Intel (INTC) And Other Chip Shares Rally

The shares of Intel Corp. (NASDAQ: INTC) and other semiconductor stocks have rallied. The rebound in corporate spending and high expectations from Asian sales has caused the shares of Intel Corp. to jump 4% and reach their highest in more than one year.

This rally has also taken other semiconductor stocks to high levels with Advanced Micro Devices, Inc. (NYSE: AMD) and Nvidia Corp. (NASDAQ: NVDA) both moving up by 3%. In January, Intel Corp had come out with first quarter forecasts that were above market expectations. Now there is a buzz in the market that the company may soon pre-announce good results. According to Thomson Reuters I/B/E/S, analysts are expecting Intel Corp. to report sales of $9.79 billion in the current quarter, with a profit of 37 cents per share.

Across Asia, optimism over a strong outlook lifted technology shares. The world’s no.1 chip maker Samsung Electronics and the second ranked Hynix Semiconductor went up by 2.1% and 1.7% respectively. In Japan, Tokyo Electron the chip equipment maker was up by 1.2% and a supplier of testers to chip makers Advantest rose 1%. In Taiwan AU Optronics, a company supplying LCDs for computers and flat screen TVs went up by 2.9% and PC memory chip maker Inotera was up by 1.2%.

Tiffany Chen, an analyst based in Taipei, said, “Demand is very strong now, and we are also seeing signs of a recovery in chip demand in the US and Europe.” Some analysts say that signals were visible early in the year of a return of spending by companies for up gradation of equipment and software. However, another view prevailing in the market is that growth will take off only in the second half of 2010. It is to be noted that on Tuesday Intel Corp. launched new and more powerful server chips. Tristan Gerra, a Robert W. Baird analyst, said, “Intel has the strongest product portfolio in years”.