As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the semiconductor manufacturing industry, including Photronics (NASDAQ: PLAB) and its peers.

The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment.

The 14 semiconductor manufacturing stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.3% while next quarter’s revenue guidance was 0.6% below.

Luckily, semiconductor manufacturing stocks have performed well with share prices up 14.4% on average since the latest earnings results.

Photronics (NASDAQ: PLAB)

Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.

Photronics reported revenues of $215.8 million, down 3.1% year on year. This print exceeded analysts’ expectations by 5.5%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.

Commenting on the fourth-quarter performance, Chairman and CEO George Macricostas said, "Photronics delivered very good results in our fiscal fourth quarter achieving record high end revenue with particular strength in the United States. We continue to see positive forecasts from our customers in the U.S. validating our U.S. investment plans, while our Korea capability extension is also anticipated to help diversify our geographic revenue mix and increase our exposure to leading-edge chip designs in the future.”

Interestingly, the stock is up 32.5% since reporting and currently trades at $34.05.

Is now the time to buy Photronics? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Teradyne (NASDAQ: TER)

Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ: TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices.

Teradyne reported revenues of $769.2 million, up 4.3% year on year, outperforming analysts’ expectations by 3.3%. The business had a stunning quarter with an impressive beat of analysts’ adjusted operating income estimates and revenue guidance for next quarter exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 37.5% since reporting. It currently trades at $198.55.

Is now the time to buy Teradyne? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Entegris (NASDAQ: ENTG)

With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.

Entegris reported revenues of $807.1 million, flat year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and EPS in line with analysts’ estimates.

As expected, the stock is down 9.6% since the results and currently trades at $85.50.

Read our full analysis of Entegris’s results here.

Semtech (NASDAQ: SMTC)

A public company since the late 1960s, Semtech (NASDAQ: SMTC) is a provider of analog and mixed-signal semiconductors used for Internet of Things systems and cloud connectivity.

Semtech reported revenues of $267 million, up 12.8% year on year. This print met analysts’ expectations. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.

Semtech had the weakest performance against analyst estimates among its peers. The stock is up 6.8% since reporting and currently trades at $74.92.

Read our full, actionable report on Semtech here, it’s free for active Edge members.

Applied Materials (NASDAQ: AMAT)

Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.

Applied Materials reported revenues of $6.8 billion, down 3.5% year on year. This number topped analysts’ expectations by 2.2%. Aside from that, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but an increase in its inventory levels.

The stock is up 16.4% since reporting and currently trades at $260.44.

Read our full, actionable report on Applied Materials here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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