In another sign that the economy is slowly improving, experts are predicting that worldwide semiconductor sales will grow nicely in 2010 and continue modest growth through 2012. If you're looking for exposure to the sector, I've got a couple of ideas for you.
First, the details: The Semiconductor Industry Association updated a previous forecast and now sees a 28.4% growth in chip sales this year, followed by 6.3% growth in 2011 and 2.9% in 2012. "Healthy demand in all major product sectors and in all geographic markets" has contributed to the growth thus far, and the SIA sees emerging markets -- led by China and India -- powering demand for the next couple of years.
Where should you be looking for ideas in the sector? Chip maker Intel
The $115 billion tech bellwether reported outstanding first-quarter results in April that were helped by strong PC and notebook sales, and our Inside Value team sees the results as "a possible indicator that IT managers and consumers alike believe it's finally OK to spend on technology again." Mark your calendar for Intel's second-quarter results on July 13 and we'll see if the trend continues.
Another play in this sector is with the companies that make the equipment the chip manufacturers have to use. One of the top possibilities here is FormFactor
With the inventory glut behind us, the semiconductor industry is finally emerging from its "nuclear winter." It's time to put on the shorts and sunglasses and get out the chips!