4 Reasons Chip ETFs Are on the Right Track

The semiconductor industry began to see growth again in the second half of 2009, and analysts predict that things won’t slow down any heading into 2010. That’s good news for ETFs aimed at the sector.

Analysts are calling for the semiconductor industry to have a standout year in 2010. Why?

• Manufacturers have kept supplies low, which is seen as a big positive, says EIN News. Low supplies should drive prices higher.
• PC chip shipments rose in the last quarter of 2009, indicating that the market is on its way back after the recession, reports Sharon Gaudin for Computer World. The research firm IDC reported that worldwide PC microprocessor shipments were up 31.3% in the final 2009 quarter compared to the same period in 2008.
• IDC predicts that shipments this year will rise 15.1% this year compared to last.
• As corporations open up and qualify new client and server platforms and expand their IT budgets, the boost from this and healthy consumer spending should be good news for the semiconductor industry.

• iShares S&P GSTI Semiconductor (NYSEArca: IGW)

• SPDR S&P Semiconductor (NYSEArca: XSD)

• PowerShares Dynamic Semiconductors (NYSEArca: PSI)