Sector Snap: Chip stocks rise

AP News
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Posted: Dec 01, 2009 3:28 PM

Shares of several chip makers rose Tuesday, helped by economic reports that lifted the overall market and an industry report that showed global semiconductor sales continued to improve in the third quarter.

A private measure of manufacturing activity rose for the fourth month in a row in November. The Institute for Supply Management, a trade group of purchasing executives, said its index read 53.6, which is down from 55.7 in November. Readings above 50 indicate growth.

The report also indicated that new orders rose above 60 for the third time in the past four months. The last such streak was in 2005.

A chip-specific report that came out Monday also cheered the sector. A report from the Semiconductor Industry Association said chip sales totaled $61.9 billion in September, which is up 20 percent from the second quarter but down 10 percent from the year-ago quarter.

The group said that demand for personal computers and cell phones is helping, with electronics makers stocking up on parts in advance of the holiday season. The group said sales "are running well ahead of the worst-case scenarios projected early in the year."

Shares of Intel Corp., which is the world's leading chip maker, rose 47 cents, or 2.5 percent, to $19.67. Rival Advanced Micro Devices Inc.'s shares gained 23 cents, or 3.3 percent, to $7.24.

Shares of Fairchild Semiconductor International Inc. shares jumped 60 cents, or 7.4 percent, to $8.70, while shares of chip maker RF Micro Devices Inc. rose 32 cents, or 7.4 percent, to $4.64.

Also Tuesday, Altera Corp. shares jumped $1.04, or 5 percent, to $22.07, after the chip maker raised its fourth-quarter revenue outlook.

Altera said Monday that it expects fourth-quarter revenue to rise by 15 percent to 18 percent from the previous quarter, due to improved demand and solid sales to telecom equipment makers, especially for rollouts in India and China. It had previously forecast 6 percent to 10 percent growth.