With the ongoing shortage, it’s been “chips this” and “semiconductors that.” Believe me, I understand if you’re burnt out, but we’re here to make money on this $430 billion industry.
Today, I’m going to tell you about a tech firm that’s virtually an ETF because of its wide-ranging services. And unlike the chip manufacturers we’ve discussed before, they’re fab-less, or factory-less. In other words, they operate on the highly lucrative theoretical side of the chip industry and save millions on overhead.
Think of electronics as like a great rock band. All the players have to play the right parts at the right time and this is what the company does. Keeping with this metaphor, SITM is basically Jerry Garcia. No flash. Just pure rock and roll.
Based on their own humbly conservative estimate, SiTime (nasdaq: SITM) has a total market worth of $8 billion. Their chips can be found in everything from smartphones to missiles. Their rather arcane solutions like network synchronizers, oscillators and clock generators have applications in platforms like Internet of Things, 5G, automated driving, high-end missiles and industrial applications. I’m talking about 250 distinct applications and they’re looking to expand that number to 500 and even 1,000.
Most recently, SITM saw a stunning 429% quarterly EPS growth and are projecting profit gains of 400% on the back of a 100% increase in sales. Again, that’s coming from the highly prudent analysts at SiTime.
P.S.: I’m extremely enthusiastic about SiTime because of how closely it works with industries with remarkable potential for disruption like 5G wireless and automated driving. These are sectors that can grow exponentially by taking something that’s already popular and creating a better way to do it. Think of how Netflix created an entire new avenue for media consumption that left giants like Blockbuster in the dust while they’re collecting Oscars. That’s why I wanted to let you know that there’s a company doing for household game night what Netflix did for film, and you can get the full story right here.
Cheers and good investing,
Michael A. Robinson