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Wednesday, January 21, 2009

Tech Roundup – January 21, 2009


Digitimes reports Cypress Semiconductor (CY) is the sole touch screen supplier to the Palm Pre.
DRAMexchange reports flat DRAM contract prices for the second half of January.

ThinkEquity checks with Taiwanese notebook ODMs show units tracking down 20% q/q, in line with their expectations. There have been no further cancellations or pushouts from Dell or Hewlett Packard. Seasonally notebook shipment trends should begin to improve into February and March. Lunar New Year ends February 2nd – business goes dark until then. He reiterates his buy on Intel.

Ericsson 4Q:08 revs and earnings better than expected on spending strength in China and Africa. EBIT margins were 10.5% versus expectations of 9.7%. Stock up ~15% overseas.

Analog Devices preannounced further weakness in their January quarter. The company is now guiding down 25-30%, which is roughly 462-495 mil versus consensus of 518 mil.
The Skew: Incremental channel weakness. Go figure.

UBS does a CIO survey. Spending looks down 4% y/y for 2009 – a month ago it was down 2% y/y. Analyst Heather Bellini reiterates her sells on VMW, CRM and ADBE because virtualization spending will slow (VMW), seat count will shrink (CRM), and CS4 will see delayed adoption (ADBE).

Nanya and Inotera, Micron's partners, reported very poor results. Capex has been cut to the bone for these two. Nanya is running on life support at this point with a mere 120 mil in cash on hand. Taiwan is likely to initiate a bailout shortly. These guys need cash just to pay off their near-term debt obligations, they're not going on a spending spree any time soon. Do not expect capex to come rushing back. Encouragingly for the industry, bit shipment growth for both players dropped significantly – capacity shutdowns are having some real impact. Though contract and spot prices aren't going up presently, they aren't going down either and that's an encouraging sign.

RBC lowers numbers on semicap – overall for the industry he's modeling down 45% now. He's got 6-8 quarters of losses modeled before the industry returns to profits in 2H:10. These are his estimates… and probably represent the lows of consensus.

He thinks Intel (INTC) will switch to Novellus (NVLS) and Applied Materials (AMAT) for their 22nm needs from their current supplier ASM International (ASMI).

The SEC is probing Apple's disclosures around Steve Jobs' health. Let me save you some time, fellas. Their disclosure sucked. Apple protects their CEO from discomfort at all costs, whether he's granting himself retroactive options and they're lying to protect him or he chooses to keep his personal health information private and they back his claims that he's just fine. This issue is incredibly overplayed on the web so I'm just going to leave it alone.


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