PMC-Sierra Fuels Chips Further

Chip stocks rallied Friday amid a broad-based advance based on a strengthening job market and Thursday's encouraging news from semiconductor giant Intel. Adding to the bullish buzz, PMC-Sierra offered upbeat guidance Friday morning.

Communications-chip maker PMC-Sierra said it expects revenue to meet or exceed the high end of its previously issued sales range, for $83 million to $85 million. The initial guidance implied sequential growth of 8% to 10% for the quarter ending June 27.

Analysts were expecting 7 cents earnings on revenue of $84.2 million for the company's June quarter, according to Thomson First Call.

In recent trading, shares of PMC were up 30 cents, or 2.2%, to $13.73, while the benchmark Philadelphia Stock Exchange Semiconductor Index was recently up 2.1% to 473.54.

Other communications chipmakers joined in the party, with Vitesse recently up 30 cents, or 6%, to $5.31 and Applied Micro Circuits up 21 cents or 4.2% to $5.25. Broadcom was higher by 94 cents, or 2.3%, to $42.06.

Separately, Silicon Storage , a developer and manufacturer of flash memory technology, was recently up 59 cents, or 5%, to $12.44 ahead of its midquarter update, which was scheduled to begin at 11:15 a.m. EDT.

Meanwhile, Intel rose 89 cents, or 3.3%, to $28.30 as investors warmly responded to Thursday's midquarter update, in which the company tilted sales guidance to the high end of the range.

So far in June, a few other chipmakers have issued mildly positive comments, with Xilinx lifting its gross margin guidance to the high end of the range (while reiterating its previous quarterly sales outlook) and Altera predicting sales growth at the high end of guidance.

Fairchild Semiconductor endorsed its previous sales forecast but issued a cautionary note about volatile ordering patterns.