Chip stocks jump as latest figures show strong March sales

The chip sector soared to a multi-month high Thursday after figures showed strong March sales.

The Semiconductor Industry Association, which represents major U.S. chip companies, said sales rose 3.4 percent on February's figures, with logic and microprocessor chips leading the market. First quarter sales rose 3.8 percent year-over-year.

The results were good news for microprocessor market leader Intel Corp.

Reviewing the SIA figures, Lehman Brothers analyst Tim Luke praised Intel's profit margin and new product line and said the company was one of his priorities in a mixed market.

Shares in the Santa Clara, Calif.-based company jumped $1.09 or 5 percent to a four-month high of $23.37 in afternoon trading. They have traded in the last 12 months between $18.05 and $27.99.

Luke also recommended cell phone chip makers such as San Diego, Calif.-based Qualcomm Inc.

Qualcomm shares rose 94 cents or 2.1 percent to $44.13 in afternoon trading. They have traded in the last year between $35.17 and $47.72.

Across the sector, shares traded at their highest point since early January.

The chip sector, as measured by the Philadelphia Semiconductor Index, rose 12.6 points or 3.2 percent to 397.62.

Microchip assembly and test company Amkor Technology Inc. soared more than 20 percent after it said it expects its second-quarter profit to beat Wall Street forecasts by a wide margin.

It anticipates profit of 32 cents to 36 cents per share, while analysts polled by Thomson Financial expect profit of 28 cents per share.

Lehman Brothers analyst C.J. Muse said the company's success is driven by its increased share of the video game chip market.

Shares in the Chandler, Ariz.-based company jumped $1.93 or 20.3 percent to $11.48 in afternoon trading. They have traded in the last year between $6.14 and $16.29.

Shares in power management chip maker Advanced Analogic Technologies Inc. also rose after Jefferies & Co. analyst John Lau said it was likely to win new mobile contracts.

Shares in Sunnyvale, Calif.-based Advanced Analogic rose 27 cents or 3.9 percent to $7.19 in afternoon trading. They have traded in the last year between $5.39 and $13.08.