The Semiconductor Industry Association (SIA) has announced that worldwide chip sales in November advanced 3.7 per cent from October and were 8.5 per cent higher than a year ago at $22.6bn (£14.1bn). This was the first time in 2009 that the monthly sales figure had increased when compared to the previous year. And these positive numbers have prompted analysts to raise confidence on this year's outlook for the chip sector.
UK chip makers such as ARM and Wolfson had already provided encouraging signals to the market on sales and orders by mid 2009, and the news from the SIA supports the possibility of further positive numbers. Nevertheless, these players did also caution that order visibility remained poor.
The end of a lengthy period of destocking had cheered most chip makers by the third quarter of last year. But then new growth emerged from the launch of the Windows 7 operating system in October and this should continue to spur PC sales. Meanwhile, the continued adoption of high-definition television (HDTV) has been good news for set-top-box maker Pace.
However, the real winners will continue to be those companies exposed to smartphones with the overall market here growing 270 per cent year-on-year, and likely to be boosted further by competition between Apple's iPhone, Google's new Nexus-1 and RIM's Blackberry range. This is good news for the likes of CSR which supplies to the 7 largest handset makers.
Technology hardware and equipment
| NAME | TIDM | Price p | Mkt. val £m | PE | Yield % | 1 year perf. % | LAST IC VIEW |
|---|---|---|---|---|---|---|---|
| ARM | ARM | 177.5 | 2279 | 31.9 | 1.3 | 105.2 | Fairly priced, 145p, 7 October 2009 |
| CSR | CSR | 409.1 | 745 | NA | NIL | 141.4 | Fairly priced, 445p, 7 October 2009 |
| IMAGINATION TECHNOLOGIES | IMG | 241 | 578 | 38.9 | NIL | 285.6 | High enough, 224p, 9 Dec 2009 |
| PACE | PIC | 209 | 634 | 16.3 | 0.5 | 281.7 | Buy, 194p, 27 Jul 2009 |
| SPIRENT COMMS | SPT | 102 | 692 | 15.1 | 1.1 | 181.4 | Buy, 92p, 6 Nov 2009 |
