As noted earlier, tech investors have expressed concern that trade wars with China would lead that nation to boost its own chip-making abilities. Such fears may be overblown.
A recent study by PricewaterhouseCoopers LLP found that U.S semiconductor companies spent $329 billion on R&D in the year ended June 30, compared to $61 billion spent in China. The chip industry is especially dependent on fresh R&D spending, as the newest chips often represent major leaps over prior generations.
The notoriously cyclical chip sector had a gloomy October, but the long-range picture looks brighter. Investors who take a long-term might view the industry’s recent downdraft as a potential buying opportunity.