significantly affect revenue and margins. For example, TSMC has lowered growth forecasts amid slowing consumer electronics demand.

2. Geopolitical and Trade Disruptions

Global trade tensions, export controls, and tariffs, especially between the U.S., China, and Europe, pose serious threats. Restrictions on chips or manufacturing equipment can raise costs, delay production and hurt sales. Cyber-espionage and restricted access to key components (like neon or gallium) also loom as geopolitical risks.

3. Supply-Chain Vulnerabilities and Natural Disasters

The semiconductor supply chain is long, global, and fragile. From port delays and logistical blockages to regional crises like droughts, earthquakes, or fires, disruptions can halt production and inflate costs. Taiwan’s 2021 drought and multiple fires at wafer fabs highlighted how a local event can ripple through the global chip supply chain.

4. Product Complexity and Operational Risk

Advanced chips that become more complex raise the possibility of defects, delays, or manufacturing failures. As functionality grows, testing and error margins tighten. Precision fabrication also introduces operational challenges in people, processes, and quality control, where a single glitch can jeopardise delivery or reputation.

5. Technological Obsolescence and Competition

Technology evolves rapidly, and companies lacking innovation risk being overtaken. Intel recently signalled that it may halt the development of the 14A node, raising fears of losing leadership in next-gen chipmaking, and investor confidence suffered accordingly. Moreover, tech giants like Meta, Google, and Amazon are now developing their own AI chips, intensifying the competition faced by traditional chip firms.

While long-term momentum, from AI, edge computing, and cloud infrastructure, remains strong, semiconductor investments come with substantial risks. Volatile cycles, global geopolitical tensions, supply-chain fragility, operational complexity, and fast-changing technology landscapes can all threaten potential returns. When navigating this dynamic and high-stakes sector, careful company selection, diversification, and risk awareness are essential.

Analysis: 3 of the Best ASX Semiconductor Stocks for FY26

Weebit Nano Limited (ASX: WBT)

Weebit Nano is an ASX-listed semiconductor IP company founded in 2015. It develops Resistive RandomAccess Memory (ReRAM) technology, a nonvolatile memory (NVM) form that retains data when power is removed. Their IP supports embedded memory for systems-on-chip (SoCs). It is being extended toward discrete memory products for applications such as IoT devices, wearables, robotics, autonomous vehicles, 5G, and AI hardware. Weebit's technology is fab-friendly, integrating easily into existing CMOS and FDSOI manufacturing flows. It was most recently licensed by On Semi for its Treo platform in January 2025 and previously qualified with DB HiTek and Sky Water foundries for embedded ReRAM deployment. Weebit sits at the intersection of expanding demand for low-power, persistent memory and unique, early-stage IP deployment. As more foundries and chipmakers license its ReRAM, revenue has begun flowing. Weebit offers scalable licensing revenue potential, exposure to multiple high growth markets, and a levered growth model, with a modest market cap offering upside if execution continues.

BrainChip Holdings Ltd. (ASX: BRN)

BrainChip is an Australian company (founded in 2004, ASX listed since 2011) specialising in neuromorphic AI hardware and software. Its flagship product is the Akida neuromorphic processor (e.g. AKD1000), which uses spiking neural networks (SNNs) to deliver ultraefficient, low power AI processing at the edge for vision, audio, radar, autonomous systems, and IoT. They also offer MetaTF, a tool to train and deploy those neural models, development kits, and PCIe accelerator boards. BrainChip has built partnerships through Intel Foundry Services, Arm AI and collaborations with Edge Impulse, MegaChips, Prophesee, and others, reflecting growing adoption across industrial, defence, healthcare, and sensor markets. Its recent AGM emphasised roadmap delivery, commercial engagement and expanded partnership. If edge AI continues to grow, BrainChip's bio-inspired architecture will provide advantages in power and efficiency. It is already shipping kits and IP, is gaining industry traction, and trades at a small Cap valuation (~A$446M) that could rise with licensing and embedded adoption.

Archer Materials Limited (ASX: AXE)

Archer Materials is an ASX-listed DeepTech semiconductor company working on advanced devices for quantum computing and medical diagnostics, including graphene biosensor chips and quantum compatible semiconductor platforms. Recent ASX updates (July 2025) include successful testing of its biochip integrated with readout circuitry, demonstration of TMR sensor functionality at cryogenic temperatures, and advancement in quantum device R&D, all reflective of technological progress, though still at an R&D and prototype stage within a market cap of A$76M. Over the past three years, its revenue has grown at 50% per annum compound, signalling consistent R&D momentum despite a lack of profitability; its share price is subject to significant volatility. Archer is a speculative long-term bet on breakthrough technology in next generation bio-diagnostics and quantum materials. It offers early-stage exposure to frontier semiconductor innovation, with substantial R&D progress visible, but with high risk and execution dependency.

FAQs on Investing in Semiconductor Stocks

Which stocks are referred to as Semiconductor Stocks?

These are shares in companies involved in designing, manufacturing, distributing, or selling semiconductor chips, such as fabless designers (e.g. Nvidia), integrated device manufacturers (e.g. Intel, Micron), memory makers, equipment suppliers, and foundries.

What makes investment in the Semiconductor Stocks attractive?

Strong growth drivers like AI/data center demand, consistent industry expansion, innovation leadership, and government support make the sector appealing for long term momentum.

What are some of the high risk factors associated with investing in Semiconductor Stocks?

Risks include industry cyclicality, geopolitical tensions and tariffs, fragile global supply chains, rapid obsolescence and heavy capital needs, and operational complexity in manufacturing advanced nodes.

Which are the best Semiconductor Stocks to buy now?

While Weebit Nano, BrainChip, and Archer Materials show strong potential, entry timing is critical due to tech sector volatility. Buying during market pullbacks or after key announcements may offer the best risk-reward balance.