ON Semiconductor Outlook Sparks Sector Rally

ON Semiconductor Corp's ONNN better-than-expected outlook touched off an early rally Friday in the shares of at least several competitors.

The sector has been suffering of late because of profit warnings from Microchip Technology Inc. MCHP Juniper Networks, Inc. JNPR, as well as potentially lower demand from China and Europe.

But Phoenix-based ON on Thursday forecast revenue for the current quarter of $835 million to $875 million, versus the consensus $826 million.

More than 80 percent of that expected fourth-quarter revenue is represented in current backlog, and Chief Executive Keith Jackson added that the company recently "noticed a recovery in orders for shipment in first half of 2015."

ON shares jumped nearly 8 percent around Thursday's market opening, while Fairchild Semiconductor Intl Inc. FCS rose more than 7 percent and Analog Devices, Inc. ADI gained nearly 4 percent.

Its vastly larger competitor Texas Instruments Incorporated TXN picked up more than 4 percent. Atmel Corporation ATML gained 8 percent.

Semtech Corporation SMTC gained more than 4 percent.