Sector Snap: Chip makers waver after sales report

In a statement, Semiconductor Industry Association President George Scalise called the sales growth "healthy." He said that the increase was helped by strong consumer electronics sales, which may have benefited from the arrival of tax rebate checks.

In afternoon trading, the Philadelphia Semiconductor Sector index was up .32 to 369.42.

Posting some of the biggest gains among chip stocks were makers of semiconductor equipment. Chip testing equipment company Teradyne Inc. climbed 51 cents, or 4.7 percent, to $11.22 after a Piper Jaffray analyst raised his rating to "Buy" from "Neutral."

Analyst Auguste P. Richard also lifted his share price target to $16 from $14, saying the company should benefit from new products in 2009.

Elsewhere, KLA-Tencor Corp. climbed $1.26, or 3.2 percent, to $40.97 after the chip equipment maker authorized a program to repurchase 15 million shares.

Shares of flash memory producers SanDisk Corp., Micron Technology Inc. and Qimonda AG sank.

The SIA said that excluding memory products, chip sales were up 12.3 percent in May. Memory chips have suffered from pricing weakness over the past year.

SanDisk slipped 55 cents, or 2.9 percent, to $18.67, while Micron lost 13 cents, or 2.1 percent, to $5.97. American Depositary Shares of Germany-based Qimonda fell 12 cents, or 4.7 percent, to $2.45.

Some other notable movers among chip companies included microprocessor maker Advanced Micro Devices Inc.--down 21 cents, or 3.5 percent, to $5.74--and graphics chip manufacturer Nvidia Corp., which fell 62 cents, or 3.2 percent, to $18.66.