CHICAGO, April 21, 2011 /PRNewswire/ -- Today, Zacks
Equity Research discusses the Semiconductor Industry, including
ARM Holdings (Nasdaq: ARMH), Intel (Nasdaq: INTC),
Advanced Micro Devices (NYSE: AMD), Texas Instruments
(NYSE: TXN) and Analog Devices (NYSE: ADI).
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A synopsis of today's Industry Outlook is presented below. The
full article can be read at
http://www.zacks.com/stock/news/51665/Semiconductor+Industry+Outlook+-+Apr.+2011
Manufacturing digital ICs is expensive, as it requires
state-of-the-art technology and processes. On the other hand,
digital products are cheaper, so cost recovery is more difficult.
This has led to specialization in the industry and a greater
contribution from Asian manufacturers. However, a significant
portion of the intellectual property remains with the domestic
companies.
One of the primary beneficiaries of the growth in mobile phones,
tablets and the like is ARM Holdings (Nasdaq: ARMH), with
its power-efficient low-performance chip architecture that
dominates the growing mobile phone and tablet markets. Others would
be Qualcomm, Samsung and Texas Instruments. As such, we remain
relatively positive about these companies in 2011.
We are also optimistic about Intel (Nasdaq: INTC) and
Advanced Micro Devices (NYSE: AMD), given their focus on the
data center segment. Although we are a wee bit cautious on Intel's
other growth initiatives and believe that execution will be key to
delivering on its plans with the two big acquisitions, the
company's market position, cash balance, technology lead and
management strategy and execution are positives in our opinion.
AMD is also worth watching, as management has been delivering on
its promises. Moreover, the company is seeing some real success in
its graphics business, which should complement initiatives targeted
at rationalizing its debt, increasing focus on R&D and
operation of a lower-cost model.
The analog and mixed-signal market is dependent on innovation.
Consequently, these products generate higher margins than digital
products. They are also more customized and have longer life
cycles. These advantages are not lost on U.S. players, so the
number of companies entering the market is on the rise.
Our favorites in this area include Texas Instruments
(NYSE: TXN) and Analog Devices (NYSE: ADI).
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