Chip sector jumps on strong Intel report.

HELSINKI/LONDON (Reuters) - Shares in
semiconductor companies jumped on Friday in
Japan and Europe after strong earnings report
from sector bellwether Intel, the world's largest
chipmaker, defied a slowdown in PC sales.
Shares in British chip designer ARM jumped 10
percent to a 10-year high, while the wider
European technology sector was up 0.5 percent
by 3:50 a.m. ET.
U.S. group Intel, whose microprocessors are the
brains in the bulk of the world's PCs, posted
market-beating revenue and margins for the
fourth quarter, and also gave a rosy outlook for
early 2011 overnight.
"The expectations regarding the results of the
semiconductor giant Intel were not really low
but Intel could overdeliver again," Close Brothers
Seydler strategist Roger Peeters said.
Earlier this week, research firm IDC said weak
consumer demand coupled with a surge of
tablet market capped the growth in global
personal computer shipments at 3 percent in the
fourth quarter.
RBS Capital Markets analyst Nick Hyslop said
Intel's guidance was very strong for first quarter
and the company did slightly better than
expected in the fourth quarter, given a growing
perception that Intel's position in tablets was
weak.
"People were relieved from an Intel standpoint,"
he said, adding a good first quarter for Intel
implied a good performance from ARM "given
that ARM is doing all the tablets."
Intel was the first major technology company to
report fourth-quarter results, and its upbeat
numbers set a positive tone for the rest of the
sector.
"Intel's good comments on server sales, coupled
with the positive SAP statement late yesterday,
indicate that corporations investment activity has
been good in the fourth quarter," Pohjola Bank
analyst Hannu Rauhala said.
German group SAP, Europe's biggest software
maker, said on Thursday software sales jumped
about a third in the fourth quarter.
In Japan, Tokyo Electron rose 2.8 percent to
5,530 yen, Sumco added 2 percent to 1,266 yen,
and Nikon Corp gained 0.7 percent to 1,875 yen.
Dutch semiconductor equipment vendors ASML
and ASMI rose 2.6 percent and 3.4 percent
respectively.

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