Semiconductor Sales Report Par For the Course
According to the Semiconductor Industry Association, worldwide sales of semiconductors increased in July, growing to $20.6 billion, an increase of 2.2 percent over July 2006. This is pretty much in line with the average year/year growth so far in 2007. This is the predictable result of excess semiconductor equipment orders in 2006.
Well, semiconductor equipment orders were down 17% in July. That means that semiconductor demand growth is nearly 20 percentage points higher than expected growth in supply. On average, those conditions have led to strong returns for the SOX index. Subscribers can download my model for more information.
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Disclosure: William Trent has a long position in SMH.
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