Chips: JP Morgan Sees Favorable Widening of Lead Times

JP Morgan chip analyst Christopher Danely this morning writes that bookings and backlog are both “on the rise” for semiconductor firms, based on his “channel checks,” which should be good for the group, especially those he rates Overweight, which include Texas Instruments (TXN), Xilinx (XLNX), ON Semiconductor (ONNN), and Analog Devices (ADI).

The auto market is the strongest market for chips, based on his checks, while the industrial and PC markets are improving, he writes.

“Our checks also indicate lead times should extend over the summer if business conditions continue to improve�a positive catalyst for semiconductor stocks,” he writes.

Altera’s (ALTR) business may not be as strong as Xilinx’s, he writes, given that the Asian market for chips within the telecom sector appears to be the weakest geographic region within a telecom market that is weak overall:

Aside from the Apple and Samsung food chain, demand from the wireless handset end market appears weak. The wired and wireless telecom end market appears to be the weakest. Within telecom, North America appears to be recovering while Asia appears to be the weakest.

Semiconductor stocks are broadly lower today, with TI shares down 40 cents, or 1%, at $32.42, Altera off 44 cents, or 1%, at $36.74, ON Semi down 18 cents, or 2%, at $8.56, Xilinx off 62 cents, or 1.7%, at $35.86, and Analog Devices down 39 cents, or 1%, at $38.27.

Fin