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Semiconductor stocks and 2011

2010 has been heavy investment year for semiconductor companies in capacity in order to meet increased demand for chips across the globe.

Several semiconductor companies did not believe the economic recovery was real until six months of supply lagging demand. It became too late to increase capacity fast enough to meet demand and allocation became the norm during 2010.

With the capacity increase added in steps during 2010 it should provide increased sales and lower cost during 2011 and 2012.  Return on investment and margins should add to semiconductor companies profits during 2011. We have seen their stock prices hit 52 week high late 2010 in anticipation for better 2011. Is there more room to add to these gains ? I believe so.