Semi Stocks Perk Up On Integrated Silicon Guidance (ISSI, RMTR, SNDK, AAPL, STEC, EMC, TQNT, IFNNY, TSEM, INTC)

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• Popular long ideas: SNDK, MU, RMBS
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These companies make the actual memory chips used in a variety of data storage devices and solutions

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Avg. Market Cap:	$5.4B
Avg. P/E Ratio:	25.9
Avg. Div Yield:	0.0%

Various segments of the semiconductor industry were ahead on Tuesday with small-cap memory chip player Integrated Silicon (ISSI) leading the way.

Integrated Silicon shares are surging by 20% today after the company guided higher for the current quarter ended March 31. Revenue is now expected to be between $54 million and $56 million compared to the previously forecasted range of $48 million to $52 million. Meanwhile, the company also said its gross margin should be between 34% and 38% for the period, better than prior expectations of between 28% and 32%. All that translates to more than double the previous EPS guidance, which now comes in at between 20 cents and 24 cents per share. Integrated Silicon CEO Scott Howarth said, “Demand in all of our markets has further strengthened in the March quarter exceeding our original expectations as the DRAM market continues to experience increasing demand while DRAM supplies remain constrained,” in a statement.

As a whole, the Memory Chip Stocks Index is up by 2.7% today. It is now outperforming the S&P 500 by 6% over the last month on big gains from Colorado Springs-based Ramtron International (RMTR) and heavyweight player SanDisk (SNDK).

SanDisk is up for its second straight session after Think Equity increased expectations for the company’s first-quarter EPS to 58 cents from 53 cents. Beyond Q1, the analyst noted that cost advantages and increasing output could provide “continued gross margin tailwinds” into the second quarter amid stable NAND pricing in the early stages of Apple (AAPL) iPad production.

Meanwhile, solid-state memory pure-play STEC (STEC) is also advancing for its second straight session. Investors who bought in on the company’s latest guidance are sitting on profits after the stock quickly erased a -20% single-session slide. Shares are now ahead of price targets issued by Deutsche Bank and Northland Securities on the first trading day after STEC announced that its first-quarter performance would be well below The Street’s expectations, thanks in part to a continued inventory overhang at key customer EMC (EMC). Since then Barron’s “Tech Trader Daily” blogger Eric Savitz noted that EMC has started shopping for a second solid-state drive supplier, and that it might look for a third. STEC remains a laggard in the Data Storage Stocks Index over the last month.

Elsewhere in the semiconductor space, TriQuint (TQNT), Infineon Technologies (OTC: IFNNY), and Tower Semiconductor (TSEM) are all helping their respective sub-sector Indexes higher for the session with more than 3% gains. Intel (INTC), meanwhile, is a top performer in the Dow 30, up by 1%.

As of this writing, the Digital Semiconductor Stocks Index is one of the top-15 performing tickerspy Indexes over the last month, up by 15%.

Tags: AAPL, EMC, IFNNY, INTC, ISSI, RMTR, SNDK, STEC, TQNT, TSEM