Sector Snap: Semiconductors Up

Microchip stocks rose Thursday as two chip companies posted solid results and Intel Corp.'s chairman struck an upbeat note on the world economy.

San Jose, Calif.-based Fairchild Semiconductor International Inc. helped investor confidence with fourth-quarter profit that jumped on strong analog chip sales.

Excluding one-time items, it earned 33 cents per share, compared with 21 cents per share in the same quarter in 2006.

The earnings were comfortably ahead of Wall Street expectations. Analysts polled by Thomson Financial were expecting earnings of just 29 cents per share.

Fairchild shares rose 33 cents or 2.6 percent in afternoon trading. They have traded in the past year between $11.90 and $20.55.

Intel Chairman Craig Barrett helped bolster confidence by reassuring investors that Intel's U.S operations are experiencing only a seasonal slowdown.

Barrett also said the world economy is solid and the U.S may be talking its way into a recession.

He was speaking on CNBC at the World Economic Forum in Davos, Switzerland.

Intel shares rose 43 cents or 2.2 percent to $20.43. They have traded in the past year between $18.05 and $27.99.

Applied Micro Circuits Corp. rose after Oppenheimer & Co. analyst Allan Mishan said in a note to investors said the company's third-quarter earnings were "a ray of hope."

Mishan said he was pleased to see real progress at the company and noted that its outlook for the current fourth quarter sees pretax margins in the high single digits.

Applied Micro shares jumped 50 cents or 6 percent to $8.74 in afternoon trading. Shares have traded in the past year between $6.46 and $15.88.

After a steep drop on Tuesday and Wednesday, the Philadelphia Semiconductor Index rose 6.5 points to 358.82 in afternoon trading.