3 European Chip Stocks In Focus After The Belgan Arrest

A high profile arrest at Belgian GaN chipmaker Belgan has pushed Europe’s quiet semiconductor security story into the spotlight and turned intellectual property into a headline risk investors cannot ignore. This is not just a legal drama; it is a live test of how far Europe will go to lock down chip technology and secure supply chains. This article walks through 3 stocks exposed to that news and outlines why they may now warrant a closer look from investors.

The three stocks below are a focused starting sample. The full screen surfaced 31 more European semiconductor onshoring and supply-chain security plays with equally compelling narratives that are not covered here. To identify and analyze the highest conviction ideas straight away, head into the European semiconductor onshoring and supply-chain security plays screener.

Melexis (ENXTBR:MELE)

Melexis is a Belgian semiconductor designer that builds sensor and driver chips for cars, covering functions like motor control, pressure, temperature and lighting. This positioning connects directly to Europe’s push to localize critical EV and transport electronics. The company effectively earns all of its €848.9 million in revenue from the development and sale of integrated circuits, and sells into a wide spread of regions including China, Germany and the United States. With a market cap of about €2.7b, Melexis is a mid sized pure play on automotive chips with global reach but European roots.

For investors tracking Europe’s push to secure chip supply for EVs and safety critical transport systems, Melexis offers direct exposure to the sensor and power electronics inside those vehicles rather than to headline grabbing fabs. The company combines a focused automotive IC portfolio, high forecast returns on equity and ongoing dividends with real trade offs, including high leverage and dividends that are not fully covered by earnings. Recent buy backs and steady product demand suggest management is confident enough to keep returning cash, yet softer net income and mixed broker sentiment show the story is not risk free. If you want a closer look at how that balance between quality, balance sheet strain and policy tailwinds could evolve, Melexis is worth putting on the short list.

Melexis sits at the crossroads of policy tailwinds, leverage pressure and shareholder payouts, yet many investors still treat it as a simple auto chip story. Get the 2 key rewards and 3 important warning signs

X-FAB Silicon Foundries (ENXTPA:XFAB)

X-FAB Silicon Foundries is a Belgian contract foundry that helps European and global customers produce analog and mixed signal chips, MEMS and silicon photonics. That matters for the onshoring theme because it gives car makers, medical device groups and industrial suppliers a local place to source power and compound semiconductor production instead of relying purely on Asian capacity. The company generates its entire $846 million in revenue from CMOS and MEMS operations and has a market cap of about €790 million.

For investors following Europe’s push to secure supply of specialty chips, X-FAB Silicon Foundries offers a direct way to tap into local fabrication of SiC and GaN technologies used in EVs, industrial power and data centers. The attraction is a mix of exposure to electrification and data center demand, along with foundry services that customers may view as politically safer after the Belgian IP case. The trade off is that recent quarters have shown losses and margin pressure, plus the risk that heavy capex and tougher competition could strain returns if orders soften. The full story turns on whether that onshoring demand and X-FAB’s specialty processes can offset those pressure points over time.

X-FAB Silicon Foundries could be where onshoring hopes and recent losses start to decouple. See how its specialty focus, capex load and customer mix line up in the 3 key rewards and 2 important warning signs (1 is major!)

Riber (ENXTPA:ALRIB)

Riber is a French specialist in molecular beam epitaxy equipment that underpins compound semiconductor production for GaN, SiC and other materials used in power electronics, RF, aerospace and defense, which ties it closely to Europe’s onshoring and supply chain security push. The company generates about €40 million in revenue entirely from semiconductor equipment and related services across tools, sources and accessories. With a market cap of about €179 million, Riber is a small but focused equipment supplier in this theme.

Riber gives you exposure to the equipment that customers need to grow secure GaN and compound semiconductor capacity, at a time when IP protection and export controls are moving up the EU agenda after the Belgan case. Forecast earnings and revenue growth, coupled with a share price that analysts see as below estimated fair value, are presented as indicators of a business that may still be in the earlier stages of its scale up, yet it comes with real trade offs. A high P/E, reliance on external funding and a relatively fresh board all raise questions about how smoothly that growth can be managed. The recent multiyear order with 3SP Technologies for high power laser diode production illustrates the type of opportunity that exists if Riber executes, but the full risk reward picture runs deeper than a single contract.

Riber’s equipment story looks like a scale up still taking shape, yet the real twist may sit in how funding needs and a high P/E interact with the 3 key rewards and 1 important warning sign

Seeking Fresh Alternatives Beyond Semiconductors

Markets move fast and the strongest stories often break out before most investors notice. Keep your momentum with fresh ideas that are still under the radar for now. Act now.

• Spot cash rich businesses before momentum really starts flying by scanning the list of solid balance sheet and fundamentals (441 results) and focus on companies with room to strengthen their market position.
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• Explore electrification trends early by reviewing the 39 power grid technology and infrastructure stocks and concentrate on companies involved in building the backbone of future energy systems.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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