The Chips Under the Hood
Atit Danak@danakatit
The idea
I believe the real money in AI is in the sockets, not the spotlight, so I own the power and analog chips that run cars, factories, the grid and data centre racks instead of chasing GPU and memory names everyone already knows. Over half the portfolio sits in cheap auto and industrial chipmakers coming out of a long inventory slump, with smaller slices in chips riding AI rack power demand and in early robotics sensing and vision chips. I keep some cash on the side and spread bets across many names rather than one.
What will be bought
- Car and factory chipmakers still priced below the broader market, with chips that carry over into robots and the grid. · NXP SemiconductorsIt is the largest car chipmaker and sits on the take's bet that auto chips spread into drones, warehouse robots and smart factories., ON SemiconductorIt makes silicon carbide power chips for electric vehicles, chargers and factory gear, the socket-winning power parts under the hood., STMicroelectronicsIt sells the microcontrollers and power chips inside cars and factory machines, a direct bet on auto chips spreading into physical uses., Microchip TechnologyIts small control chips sit in cars, factories and defence gear, and it is adding data centre and space products beyond autos., LittelfuseIt makes the fuses, protection and switching parts every car, charger and factory line needs, a boring socket that all of them require., Power IntegrationsIt makes high-voltage power conversion chips used in appliances, industrial gear and cars, and is moving into power delivery for data centres., Diodes IncorporatedIt makes analog and power parts for cars, industry and computing at a lower price than the large chip makers., Vishay IntertechnologyIt sells basic power parts like resistors and transistors that go into cars, factories and servers in huge volumes.54%
- Every AI server needs power conversion chips, so these grow with data centre spending without owning the GPU makers. · Monolithic Power SystemsIt makes the power conversion chips that feed AI processors inside server racks, letting the take ride data centre spending without owning the GPU makers., VicorIt makes dense power modules for AI racks, the specialised parts that fit this take's bet on data centre power conversion., Alpha and Omega SemiconductorIt is a small maker of power stages for servers and PCs, a side door into the take's bet on AI rack power conversion.20%
- Robots need vision, motor sensing and fast sensor links, the same jobs these chips already do in cars and factories. · Allegro MicroSystemsIt makes the sensors that track motor position and current in cars, and the same parts go into robot joints and factory motors., Lattice SemiconductorIt makes small, low-power field-programmable gate arrays that can connect a robot's cameras and sensors to its brain on the device., AmbarellaIt makes the vision chips that let robots, drones and cameras see and think on the device, the eyes that give robots their sight., CEVAIt licenses chip designs for wireless and edge AI that other companies put inside robots, drones and devices, getting paid per chip without building any.18%
- Cash9%