Chip stocks rose Monday as investors boosted stocks during the final session of an otherwise dismal month.
Semiconductor investors looked beyond industry data showing an average performance in December and predictions of a modest pullback in global sales during the first quarter. The data points from the Semiconductor Industry Association were largely as expected.
The Philadelphia Semiconductor Index recently rose 1.6% Monday, but is still down 4.3% in January. Gains were spread through the index with
Maxim Integrated Products
all rising modestly.
Global chip sales rose 15% to $18.4 billion in December from the same month last year. Sequentially, sales dropped 3.5% from November, a typical slip from the build-up leading into the holiday shopping season. For all of 2004, chip sales rose 28% to $213 billion, a record for the industry.
Looking ahead, the SIA predicted first-quarter sales would drop 4% to 6% sequentially and be flat for 2005.
"While industry fundamentals moderated at the end of 2004, results for the year and the fourth quarter were relatively in line with our expectations," said analyst Cody Acree with Legg Mason Wood Walker in a morning research note. "As such, we believe the industry is poised to enter 2005 with a much healthier supply/demand balance and that utilization rates, pricing, and revenue will trough early in the year before building stability into the second quarter and growth into the second half."
The week will be a busy one for chip investors as earnings season continues for
( CDN) and
( LEXR), among others. Also, the
is expected to hike interest rates Wednesday by a quarter percentage point.