Good News and Timing Have Investors Choosing Comm Chips

Chip investors are getting itchy.

A combination of positive economic indicators, a critical support point in the movement of the Philadelphia Stock Exchange Semiconductor index and good quarterly updates from Texas Instruments(TXN Quote), Xilinx(XLNX Quote) and Altera(ALTR Quote) have investors buying up communications chip makers. On top of that, the Semiconductor Industry Association put out January numbers Tuesday morning that included a sequential decline in business from December but signaled a much more favorable year-over-year comparison than the chip industry has seen in many moons. There's nothing individually earth-shattering to boost component makers, but taken together there is enough to convince chip investors on the verge to pull the trigger.

Tuesday a motley gang comprised of Vitesse(VTSS Quote) (+8%), Broadcom(BRCM Quote)(+7%), Anadigics(ANAD Quote) (+8%), Applied Microcircuits(AMCC Quote) (+4%) and Lattice Semiconductor(LSCC Quote) (+5%) maintained strong moves into positive territory. Not quite implicated in last week's Altera(ALTR Quote) mid-quarter update or Xilinx's(XLNX Quote) upside preceding guidance revision, the companies benefit nonetheless from the revelation that inventories at customers such asCisco(CSCO Quote) have finally cleared. ...