Kenanga Research believes that the semiconductor industry will stay resilient with the global sales continuing to show healthy momentum.
SAN FRANCISCO: Chip stocks surged to a record high after comments from Micron Technology Inc. further boosted investors’ confidence that the worst of a profit-draining downturn in semiconductor demand is over.
The Philadelphia semiconductor index rose 3.9 percent to 1,447 at 2:33 p.m. in New York. A close at that level would exceed the previous record high on March 12, 2018. The 30-member industry benchmark has bounced back 35 percent from its December low.
Semiconductor stocks have been rebounding amid predictions from industry executives that the slump in demand that drove last year’s sell off is poised to recede.
Their comeback is outpacing gains for all 11 main sectors in the S&P 500 Index, which is being led by a group of technology stocks that includes a number of semiconductor companies.
Micron, the largest U.S. maker of memory chips, gained 10 percent on Thursday, propelling the industry benchmark back to record levels.
Trading volume surged to almost double the three-month average as investors looked past a less-than-stellar near-term forecast and focused on the promise of a second-half memory market recovery. The rally extended the stock’s post-Christmas advance to 51 percent.
Advanced Micro Devices Inc. has bounced back the most from the depths of last year’s decline, jumping 67 percent.
Programmable logic maker Xilinx Inc. and MKS Instruments, which makes semiconductor manufacturing equipment, rounded out the top three with gains of more than 63 percent. - Bloomberg
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