NEW YORK (AP) -- Many chip makers' stocks are poised to rise in the second quarter, said a Citi analyst on Monday, who argued that limited supply reflects a rebound in demand on the part of electronics manufacturers.
Citi analyst Glen Yeung's interviews with almost 20 semiconductor makers including Broadcom Corp. and Qualcomm Inc. suggest that their materials are limited because of an uptick in demand. Chip makers lowered their manufacturing capacity to match lukewarm demand earlier, but now their supply levels are starting to seem limited.
Broadcom, for instance, told Yeung that "it's going to get tight in the second half," even with an average growth rate. Texas Instruments, meanwhile, said "forecast demand from our customers for 2011 outpaces the supply under our current capacity plan."
Micron Technology Inc. said the growing demand for tablet computers such as Apple Inc.'s iPad is reducing its supply of flash memory modules.
All told, Yeung added, semiconductor sales will lean toward the high end of his forecast, which predicts a 7 to 9 percent growth in revenue during 2011.
"Investors are under-estimating the potential for under-supply in 2011," he wrote in a note to clients. "We are incrementally more positive about chip outcomes in 2011 versus 30 days ago."
Advanced Micro Devices Inc. rose 4 cents to $8.44 during Monday morning trading, Broadcom rose 35 cents to $46.17 and Texas Instruments Inc. rose 18 cents to $35.62.
Cypress Semiconductor Corp. rose 23 cents to $23.56, Micron rose 32 cents, or 2.9 percent, to $11.38, Qualcomm rose 4 cents to $55.27, while Nvidia Corp. fell 79 cents, or 3.1 percent, to $24.88.