KLA, Applied Materials among those to benefit from 're-shoring' of semiconductors
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As the brutal Russian invasion of Ukraine has dominated the recent global headlines, implications for how the conflict will impact the world economy are also not far from the thoughts of politicians and business officials.
And with governments around the world realizing that supply chain consistency is important to their country's future, certain industries are coming back on shore, notably semiconductors, and companies like Applied Materials (NASDAQ:AMAT) and KLA Corp. (NASDAQ:KLAC) are likely to benefit from this trend, according to Bank of America.
Analyst Vivek Arya noted that these companies, along with Lam Research (NASDAQ:LRCX) and Nova (NASDAQ:NVMI) are seen as gaining the most "from silicon re-shoring efforts as well as growing cost [and] complexity of leading edge manufacturing."
Applied Materials (AMAT) is likely to benefit if there is a stronger-than-expected demand for electronics that increase the demand for semiconductors, as this would further increase the sale of equipment for semiconductors. Arya has a $190-a-share price target on Applied Materials (AMAT) stock.
KLA Corp (KLAC), which Arya has a $500-a-share price target on, is seen as having a "unique position as a key enabler of semiconductor manufacturing technology." When coupled with revenue that is less cyclical in nature, industry leading profit margins and strong shareholder returns, the stock is poised to benefit.
Lam Research (LRCX) and Nova (NVMI) are also is solid positions, with Arya putting a $785-a-share price target on Lam's (LRCX) stock, and $140-a-share target price on Nova (NVMI), implying a roughly 50% and 40% gain, respectively, from those shares current levels.
Arya said Russia's invasion of Ukraine is likely to have a "manageable" impact on the production of semiconductors, as Ukraine is home to roughly half of the world's neon has, a critical component for manufacturing chips. However, Arya also noted that consumption of neon gas has gone down in recent years and is now a "fraction" of what it used to be and foundries have been able to source supply from other parts of the world, making the invasion manageable. 
"In our view, Russiaâs actions have re-emphasized the risk to U.S. technology leadership and national security of relying so heavily on Taiwanese companies for manufacturing where China could be a similar aggressor," Arya said. 
China going after Taiwan in a similar manner is certainly a worry for semiconductor investors, as Taiwan Semiconductor (NYSE:TSM) is the world's largest manufacturer of chips, making processors for companies like Apple (NASDAQ:AAPL), MediaTek and Advanced Micro Devices (NASDAQ:AMD).
This reason, as well as a host of others, highlight the need for the U.S. to pass and fund the CHIPs Act, according to Scotten Jones, President of IC Knowledge, an expert on semiconductor design and manufacturing.
Speaking with Arya, Jones said that if the U.S. really wanted to bring semiconductor manufacturing back to the country, the investment over the next 10 years would need to jump ten-fold, to $500 billion, up from a potential $50 billion. 
For its part, Intel (NASDAQ:INTC) said in January that it will spend at least $20 billion on a massive new chip-manufacturing facility near Columbus, Ohio, with plans for production to start in 2025.