Semiconductors . . . Pixelworks (maker of integrated circuits for computer displays) agreed to buy Genesis Microchip for about $600 million.
Advanced Micro Devices headcount dropped 5 percent to 12,146 at the end of February from the 12,182 workers the chipmaker employed at the end of the fourth quarter, in December. The disclosure was made in AMD's annual report filed late Friday with the SEC.
Texas Instruments reaffirmed their 1st quarter outlook in today's 8-K of sequentially flat sales and EPS of $0.06, plus or minus a few cents. TI will be introducing a new technology for handheld computers entitled WANDA, which means Wireless Any Network Digital Assistant. The significance of this technology can be found in its ability to integrate handheld device multi-functionality, which includes cell phone calls, accessing a WiFi network, and connection to Bluetooth via the headset. By introducing this new technology, the co is attempting to stay ahead of its closest rival Intel and remain the wireless chip leader.
Ericsson, the maker of cellular networks, agreed to pay $34 million to InterDigital Communications (chips for wireless Internet access) to settle a patent infringement lawsuit by InterDigital. InterDigital Communications inked royalty-bearing licensing agreements with Ericsson and Sony Ericsson for sales of terminal units and wireless infrastructure products compliant with 2G and 2.5G standards. InterDigital also said the agreements establish financial terms for the royalty obligations of Nokia and Samsung under the 'most favored licensee' provision of their respective existing licensing deals.
Jonathan Joseph at Salomon Smith Barney lowered his earnings estimates for Micron Technology on the belief that overall demand in the DRAM (dynamic random access memory) market will remain "pretty weak." He cut his estimate to 42 cents a share from 50 cents in the fiscal second quarter, to $1.67 from $1.75 in the third quarter, and to 30 cents from 60 cents in the fourth quarter. Joseph also cut his assumption for average selling prices to $4.30 from $4.75.
Analysts are lowering forecast for Micron's February 2003 quarter (2nd quarter) from revenues of $794 million and EPS of -$0.27 to revenues of $727 million and EPS of -$0.46. Units will increase 3% to 146 million 256Mb equivalents and blended ASPs will increase 3% to $4.78. Micron is scheduled to report 2nd quarter results next Thursday, March 20th. Due to the weakness in DDR demand, we believe the company will take writedown that essentially offset the expected $96 million in benefits from the sale of previous reserves. The absence of these benefits alone drops 2nd quarter EPS estimate by $0.13. Micron is well positioned to participate in the industry transition from DDR-266MHz to DDR-333MHz memory, in our view. Over 60% of Micron's capacity is at 0.13micron or below. Advanced manufacturing is critical in producing 333MHz parts at high yields. At $7.74, Micron is trading at 0.8x book value, which is below the company's ten-year historical low of 1.1x reached in 1992. The industry is now past the low-point of PC seasonality and we expect DRAM pricing to stabilize or improve from current levels (~$4 per 256Mb equivalent).
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