Worldwide Semiconductor Sales Rise 6.3% in October
Bloomberg News
December 4, 1998, 1:33 p.m. PT
San Jose, California, Dec. 4 (Bloomberg) -- Worldwide sales
of semiconductors rose a stronger-than-expected 6.3 percent in
October from September, according to an industry trade group.
The Semiconductor Industry Association, in a report to its
subscribers, said worldwide sales totaled $10.87 billion,
compared with $10.23 billion in September. That's still down 9.3
percent from $11.99 billion in October 1997.
The report is further evidence that the semiconductor market
is rebounding from a slump brought on by the Asian economic
crisis and slower growth worldwide. The shares of Intel Corp.,
Micron Technology Inc. and others have been rising since October
amid signs that personal computer sales are robust.
Memory-chip prices ''are up and microprocessor demand is
through the roof,'' said analyst Dan Niles at BancBoston
Robertson Stephens in San Francisco. ''These numbers will
continue to run better than most people expected.''
The Semiconductor Industry Association declined to comment
on the report, which was faxed to subscribers today.
The 6.3 percent gain in October from September is bigger
than the 4.18 percent gain in September from August, suggesting
that the rebound in chip sales may be picking up speed.
Japan
Semiconductor sales in Japan, a market that has been hurt by
the nation's weak economy, rose 5.9 percent to $2.15 billion from
$2.03 billion in September. The October total for Japan is still
down 21.5 percent from $2.74 billion in October 1997.
Sales of chips in the Americas region rose 5.23 percent to
$3.62 billion in October from $3.44 billion in September. That's
still down 9.05 percent from $3.98 billion in October 1997.
Intel and other chip stocks rose earlier today, then added to
their gains after the Semiconductor Industry Association's report
became public. Optimism is growing that sales of PCs and computer
networking equipment -- big end-markets for chips -- will remain
strong into 1999, analysts said.
The shares of Intel, the world's biggest chipmaker, rose
6 13/16 to a record 116 5/16 in trading of 17.6 million, making
it the third-most active U.S. stock. Earlier, they reached 116
5/8. Memory-chip maker Micron rose 3 3/4 to 50 1/8. Intel rival
Advanced Micro Devices Inc. rose 1 7/8 to 31 3/8.
Texas Instruments Inc. rose 1 3/4 to 82 7/8. Xilinx Inc.
rose 4 3/16 to 61, and Altera Corp. rose 1 5/16 to 55 11/16.
Several analysts raised ratings on chip companies yesterday
and others held conference calls to reiterate bullish views.
''Intel's results could be stronger than expected in the
first half,'' said Claude Hazan, an analyst at CE Unterberg
Towbin in San Francisco, who rates Intel ''buy.'' ''People don't
want to be caught on the wrong side of this rally.''
Favorites
Niles at BancBoston Robertson Stephens yesterday held a
conference call where he told investors why he thought many chip
stocks had more room to rise. Among his favorites are Intel,
Micron, Texas Instruments, and MIPS Technologies Inc.
''Intel continues to knock the cover off the ball,'' Niles
said on the call. He rates Intel shares ''strong buy.''
In another endorsement of the industry's return to health,
analysts at NationsBanc Montgomery Securities yesterday raised
their rating on National Semiconductor Corp. to ''buy'' from
''hold.'' National Semiconductor makes chips that compete with
Intel's, as well as semiconductors that go in communications
equipment. National shares rose 1/8 to 16 3/4.
''People are seeing the earnings momentum come back into the
stock and want to own it,'' said Phil Schettewi, managing partner
at Loomis, Sayles & Co. in Washington, D.C., which owns Intel
shares and has $4 billion under management. |
