The ongoing chip shortage creates a medium-term investment opportunity. Investors should expect the limited supply to drive semiconductor prices higher for a while. There are a few companies to consider.

Micron (NASDAQ:MU), which supplies DRAM and NAND, will benefit from higher prices and lower supplies. It may expand its production capacity to maximize profits. This will not hurt margins, since the market supply is constrained.

Taiwan Semiconductor (NYSE:TSM) is a compelling buy because of its supply deal with Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD). TSM is also selling bonds to pay for the building of its planned U.S. chip facility in Arizona. The chip shortage would validate the new plant.

Qualcomm (NASDAQ:QCOM) will continue to post strong chip sales as the 5G smartphone rolls out. The stock dipped in recent weeks, creating an entry point for investors.

CPU chip giant Intel is a better buy than AMD. Intel recently launched a chip refresh, called Rocket Lake. The 11th-generation chip keeps its price and performance parameters on par with that of AMD. AMD’s Ryzen chips are better than Intel but are in limited supply. So, if consumers cannot get a Ryzen 5000-based chip, revenue growth is not as fast as AMD’s valuations imply.