SOURCE: Rothman Research

Rothman Research

April 07, 2010 08:50 ET

What's Brewing in the Semiconductor Space

JOHANNESBURG, SOUTH AFRICA--(Marketwire - April 7, 2010) - www.rothmanresearch.com - With signs of recovery budding here and there throughout the economy, experts in the semiconductor space are looking at a potential industry growth in 2010 as a viable reality. Monday saw a few semiconductor stocks in the green as news of enhanced YOY February sales for the industry hit the pressrooms. The report released by Semiconductor Industry Association (SIA) depicts a surge of 56.2% in global semiconductor sales for February 2010 as compared to the same time period last year. The news sent shares of Xilinx Inc. (NASDAQ: XLNX), amongst others, in bullish territory, and created leverage as the company released corporate development yesterday concerning its role in the launch of the world's most power-efficient supercomputer, QPACE. 

*Direct & free downloadable report on Xilinx Inc. is available by signing up now at http://www.rothmanresearch.com/article/xlnx/23395/Apr-07-2010.html  

The surge in sales for both January and February has been mainly guided by an increase in demand for electronic goods in markets like India and China. "This trend could be ubiquitous throughout 2010 with emerging markets taking the lead for PC and cell phone demands," commented Mathew Collier of www.rothmanresearch.com, "Another industry that has growth potential this year is the telecommunication industry which also felt the brunt of the economic downturn those past years. Many believe the telecoms will make a smashing re-entry this year... And where this become interesting is that growth in the telecos will overlap with growth in the specialized semiconductor industry where company like Oclaro Inc. (NASDAQ: OCLR) have a lot to gain." 

*Complimentary downloadable research on Oclaro Inc. is accessible upon registration at http://www.rothmanresearch.com/article/oclr/23396/Apr-07-2010.html  

One of the driving forces behind semiconductor success is the perpetual need for new technology; better and smaller. This always keeps the semiconductor industry in an innovative mindset, but it also comes with a heavy price. In recent years, manufacturing cost has soared to an extreme and this has impacted on new entrants to this space as it restricts their ability to compete efficiently. The industry has to face many challenges (some of which are inherent to the space) in coming years as the thirst for new technology spread to the emerging economies and some of these challenges pause severe doubts on mid to long-term growth rate. 

*www.rothmanresearch.com is a source for investors seeking free information on the semiconductor industry; investors are encouraged to sign up for free at http://www.rothmanresearch.com/index.php?id=6&name=Register.

One thing that semiconductor traders must bear in mind is that semiconductor plays are extremely cyclical and this makes it difficult for many companies to deliver on time when demand is there. There are hopeful signs that the semiconductor industry is entering a positive phase in 2010, but at this stage investors in this sphere need to maintain a guarded sanguinity. 

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