Advanced Energy Industries, Inc. (AEIS)

Advanced Energy makes power supplies for the machines that manufacture chips.

Plasma in an etch or deposition tool is sustained by precisely controlled power: a deviation of a fraction of a percent changes the result on the wafer. The company makes such supplies, and they are designed into the tool and qualified together with it.

The customer is the equipment maker rather than the fab, so demand follows the industry's capital spending with its usual cyclicality. The second part is power supplies for data centres and medical equipment, less cyclical and smoothing the troughs. Risks: the semiconductor cycle, export restrictions and customer concentration. The dividend is small.