Semiconductor Environment Continues to Improve
For the second consecutive month, worldwide sales of semiconductors rose sharply in September, the Semiconductor Industry Association (SIA) reported. Global microchip sales in September were $22.6 billion, an increase of 5.9 percent from September 2006 when sales were $21.3 billion.
5.9% probably doesn’t sound like stellar growth, and it isn’t much special. However, compared to the growth in industry capacity it is strong. And since price is a function of both supply and demand, sales growth that exceeds capacity growth should ultimately have a positive impact on pricing.
Disclosure: William Trent holds long positions in the Semiconductor Holdrs (SMH) and put options related to shares of Lam Research (LRCX).
William Trent currently owns put options against the shares of Lam Research (LRCX).
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