Patrick,
The most likely reason QCOM took a hit last week wasn't because some Korean vendors are looking to second source their ASICS. QCOM has welcomed and liberally licensed a number of companies to build ASICS, and the "imminent" appearance of said competition has been almost here for years now.
QCOM got knocked because an Everen analyst guessed that handset margins were under some pressure this quarter (well duh... management mentioned it in the latest conference call, due to exploding demand and parts shortages), and everyone and their brother who was either a mo-mo, short term player, or short jumped on the news to drive it down. Once that ball got rolling, and interest rate fears popped a couple times, you're in the $160's.
It's interesting that the same Everen analyst who came out with the "breaking" news had an internet conference call yesterday, in which he said...
-Handset margins aren't the driver. CDMA adoption world wide is.
-YOY growth rates for the Q should average 50% for the next 5 years. (that's not a typo either... and you can start that with $4 in earnings next year, do the math... $4 x 1.5 x 1.5 x 1.5 x 1.5 x 1.5= X, and remember that analysts have been underestimating this company for a while now)
-Nokia is having problems with their CDMA ASICS, including having handsets returned (CDMA ain't as easy as it looks folks, and it doesn't even look easy....)
I do think that LSI and DSP have a good chance at getting some of the ASIC sales, but it's an exploding CDMA pie, and the Q is on their 5th generation chip... plus they make money either way.. check out this post for details... bottom line, second sources won't hurt the Q anytime soon...
Message 11206041
DWB |
