Strong gains for fellow chip designers ARM Holdings and Imagination Technologies were lifting the technology hardware and equipment sector to the top of the pile on Friday.

ARM was given a boost by Jefferies after the broker upgraded the stock from 'hold' to 'buy' and raised its target price from 805p to 1,300p, saying that the business looks well-positioned for the mid-to-long term.

In a research report on Friday, the broker was upbeat about ARM's rising royalty rates, record licensing, upcoming tax benefits and operating expenditure (opex) control and said that the firm's earnings growth - at a three-year compound annual growth rate of 40% - will "continue largely unperturbed through 2013-2016".

Imagination Technologies, which design GPUs (or graphics processing units), was extending gains made earlier in the week when it announced that its hardware would be used in the Samsung Galaxy S4.

The FTSE 250 group confirmed on Tuesday that its PowerVR SGX544MP core is incorporated into Samsung's Exynos 5410 'Octa' chip, used to power the tech giant's new gadget, which was unveiled in New York last night

The stock was given a lift today by Goldman Sachs which upped its target price for the shares from 600p to 700p and kept a 'buy' rating.

Meanwhile, analysts at Investec said that if Samsung were to sell 100m unit in Imagination's next fiscal year (ending April 30th 2014) and 50% of those were shipped on the Octa chip, "this could equate to a £10m of 15% profit upgrade to FY14E on our estimates".

While Investec kept a 'hold' rating for the stock, the broker highlighted: "this means the two dominant smartphones (iPhone and S4) will both be running IMG graphics, reinforcing the competitiveness of the solution."

Elsewhere, IQE, the AIM-listed supplier of technology to the semiconductor industry, was also higher a day after announcing new partnership with Canada's OneChip Photonics that will see the latter use its services to produce InP-based Photonic Integrated Circuits (PICs) for the data centre interconnect and passive optical network markets.



Top performing sectors so far today
Technology Hardware & Equipment 1,142.26 +1.56%
Electronic & Electrical Equipment 4,333.14 +0.97%
Industrial Transportation 2,714.99 +0.54%
Industrial Engineering 10,005.60 +0.44%
General Industrials 3,963.77 +0.37%

Bottom performing sectors so far today
Health Care Equipment & Services 4,150.60 -1.46%
Automobiles & Parts 6,343.17 -1.38%
Banks 5,030.06 -1.33%
Oil & Gas Producers 8,035.35 -1.11%
Fixed Line Telecommunications 3,217.15 -1.10%

BC

Related share prices
ARM Holdings (ARM) share price
Imagination Technologies Group (IMG) share price
IQE (IQE) share price