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Canaccord Genuity CES Semiconductor Review: Few Clear Catalysts (ATML, DDD, IDTI, INTC, NVDA)

January 17, 2012 10:23 AM EST
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Canaccord Genuity CES Semiconductor Review: Few Clear Catalysts (ATML,DDD,IDTI,INTC,NVDA)

Tech Analyst, Bobby Burleson summarized takeaways from the CES:

Atmel Corporation (Nasdaq: ATML)(BUY, PT $11): While we see several positive catalysts for Atmel this year due to NVDA’s Direct Touch announcement, attention at CES was diverted away from the company’s new products and toward potential competition from apps processors. In our view, Direct Touch doesn't eliminate need for maXTouch or other stand-alone touch controller solutions. . . Nevertheless, several positive near-term catalysts could move shares higher, including the end of a transition to single chip for tablets, the conclusion of inventory digestion at key touch customers, and a ramp of new customer designs around Mobile World Congress late February (including Chinese customers).

3D Systems Corporation (NYSE: DDD)(BUY, PT $22): 3D Systems made a strong debut at CES last week, introducing The Cube (consumer 3D printer) and Cubify.com (apps ecosystem for 3D content). In our view, CES successfully builds on DDD’s analyst day last May, where the company first announced its consumer growth initiative. In keeping with the original plan, Cubify.com revenue sources will derive from an ecosystem that includes uploaded 3D content and apps for sale, and downloaded content and apps for use, while leveraging DDD’s online printing services or a personal printer.

Integrated Device Technology (Nasdaq: IDTI)(BUY, PT $7): While power management solutions were the company’s focus during CES, we view the Q1 ramp of Intel’s Romley as the key H1 driver for IDTI. IDTI’s high share in server memory interface should offset some of the macro weakness likely to be experienced by the group in CQ1. . . We see opportunities for new power management solutions, including PMIC, although these are likely to impact H2. Other verticals appear more challenging near term, in line with our expectation for additional estimate reductions across the semiconductor sector in CQ1.

Intel Corporation (Nasdaq: INTC)(HOLD, PT $24): Ultrabooks were one of the more prolific product categories at this year’s CES. Nevertheless, we believe they are unlikely to achieve mainstream adoption until hitting $599-799 price points. With the ramp of Ivy Bridge and lower pricing by Intel, this may be possible by H2 when Win 8 should also factor into stimulating demand.

NVIDIA Corporation (Nasdaq: NVDA)(HOLD, PT $15): NVDA has optimized Tegra3 from a performance and system cost perspective, improving video quality and response time for touch. In our view, Direct Touch is unlikely, however, to lower the cost of touch. The greatest cost savings have come from Atmel’s integration of multi-controller solutions into single chip last quarter.


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