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5 things to know about the future of semiconductors
Shailesh Jaitly
Investment Analyst
December 1, 2022

How fast things can change: there was a major shortage of semiconductors at the start of the pandemic, and now the industry is grappling with too much inventory in parts of the supply chain. This has led to a sell-off in semiconductor stocks and prompted questions about the depth and duration of this downturn. 


The US has also stepped up restrictions on shipments of semiconductors and related equipment to China. Meanwhile, the US and the European Union have laid out plans to reshore semiconductor manufacturing in the interest of national security, which is expected to have longer-term implications for industry efficiency and chip prices.


Investment analyst Shailesh Jaitly recently visited Taiwan, Japan and South Korea, where he met with company management teams and some key industry contacts. In this piece he covers his current ideas about the state of the semiconductor business.


Chip stocks crumbled on inventory geopolitical concerns

five things to know

Data as at 31 October 2022. The PHLX Semiconductor Sector is a Philadelphia Stock Exchange capitalization-weighted index composed of the 30 largest US companies primarily involved in the design, distribution, manufacture and sale of semiconductors. Sources: Capital Group, Refinitiv Datastream

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Risk factors you should consider before investing:

  • This material is not intended to provide investment advice or be considered a personal recommendation.
  • The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
  • Past results are not a guide to future results.
  • If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
  • Depending on the strategy, risks may be associated with investing in fixed income, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.

Shailesh Jaitly is an equity investment analyst at Capital Group with research responsibility for semiconductor equipment globally, Asian technology excluding internet and IT services and as an Indian generalist, including utilities. He has 29 years of investment experience and has been with Capital Group for 11 years. He holds an MBA from National University of Singapore and a bachelor’s degree in electronics and communication engineering from the College of Engineering, Andhra University, India. He also holds the Chartered Financial Analyst® designation. Shailesh is based in San Francisco.

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