Semi-conductor industry shows prospective year ahead, share prices of major companies rise

The silicon chip market showed a prospective growth in the second calendar quarter 2012 despite the decrease in sales. The stock of most chip makers rose substantially on Friday, August 3, when a report estimated a brighter year for the industry players with increase in sales.

Though the sales in June were 2 percent down from a year earlier but several experts are of the opinion that the year-after-year sales drop has slowed down substantially and June 2012 shows the least of the drop.

Worldwide chip sales of $24.4 billion in June were 2% lower than the same month a year earlier, when chipmakers sold $24.9 billion of circuits.

“The semiconductor industry continues to navigate the turbulent global economy better than most sectors,” SIA President Brian Toohey said. “But macroeconomic uncertainties are limiting overall recovery and growth.”

After the report showed a promising year for industry, Intel stock rose 2.1% Friday, Texas Instruments 3.7%, Broadcom 1.7% and ARM Holdings 3%.

Intel and Skyworks are the two major companies in semi-conductor industry catering to two different categories.

Intel is the major vendor for processors and motherboards to PC makers and Apple while Skyworks sells its chips to Apple and Samsung mostly used in portable devices. Skyworks’ share price rose 1.6 percent on Friday after the report.

Mellanox Technologies, an Israeli designer of chips for communications and storage systems, has the best-possible 99 Composite Rating, the material used in the chip; higher the percentage higher the rating. The company is also in IBD 50. Its price rose 2.3% Friday.

RBC Capital Markets analyst Doug Freedman said he expects chip sales will remain soft for the summer and into fall, but they could improve in the back half of the year.

“Despite our expectation for a sub-seasonal Q3 we believe that total semiconductors sales reach $300 mil level (for 2012) largely reflecting budget flush in the PC market and Qualcomm (QCOM) clearing backlog in the handset space,” Freedman said in his report.

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Posted by Usman Khalid on Aug 4 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.