Chip Stocks Shine on Surge in New Orders

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NEW YORK (TheStreet) -- Semiconductor companies have been the big winners this earnings season, led by Intel , AMD and Cirrus Logic .

Shares of Cirrus Logic jumped 17% today after releasing fiscal fourth-quarter results late Wednesday. Intel, which cruised past Wall Street's estimates last week, has climbed more than 16% this year. AMD, which also beat consensus forecasts last week, has enjoyed even greater growth, surging almost 38% so far in 2012.
Texas Instruments
Texas Instruments is eyeing 2012 growth.

Chip heavyweight Texas Instruments noted an uptick in customer demand during its first-quarter results, also released this week.

"As we came through the quarter, each month we shipped more than the prior month," said Kevin March, Texas Instruments' CFO, during an interview with TheStreet. "We have bottomed, and we're setting the stage for the resumption of growth."

Texas Instruments' new orders increased 13% between the fourth and first quarters, according to the CFO. "We expect that the company will grow this year," he said. "The Americas are doing OK, they are growing; there's still growth in Asia and China."

Although southern Europe is wrestling with overloaded debt, March added that some parts of the region, such as Germany, are doing well.

Texas Instruments is often viewed as a barometer for the strength of the semiconductor market, so March's comments bode well for the entire sector.

There have been, however, positive signs from the silicon market. The Philadelphia Semiconductor Index, which includes the likes of Texas Instruments, Cirrus Logic, Broadcom and Marvell , has gained almost 14% this year, outpacing the S&P 500's rise of 11%.

Semiconductor maker LSI continued the sector's run of strong results after market close Wednesday, beating analysts' quarterly estimates and offering robust guidance.

"There are three or four big trends that are benefitting semis," said Abhi Talwalkar, the LSI CEO, during an interview with TheStreet. "It's smartphone and tablet growth -- the major refresh that will come with ultrabooks and Windows 8 will have a benefit," he said. Increasing demand for Internet wireless infrastructure also helps, according to Talwalkar, as does the expansion of cloud computing and data centers.

Ultrabooks have been championed by Intel, which says that the super-skinny laptops will breathe new life into the moribund PC market.

In particular, the new 22-nanometer Ivy Bridge chip will be a big growth catalyst, according to Stacy Smith, Intel's CFO. "What's exciting about Ivy Bridge is the design win pipeline that we see with our customers," he told TheStreet, during a recent interview. "For ultrabooks, there's over 100 design wins in the pipeline."

Ivy Bridge is already attracting attention for its power efficiency and graphics performance, which will be critical in Intel's battle with rival Nvidia .

"The new graphics capability inherent in Ivy Bridge will satisfy the demands of all but the most extreme users," noted Jack Gold, president and principal analyst at J. Gold Associates, in a note. "Integrated graphics have the ability to reduce cost, power and physical size of systems, especially important in the new age of ultrabooks and other portable devices."

A busy tech earnings season continues next week, with Broadcom reporting its fiscal first-quarter results after the market close Tuesday.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.

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