Semiconductors . . . Transmeta said Microsoft has designated the company as a reference design partner for Smart Displays, which are wireless, touch screen monitors used to remotely access Microsoft Windows XP-based PCs.
Zoran was upped to Strong Buy at Adams Harkness. Price target is $32. The upgrade from Buy is based on view that OAKT buy creates a leading multimedia IC supplier that is quickly distancing itself from the field. Believes merger should significantly raise company's longer-term profitability, expand its customer base, and offer substantial new revenue opportunities.
Xilinx analyst meeting provided little new financial information. Focused on the ability for the PLD market to take share from other semiconductor technologies and penetrate new end markets. Also, focused on the Spartan-3 and V-II Pro product families and the process technology that has enabled these devices. Today, introducing a new family RocketPHY, an ASSP transceiver product. Puzzling departure from attractive PLD strategy and may reduce profits. RocketPHY puts XLNX in direct competition with these Applied Micro and PMC Sierra.
MPUs Desktop MPU street pricing for Intel and AMD companies were essentially unchanged last week, with some SKUs even appreciating. On average, AMD parts trade at 15%-25% discount to list, while Intel parts trade at 10%-20% discount to list today. ƒnAnand Chandrasekher, VP, GM, Mobile Platforms Group at Intel presented at the ML Hardware Heaven Conference last week. Anand believes there are approximately 200 million PC systems in need of a replacement. This is due to the fact that the costs of maintaining machines 3-years and older are greater than the costs of purchasing and installing new systems. IT is not tough to buy into this argument since hardware costs represent approximately one-third of total IT spending, while services account for the other two-thirds.
ML also hosted Marty Seyer, VP of the Server Business Segment at AMD. Marty provided results of several performance tests, which places AMD¡¦s Opteron server microprocessor ahead of Intel¡¦s Xeon and on par with Intel¡¦s Itanium. AMD plans to ship Opteron 100 series in CQ2, with Opteron 200 & 800 series becoming available later this year. We believe the Opteron family offers enterprise customers an attractive value proposition, with average pricing in the $250-$450 range.
DRAM Summary
In the spot market, SDRAM decreased 3% to $3.53 and DDR decreased 1% to $3.33 last week, marking the third consecutive week of declines. Contract pricing remain stable in the high $3 (DDR) to high $4 (SDRAM) level. If spot pricing continues to deteriorate, we believe contracts could soon follow suit. The weakness is partially attributable to slower PC demand in China, where SARS is having a noticeable impact on the economy. Hynix¡¦s strategy of channeling more supply to Asia, where the company is free from tariffs is also putting pressure on spot pricing in the region.
Infineon Technologies announced that samples of its 0.11micron 256Mb DRAM part have been approved by Intel. According to management, the move from 0.14 to 0.11-micron process technology increases die output by more than 50% and reduces costs per chip by 30%. Other pioneers of 0.11-micron manufacturing include Samsung Electronics and Micron Technology.
Samsung has the higher number of qualifying DDR400 and DDR333 parts with five approved in each department. Micron and Infineon appear to be numbers two and three respectively, when it comes to readiness to launch DDR400 and DDR333 memory.
Boxmakers . . . Merrill Lynch reiterated their Sell rating on Apple following yesterday's run-up, saying the current weakness in the company's primary markets (especially education and professional) outweighs the likely benefits associated with online music sales. In addition to the weakness in AAPL's primary markets, firm expects operating income to be negative this year, which means that positive net income will come entirely from interest income. Finally, firm says the shares remain expensive on a P/E basis.
The Wall Street Journal reports Dell Computer plans to pay larger cash bonuses to a group of its senior executives due to efforts to push companies to treat stock options as expenses. In addition, the company will be dropping "computer" from its name to Dell as it moves into other technology businesses.
Hewlettt-Packard launched a new strategy centered on Servers and Software. On anniversary of Compaq merger, holding customer/press briefing at 12pm to address Enterprise strategy; will focus on strategy to drive revenue growth with key parts of cost cutting largely behind. Central element is previously discussed HP Adaptive Infrastructure (or HP Utility Data Center/UDC). UDC has proven installations and is leveraged by HP's strengths in Open View in network/systems management arena. This is a now densely populated market (IBM, Sun N1; more recently software vendors entries from CA, Veritas, etc.) and it may be difficult to achieve meaningful differentiation.
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