One group that's often overlooked in the media hype surrounding technology is companies that make the things that make the sexier things. There's a lot of coverage of the iPhone or Android phones, for instance, but what about the things inside them? No one seems to talk much about the chipmakers and other manufacturers who actually profit on the sales of consumer electronics.
Chipmaker Broadcom Corporation (NASDAQ:BRCM)is the one that caught my eye recently. With a market cap of almost $20 billion and its chips all over, one would think that Broadcom Corporation (NASDAQ:BRCM) would be better known. Sadly, outside of some hardcore industry types, I'd say that not one person in fifty knows which firm makes the chips in their personal technology. Heck, even that might be an overestimate.
Take this away, though: Broadcom Corporation (NASDAQ:BRCM) chips are used in BOTH iPhones and Android phones. So in the coming ferociously-covered “smartphone war” Broadcom Corporation (NASDAQ:BRCM) and other chip manufacturers will win no matter what. Like armsmakers during wartime, no matter who ends up winning, chip manufacturers will come out ahead.
Broadcom Corporation (NASDAQ:BRCM) is well positioned as a company. With the firm's chips running across all sort of activity and devices, growth can be maintained even if one of the companies that uses them has a rough quarter or two. Recently, new orders from Samsung may be giving the firm an extra boost as the next wave of mobile devices hits the market.
The firm's stock has been up and down over the last year and is, in fact, down 11.5% since twelve months ago. Still, it's grown 13.6% from a November low, and the firm raised its dividend by 10% during that time. It now pays a yield of 1.28%. That's not enough to pop anyone's eyes out, but it's a nice bonus.
Intel Corporation (NASDAQ:INTC)
Another firm that is quiet (aside from its iconic sound effect, I guess). Still, Intel is the chipmaker that most consumers could name if asked. That doesn't mean the company gets a free pass on performance. The company is a good performer, posting an operating margin of 27.44% for all of 2012.
Still, that hasn't been reflected in the share price. Intel Corporation (NASDAQ:INTC) has seen a long, slow decline over the last twelve months that can't be fully accounted for in the news or the company's performance. This has led it to a P/E of 10.02, and I think it's undervalued right now. This could be a time to take a chance on the most famous chip manufacturer of all.