Xilinx Inc. (XLNX) is expected to report its second quarter results later today. Last month, the company had upgraded its guidance for the quarter. It expects quarterly sales to be up approximately 10% sequentially due to the broad based strength across all end markets and geographical divisions.

Xilinx expects to ship most of last quarter’s delinquencies in the September quarter. Management reiterated its gross margin guidance of 61%. Operating expenses are estimated to come around $175 million Incorporatedluding $5 million in restructuring charges.

California-based Xilinx designs and manufactures a broad range of high-performance, high-density programmable logic devices (PLDs) for electronic equipment manufacture.

Earlier, rival Altera Corp. (ALTR) reported its quarterly results that matched expectations. Sales of $286.6 million were down 20% from a year ago but up 3% sequentially. Management stated that business conditions improved steadily during the quarter and most markets performed better than expected due to a combination of new program ramps, improved end market demand and an increase in customer orders due to inventory depletion. The world’s largest chipmaker – Intel Corp. (INTC) ? beat Street expectations and stated that demand for PCs has rebounded stupendously.

This signals that the semiconductor sector is all set for a strong recovery in the second half of 2009 after a significant decline in demand and inventory correction in the past twelve months.

It seems Xilinx is poised to benefit from this broad-based growth after ironing out its supply constraints that had led to a revenue decline in the previous quarter. We believe the company’s growth will reaccelerate, given the competitive advantages of the company’s 90-nm and 65-nm technologies as well as the end to the inventory correction in the industry.

We maintain our NEUTRAL rating on the stock.

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