Talking Tech Trades


The fortunes of the semiconductor industry might not be terribly promising. But should you get out of tech all together?

The hard hit chip industry issued a new report on Wednesday and it doesn’t bode well for tech investors.

They say global semiconductor sales will fall in 2009, the first decline in eight years, as the financial crisis takes its toll on consumer spending.

The Semiconductor Industry Association President George Scalise said on a conference call the industry was in an "unprecedented era" that lacked the virility of more normal times.

Sounds gloomy. But not everyone on Wall Street is down beat.

Kim Caughey, portfolio manager at Fort Pitt Capital Group has a much more positive outlook. She tells Maria Bartiromo, “I think people will continue to spend money on electronics. It’s still an important category. Most people would rather get a gadget than another sweater for Christmas.”

"If you’re looking for a play, I like software companies such as IBM and Microsoft because they receive incremental payments from their licensing agreements."

The key is to be focused on the blue chip big cap tech names according to Mike Burnick, director of research at Weiss Capital Management.

He tells us, “Intel is a favorite stock of mine as well as IBM. These companies are more fueled by business spending than they are the consumer.”

“(But) I’d be cautious of cell phone makers such as Apple, RIMM and Nokia which depend on consumer sales. We’re in a consumer recession and companies that relay on consumer buying will probably experience weakness."

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