Intel, Chip Stocks Rally as Report Shows Rising Sales (
Bloomberg News
November 4, 1998, 11:06 a.m. PT
New York, Nov. 4 (Bloomberg) -- Intel Corp., Micron
Technology Inc. and shares of other semiconductor makers climbed
after an industry report showed that computer-chip sales are
rising.
Intel, the world's largest maker of microprocessors, rose 3
1/2 to 93 15/16 in midafternoon trading of 18.1 million, making
it the second-most active in U.S. markets. Micron gained 2 1/4 to
42 7/16, a 52-week high for the memory-chip manufacturer.
Worldwide chip sales rose to $10.22 billion in September,
from $9.81 billion in August and $9.67 billion in July, according
to the Semiconductor Industry Association. While September sales
are less than a year ago, the steady uptick sparked speculation
that this year's slump may be abating amid improving sales of
personal computers and networking and communications equipment.
''We've reached a bottom,'' said analyst Claude Hazan at
C.E. Unterberg, Towbin in San Francisco, who has ''buy'' ratings
on the shares of both Intel and Micron.
Shares of chipmakers declined earlier this year when an
oversupply sent prices tumbling for many kinds of chips. Asia's
economic crisis, which left much of the region in recession, also
hurt the companies by cutting into sales.
Temporary?
The gloomy picture improved in September when Intel said it
would report better-than-expected sales in the third quarter,
helped by PC sales. Memory-chip prices started rising as well.
Some analysts said those trends would be temporary, because
they were driven in large part by the annual rush to buy PCs for
the back-to-school and holiday seasons. Many expected demand to
slow again in the new year.
Yesterday's report from the SIA convinced more analysts that
the new year won't bring further gloom.
''There's more to it than just a seasonal upturn,'' said
Bill McClean, president of IC Insights Inc., a Scottsdale,
Arizona-based semiconductor-market research firm. ''If the global
economy doesn't tank, the worst is behind us.''
Among other chipmakers, Altera Corp. rose 3 3/8 to 44 1/8
and Xilinx Inc. rose 3 1/8 to 46 3/8. Advanced Micro Devices Inc.
jumped 1 3/16 to 24 5/8. Motorola Inc. rose 1 1/16 to 53 1/2.
Computer-component makers also rallied.
Shares of Seagate Technology Inc., the largest independent
maker of disk drives, rose 1 9/16 to 29 1/4. Gruntal & Co.
analyst David Takata raised his rating on Seagate to ''strong
buy'' from ''hold.''
The gains extended to makers of equipment used to
manufacture semiconductors. Applied Materials Inc. rose 1 13/16
to 34 9/16. Novellus Systems Inc. rose 1 13/16 to 39 7/8.
Among computer companies, Hewlett-Packard Co., the No. 3
computer maker, rose 3 3/8 to 63 1/4. International Business
Machines Corp. rose 1 5/8 to 149. |
