Analyst raises earnings estimates for many chip vendors

SAN FRANSICO: An analyst has raised the earnings estimates and share price targets for many chip vendors, based on reports of steady improvement in the business trends all through the fourth quarter of 2009.

Craig Berger, an analyst with FBR Capital Markets, has repeated his company’s stand that the current upswing in the chip-making industry is a part of a “super-cycle” that is bound to result in basic good news for chip-stocks through the third quarter of 2010.

In his report, Craig Berger mentioned aspects such as very lean supply chain inventories, less distributor tolerance for double-booking, capacity and head-count cuts made in 2009, attractive stock valuations, improving demand in 2010 in the sectors such as communications and IT.

In his analysis, Craig Berger raised FBR Capital Markets’ share price targets and earnings estimates for LSI Corporation, ON Semiconductor Corporation, Silicon Laboratories Incorporated, and Nvidia Corporation.

In addition, FBR Capital Markets had recently raised estimates on many other companies – including Atmel Corporation, Marvell Technology Group Limited, Maxim Integrated Products Incorporated, National Semiconductor Corporation, International Rectifier Corporation, Broadcom Corporation, Fairchild Semiconductor, and Atheros Communications Incorporated.

According to Craig Berger, production checks in the final fourth-quarter improved, though the production was down slightly while entering the seasonally slower first quarter of the next fiscal.

Productions fell for only 7 of the 13 chip-makers that FBR Capital Markets tracks.