Entegris
ENTG
recently announced the expansion of its manufacturing capacity by building a new manufacturing facility in Colorado Springs.
Entegris’s new facility is expected to begin commercial operations in mid-2024 and will initially produce for Entegris’ Microcontamination Control and Advanced Materials Handling divisions, which develop critical products used to manufacture semiconductors.
The new manufacturing facility will be built upon 100,000 sq ft., and Entegris will spend $600 million to build the facility over the next several years.
Entegris’ recent strategic investment to build its new manufacturing facility in Colorado will likely reap positive results in the long run from the positive political environment in the United States. The positive environment will also support the manufacturing of semiconductor products in the country.
Entegris New Manufacturing Facility to Boost Prospects
The entire tech industry is reeling under various operational challenges due to a number of macroeconomic turmoils, like raging inflation, forex market volatility and looming recession.
This has been reflected in the share price movement of various tech stocks like Entegris and as investors hold bearish sentiments about the entire industry.
Entegris’ shares, which currently carry a Zacks Rank #4 (Sell), have lost 53.5% in the year-to-date (YTD) period compared with the Zacks
Electronics – Manufacturing Machinery
industry decline of 41.5%.
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the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
However, Entegris, which manufactures electronic materials for the semiconductor market, is facing increasing demand for its capex-driven solutions like fluid handling, FOUPS, gas filtration and purification products, which grew more than 50% in the last-reported quarter.
Another major factor positively impacting Entegris’ decision to expand manufacturing operations in the United States is President Biden’s decision to sign the CHIPS and Science Act, supporting investments in domestic semiconductor manufacturing and reducing dependence on foreign markets like China and Japan. Major semiconductor stocks like
onsemi
ON
and
Microchip Technology
MCHP
are also looking to benefit from the recent declaration of the act by the government.
onsemi recently expanded its Hudson, NH facility, which will increase SiC boule production capacity by five times year over year. This will aid in meeting the rising demand for SiC-based solutions, which is critical for developing EVs and energy infrastructure and is an important contributor to decarbonization. onsemi, however, signed long-term supply agreements with various customers for the next three years, which is expected to help secure $1 billion of committed SiC revenues in 2023.
The government’s recent declaration will help Microchip to diversify income from its microcontroller business, which is riddled with supply-chain disturbances. Microchip continues developing and introducing a wide range of innovative and proprietary new linear, mixed-signal, power, interface and timing products to spur growth in the analog business.
The recent positive political environment in the United States to support domestic manufacturing supported by the Chips and Science act is positively impacting the share price movement of Entegris peer
Axcelis Technologies
ACLS
, specifically operating in the semiconductor industry.
Entegris’ peer in the Electronics Manufacturing Machinery industry, Axcelis’ shares have risen 7.9% YTD, reflecting the bullish sentiments in the industry.
Entegris’ recent expansion of its manufacturing facility in the United States will help the company in hedging its business operations against forex volatility and help in expanding its supply-chain efficiency and addressing the industry’s long-term capacity constraints.
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