Rob Black's Technology Stock Report: (T, STX, VZ, CSCO, TWX)

Global sales of semiconductors may rise 9.8 percent this year, more than previously forecast, as demand rises for computers and mobile phones, the Semiconductor Industry Association said. Sales of microchips, the brain of electronic devices, may climb to about $249.6 billion from $227.5 billion in 2005. The group in February forecast a 7.9 percent gain to about $245 billion. Consumers in the U.S. and Europe are clamoring for the latest mobile phones that surf the Internet and play videos, while demand is rising for cheaper devices in emerging markets such as India and China.

Seagate (STX) plans to unveil a slate of new disk drives today that will maintain the company's cutting edge. The new products touch almost every segment of the $30 billion disk drive market, from drives for handhelds and gaming systems to enterprise storage systems for big businesses.

RBC Capital provides an update on the telecom sector from Globalcomm in Chicago, which wraps up tomorrow. The general sense from the convention is that telecom demand seems good but not great, with summer seasonality creeping up in some discussions. Although several large network upgrades have already been announced, most agree it is still early for IPTV spending. AT&T (T) appears to be on target with their fiber deployment related to its Lightspeed roll out. However, we are hearing anecdotally that AT&T may have experienced some Ethernet scaling issues. Additionally, it remains unclear what BellSouth's network will look like after the acquisition.

Verizon (VZ) may have placed a looming September deadline for its router vendor Juniper (JNPR) to meet specific performance milestones. Cisco (CSCO) may have displaced Alcatel (ALA) at France Telecom for certain routing upgrades. An architectural battle between Cisco, Alcatel, Redback (RBAK) and Juniper appears to be in full-swing. Although demand is improving, the overall telecom industry may see a slower than expected recovery in operating margins.

AOL (TWX) is preparing to enter the security fray with a new software bundle that it plans to market to the general public, not just its subscribers. The software is dubbed "Total Care" and will include security and PC care features, matching Microsoft's (MSFT) recently launched Windows Live OneCare product and upcoming products from Symantec (SYMC) and McAfee (MFE).

Credit Suisse says their Asian team checks in the supply chain indicate an increasing possibility that Dell (DELL) could be launching AMD based desktop PCs by early 4th quarter 2006, ahead of their expectations of a mid-2007 ramp.