7 Best Canadian Semiconductor Stocks For June 2024 – Wealth Awesome
Wealth Awesome
The largest tech companies in the U.S make up a huge portion of the entire NASDAQ composite index.
The TSX doesn’t lean as heavily on tech, and the whole tech sector makes up a bit more than one-tenth of the Canadian market. And that’s mostly thanks to Shopify emerging as a heavyweight.
Still, the Canadian markets do have a fair selection of tech companies, and a fair number of them fall under the semiconductor category.
It’s an avenue worth exploring as it behaves differently compared to software-oriented tech stocks. And with a breakthrough, many of the best Canadian semiconductor stocks could turn out to be great investments.
Thanks to their electrical properties, semiconductor materials act somewhere between a conductor and an insulator. They offer more control over the flow of electricity, thus making them ideal for control-related circuitry.
Their contribution to the world is quite profound. If it weren’t for semiconductors, we wouldn’t have computers and smartphones, at least not in the same compact state as we have today.
The semiconductor stocks can include companies from three sectors: Metal and mining, chemical, and tech. That is if we cover the entire lifecycle of semiconductor materials from extraction to final products.
However, the general consensus is that semiconductor stocks represent companies that create microchips and integrated circuits (ICs).
There are several companies that fall neatly under the definition of semiconductor stocks currently trading in Canada.
Most of them are micro and nano-cap and trade-in venture capital rather than the main market.
Unless otherwise specified, all the stocks below are listed in the venture capital market.
POET Technologies has a very specific semiconductor business: Combining electronic functionality and photonics in a single microchip.
That allows these chips to partly communicate using light, which doesn’t get affected by temperature, something a typical semiconductor-based IC is susceptible to.
The company has design, wafer-scale fabrication, and assembly capabilities, making it one of the few Canadian semiconductor companies that actually make microchips, though they are made overseas.
The company made great strides regarding its product development in 2021, and it’s still a few years away from true market penetration.
The semiconductor technology that POET offers may find great and currently untapped applications.
Metal material stock is a bit of a cheat on this list, as it doesn’t focus as much on semiconductors as it does on something called Metamaterials, which literally means “beyond materials.”
The premise is that the company creates materials that offer properties that grow beyond what natural materials can offer. It also focuses on nanotech.
And while neither are technically semiconductors, the company has more in common with semiconductor tech companies than most others.
The company is quite old, but the stock is relatively young. It only joined the market in 2020.
5N Plus offers a variety of material solutions, including metals, chemicals, and semiconductors.
In the semiconductor category/product line, the company has three semiconductor compounds and two different types of wafers in its semiconductor portfolio “portfolio.”
So it’s not a pure semiconductor company but has a significant overlap with the sub-industry.
Thanks to its diversified product/solution focus, the company caters to a wide variety of industries, including pharmaceutical and R&D.
Spectra7 is all about making electronics even smaller and more efficient than they are by replacing the bulk and weight of traditional circuits/chips with its analog chip technology.
The company offers a variety of semiconductor/electronic material-related solutions, many of them highly relevant now and will likely get even more spotlight in the future.
The solutions include Augment Reality and virtual reality hardware and its trademarked 5K resolution headsets.
NexOptic has two products: One overlaps with semiconductors from the software side while the other on the hardware side.
Its Aliis solution is a pack/system of artificial intelligence (AIs) that can be integrated into microchips directly for real-world data processing and enhancement.
The company already partners with Nvidia and ARM (microprocessors and controllers). The other product uses a powerful processor and NexOptic’s proprietary technology for long-range optics.
Imagine reading something on a piece of paper, and the words suddenly change, and you read something else.
It’s not at all unusual on a screen, but on an article or something that looks like paper, it can be quite incredible. There is something called e-paper which, using very little electricity, tiny ink pellets, and electrodes, can display specific messages on paper-like circuits.
The e-papers are significantly cheaper, though less versatile than screens, and might offer a wide variety of ingenious uses.
Even in this list of relatively unique companies, this nano-cap company stands out from the crowd.
The Quantum eMotion creates QNG2, a patented technology the size of a small IC that can be installed in most electronic devices like cell phones and computers.
It’s basically a quantum random number generator, which can be used for the next generation encryption, which even quantum devices/computers will not be able to break.
Note that it’s one of many similar devices available in the world, but it’s one of the smallest and the most power-efficient devices of its kind.
It’s important to note that the TMX screener, which can be considered the purest of all screeners since it’s offered by the same company that is responsible for running the TSX, lists a few other nano-caps as semiconductor stocks as well: Enerdynamic Hybrid Technologies, UGE International, and Solar Alliance Energy, among others.
They are all solar panel companies. But I didn’t add them to the list above because the companies don’t create solar panels/solar cells, which would make them semiconductor companies indeed. They just design and deploy solar energy solutions.
There are three companies: Poet Technologies, Spectra7 Microsystems, and Ynvisible Interactive that technically create microchips, but not all three pick up the manufacturing process from scratch.
Yes. They can often run contrary to the broader tech market and the stock market as a whole.
The contrarian nature can help you beat the market. But they are a good investment because of the rising demand for semiconductors and consumer electronics.
Over a billion smartphones are sold every year, and it’s a number that’s only going to rise over time.
And with IoT, the demand for ICs, microchips, and other semiconductor-based products is expected to spike, making semiconductor stocks a relatively smart investment.
The cheapest way to buy stocks is from discount brokers. My top choices in Canada are:
To learn more, check out my full breakdown of the best trading platforms in Canada here.
Despite being volatile, relatively risky, and micro and nano-cap, Canadian semiconductor stocks offer much more powerful growth potential than their mature US counterparts.
Many of them rely upon technological breakthroughs, and if those breakthroughs occur, the stocks can soar to unprecedented heights. So even if you are not keen on buying them now, tracking them will likely be a smart idea.
While semiconductor-based electronics don’t require too much power, it would still be a good idea for you to invest in green utilities.
Thanks for featuring POET Technologies, it is a truly innovative company, somewhat overlooked purely due to the complexity of what it’s doing.
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