Ukraine war may not be a strong headwind for semiconductor stocks

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The implications of the Ukraine war for the global financial markets are expected to be quite far-reaching. Still, CNBC’s Kristina Partsinevelos says the semiconductor space is somewhat insulated from the current geopolitical backdrop.

Reasons for optimism on semiconductor stocks

Partsinevelos’ thesis is premised on the following statistics she recapitulated this morning on “Squawk Box”:

Russia contributes only $500 million to $550 billion worth of global semiconductor sales.
None of the major chipmakers is headquartered in Russia or Ukraine.
Biden’s administration is committed to regionalizing the supply chain.

So far, the iShares Semiconductor ETF (SOXX) has slid roughly 2.0% since the start of the war in Ukraine last week.  

What stocks could benefit the most?

As the United States continues to execute on its strategy to domesticize the supply chain, semiconductor equipment makers like Applied Materials, Lam Research, and KLA Corp, can potentially see long-term upside, added Partsinevelos.

Supply constraints remain a challenge

She, however, agreed that supply constraints continue to be a potential headwind for the semiconductor stocks, considering Russia accounts for 33% of the global palladium supply.

The silvery white metal that’s broadly used in the production of electronic chips, has recently seen a sharp increase in prices that now stand at a seven-month high.  

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