The coronavirus (COVID-19) has been punishing stocks, especially chipmakers. The Dow is down nearly 300 points today, while chip stocks are down nearly three times as much. The VanEck Semiconductor ETF (NASDAQ: SMH) is down 3% today.

It’s no surprise because semiconductors are mostly made in China.

The coronavirus has hurt Chinese productivity and slowed shipping while both countries try to get a handle on the virus.

Just look at what happened to Apple Inc. (NASDAQ: AAPL) stock this week, one of the companies most reliant on chips from China.

The company issued a profit warning Monday because of concerns related to the coronavirus. It’s share price fell by over 2% the next day after saying it will miss quarterly revenue targets because of the outbreak.

But we can use this little disruption to our advantage.

You see, semiconductors are essential to modern technology, and they’re central in everything from iPhones to 5G communications equipment to cloud computing and the Internet of Things. We’ve been following and recommending investing in these megatrend areas for years.

There is no better way to build wealth than to find one of these trends and ride it.

And one chip stock is positioned to avoid the worst of the coronavirus fallout.

The company’s business model keeps it out of China, yet it’s still essential to the chip sector.

Its steady business is rewarding investors with a 5% dividend yield.

Plus, it’s not just our top-rated semiconductor stock, it’s our top-rated tech stock…

Our Best Chip Stock Offers a 5% Dividend Yield

Our pick is ChipMOS Technologies Inc. (NASDAQ: IMOS), one of the largest semiconductor services companies in the world. Aside from the many fundamental reasons to like it, this company is based out of Taiwan. That provides natural protection from China’s pandemic.

It provides a full range of back-end testing services for liquid crystal display (LCD) drivers, high-density memory, and mixed-signal semiconductors.

It’s our highest-rated tech stock, with a Money Morning Stock VQScore™ score of 4.9. This is our proprietary valuation system that digs into companies’ fundamentals to find stocks with the highest breakout chances.

Last month, ChipMOS proved us right by announcing its highest quarterly revenue since early 2015.

LCDs are becoming essential to all areas of tech. They are used in a wide variety of applications, including televisions, computer monitors, instrument panels, aircraft cockpit displays, and indoor and outdoor signage.

Small LCD screens are common in portable consumer devices such as digital cameras, watches, calculators, and mobile telephones, including smartphones. You’ll also find them in other consumer electronics, such as DVD players, video game devices and clocks. In other words, they’re everywhere.

Rather than make the LCDs themselves, ChipMOS makes the tools used to make them. It’s not much different from the California gold rush of 1849, where the pick and shovel makers made a fortune despite most of the gold miners coming up empty.

That means you’re cashing in no matter which company wins the chip wars.

As if that were not enough, the stock currently offers a fat 5% dividend yield and is one of the top 10 semiconductor stock yields available.

Add onto that upside of about 25% this year and you’re looking at an excellent way to profit from the tech sector while everyone else panics about the coronavirus.

Source: Money Morning