Semi Stocks Continue Rebound as Price Increases Could Be Coming (WDC) (STX) (SNDK)

Select semi stocks (Western Digital (NYSE: WDC), Seagate Technology (Nasdaq: STX), SanDisk (Nasdaq: SNDK)) are bucking the broader trend Tuesday afternoon as investors may be taking notice of recently-increased interest in the specialty DRAM chip sector. An earlier article from Digitimes suggested the price for these chips may soon begin rising.

While this market was oversupplied throughout 2011 as Taiwan-based firms rushed in (thus driving down prices), cut backs in production of 1GB DDR2 chips following widespread flooding in Thailand are now causing demand to overtake supply. In addition, sources cited in the Digitimes article indicated a rebound in 512MB DDR chips could be related to consumer electronics spending which is now slowly rebounding.

While the Semi HOLDRS ETF (NYSE: SMH) is down 0.15 percent at last check, shares of Western Digital are up 2.5 percent, shares of Seagate are up 1.9 percent, and SanDisk shares are up 1.2 percent.

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