UBS Warburg raised its growth forecast for the Semiconductor sector. 2003 growth was moved from 8% to 12%, and 2004's number was bumped up to 18% from 17%. The firm is attributing the optimistic outlook to recent upgrades for both the PC and handheld markets. It expects 2004 industry-wide revenues to top $185 billion. The analyst firm maintained an Overweight rating on the industry and said top sector performers will be Microprocessors, Foundry, and Semi-production Equipment. Favorite stocks include: INTEL (INTC, $33, up 2), INFINEON TECHNOLOGIES (IFX, $14.70, up 0.76), and TEXAS INSTRUMENTS (TXN, $29, up 2).
We have no doubt that the Semiconductor sector is headed higher given that TAIWAN SEMICONDUCTOR (TSM, $11.06, up 0.57) just announced that it will use 25% of its 2004 revenue for capital equipment spending. Chip demand is booming, and the sector is beginning to see a dramatic pickup in capacity utilization. |
