Hidden Gems – Canada’s Best Semiconductor Stocks in February 2025

Key takeaways

Canada’s semiconductor sector is small but innovative. While Canada isn’t a major player in semiconductor manufacturing, companies POET Technologies and Celestica are making strides in specialized areas like high-speed connectivity, photonics, and advanced electronics manufacturing.

Demand for semiconductors is booming across industries. From AI and cloud computing to 5G, autonomous vehicles, and virtual reality, semiconductors are at the heart of technological advancement, creating long-term growth opportunities for these companies.

Challenges remain, but innovation drives potential. Supply chain risks, competition, and rapid technological changes pose challenges, but companies that innovate and align with high-growth industries have the potential to thrive.

3 stocks I like better than the ones on this list.

For those looking for semiconductor exposure, you’ll likely think you need to head south of the border or even internationally.

However, there are some top Canadian semiconductor stocks that you can buy right on Canadian exchanges. They just aren’t as notable of names such as Taiwan Semiconductor (TSM), Advanced Micro Devices (AMD), or Nvidia (NVDA), and there aren’t many.

In fact, I’d argue there is one quality semiconductor play in Canada, with another one being more of a speculative higher-growth bet.

Let’s look at some of the top Canadian semiconductor stocks to buy

A disclosure before we begin. One of the semiconductor stocks listed below is a small/micro-cap company, prone to much larger swings in price and overall risks than the major player on the list.

Although they do promise more upside, you must understand that they pose much higher risks if you choose to invest. They must be monitored extensively, more so than buying long-term investments like blue chip stocks.

Ensure you understand your investment objectives and risk tolerance before considering these companies. With that being said, let’s get started.

What are the best Canadian semiconductor stocks?

Innovative photonic integration solutions provider

POET Technologies Inc. (PTK.V)

POET Technologies is a design and development company offering high-speed optical engines, light source products, and custom optical modules to the artificial intelligence systems market and hyperscale data centers.

P/E:

5 Yr Revenue Growth: -%

5 Yr Earnings Growth: -%

5 Yr Dividend Growth: -%

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  • Cutting-Edge Technology: POET’s Optical Interposer platform enables seamless integration of electronic and photonic devices, enhancing performance and reducing costs. poet-technologies.com
  • Diverse Market Applications: Serving data centers, telecommunications, IoT, automotive LIDAR, and medical devices, POET addresses multiple high-growth industries. stockanalysis.com
  • Strategic Partnerships: Collaborations with industry leaders bolster POET’s market presence and accelerate technology adoption.
  • Scalable Business Model: The company’s solutions are designed for scalability, catering to the needs of hyperscale data centers and large-scale AI systems.
  • Focus on AI Integration: By targeting the artificial intelligence market, POET aligns itself with one of the fastest-growing technology sectors.
  • Experienced Management Team: Leadership with deep industry expertise guides POET’s strategic direction and innovation efforts.
  • Data Center Growth: The expansion of hyperscale data centers drives demand for high-speed optical interconnect solutions.
  • AI System Development: As AI applications proliferate, the need for efficient optical modules in AI systems increases.
  • Telecommunications Advancements: The rollout of 5G and beyond presents opportunities for POET’s photonic technologies.
  • Automotive LIDAR Adoption: Growth in autonomous vehicles could boost demand for POET’s solutions in automotive LIDAR systems.
  • Market Adoption Rates: Slower-than-expected adoption of POET’s technologies could impact revenue growth.
  • Technological Challenges: Overcoming technical hurdles in integrating photonic and electronic devices is critical for success.
  • Competitive Pressures: The photonics industry is competitive, with potential for new entrants and technological advancements from rivals.
  • Capital Requirements: Continued innovation and scaling may require significant capital investment, posing financial risks.

Global leader in design and manufacturing solutions

Celestica Inc. (TSX:CLS)

Celestica Inc. provides supply chain solutions in North America, Europe, and Asia. It operates through two segments: Advanced Technology Solutions, and Connectivity & Cloud Solutions. The company offers a range of product manufacturing and related supply chain services.

P/E: 35.0

5 Yr Revenue Growth: 11.0%

5 Yr Earnings Growth: 47.7%

5 Yr Dividend Growth: -%

Yield: -%

  • Comprehensive Service Offering: Celestica delivers end-to-end supply chain solutions, from design to manufacturing, catering to diverse industries.
  • Global Footprint: With operations across North America, Europe, and Asia, Celestica serves a broad customer base and leverages global market opportunities.
  • Diverse Industry Exposure: Serving sectors like aerospace, defense, healthcare, and industrial, Celestica mitigates risk through
  • Cloud and 5G Expansion: As demand for cloud computing and 5G infrastructure grows, Celestica’s connectivity and cloud solutions segment is positioned for increased business.
  • Supply Chain Resilience: The company’s ability to navigate supply chain disruptions and ensure timely deliveries will be crucial, especially given recent global supply chain challenges.
  • AI and High-Performance Computing: With the rise of AI-driven workloads, there’s growing demand for high-performance computing hardware, an area where Celestica’s manufacturing services could find more opportunities.
  • Electrification and Aerospace Growth: The push for electrification in industries like automotive and the recovery in aerospace and defense sectors could drive increased demand for Celestica’s solutions.
  • Supply Chain Volatility: Given its global operations, Celestica remains vulnerable to supply chain disruptions, component shortages, and logistical delays.
  • Customer Concentration: A significant portion of its revenue comes from a few key customers, which poses a risk if any major client reduces orders or switches suppliers.
  • Economic Slowdowns: A downturn in global economic conditions could negatively impact demand for Celestica’s services, especially in cyclical industries like consumer electronics.
  • Technological Shifts: Rapid advancements in manufacturing technology and automation could require continued investment to stay competitive, adding financial pressure.

Why Canadian semiconductor stocks?

Semiconductors are the backbone of modern technology, there is zero doubt about that.

Whether it is your automobile, smartphone, tablet, or any other consumer electronics product, semiconductors are critical. Their demand will only grow, especially as we enter new fields like the Internet of Things and artificial intelligence.

AI has exploded in popularity over the last few years, electric vehicles are taking center stage, and government regulations are only increasing the demand for semiconductors. All of these should be permanent tailwinds, at least for the foreseeable future.

Is there a semiconductor ETF that holds the best semiconductor stocks?

If you’re looking to buy all the top semiconductor companies globally at once, you’re in luck. That is because there is the Global X Global Semiconductor Index ETF trading under the ticker CHPS.

It contains some of the fastest-growing companies in the industry, including Nvidia, ASML Holdings, Broadcom, Intel, Qualcomm, and Advanced Micro Devices.

With assets under management of just over $105M, it is a relatively small ETF. However, considering it started in June 2021, it will likely continue picking up steam, especially as the industry continues to grow.