Winners & Losers
IBM, Chartered and Samsung, the founding fathers of the Common Platform for developing chips across multiple foundries, have begun churning out 90nm cellular phone chips for Qualcomm. That’s in addition to IBM’s win of the big three gaming platforms. Now all they need is Apple to return to the fold. (Don’t hold your breath on that one.)
The EDA community seems to be benefiting handsomely from new design activity. Cadence’s revenue for the quarter is up 9 percent year over year, while net income doubled. But why the discrepancy? Could it be that profits last year weren’t so hot? Nor was Cadence alone in that kind of new math. Mentor Graphics’net income was up nearly 16 times what it was in the same quarter in 2005.
Texas Instruments, meanwhile, turned in one of its best quarters ever, knocking the revenue bar up to $3.76 billion. That’s an awful lot of chips.
Linear Technology has always been at the top of the class when it comes to profitability. In fact, the company’s whole product portfolio is predicated on high profits. So why doesn’t the stock market reward Linear? And why are private equity firms lurking around the gates looking for a way into the citadel?
Capital expenditures are looking like a mixed bag. TSMC expects to increase spending by 20 percent next year. STMicro will cut its spending by $200 million. That’s still a net positive between the two companies, but it raises questions about who’s doing well in what markets.
eSilicon seems to be heading for an IPO next year. It’s about time someone is thinking about going public as an exit strategy. The only exit strategy we’ve seen lately is public companies going private. There’s something definitely wrong with that picture.
The price tag for Sony’s battery replacement could be $431 million. That’s a lot of batteries—roughly 9.6 million of them. Does anyone else make laptop batteries these days? Is the supply chain that fragile?
TSMC and UMC both predicted a weaker Q4 due to an inventory correction. At fault is a global slowdown in PC sales coupled with a slump in demand for second-tier cell phones in China. The good news is that most of the inventory is burned off. The bad news is that it will take another quarter before the foundries recover.
KLA-Tencor would have reported sales are up, but it’s stuck doing some serious internal math due to backdated stock options. That’s a little like misplacing a decimal point.
AMD and Intel have made great strides in the processor world. The problem is that they haven’t figured out how to play nice in the outside world. Does the concept of a price war evoke some ugly memories?
BenQ, the Taiwanese consumer electronics giant, lost nearly $600 million and plans to sell its non-core assets. This used to be someone else’s problem, but that’s not the case in a global market. Just ask Infineon, which is blaming 400 job cuts and $100 million in lost revenue on its former customer, BenQ Mobile.