Analyst raises sales estimates for Altera
Dylan McGrath
Programmable Logic DesignLine
(02/18/2010 1:15 AM EST)
SAN FRANCISCO—A technology research firm raised its estimates for Altera Corp.'s 2010 and 2011 revenue, citing expectations of modest market share gains by the company against rivals in the programmable logic space.
Altera (San Jose, Calif.) has picked up two to three points of market share in the programmable logic market over the past five years, according to Ian Ing, an analyst with Broadpoint Amtech. Ing said in a report circulated Wednesday (Feb. 17) that Altera's gains in recent years have largely come at the expense of smaller vendors Lattice Semiconductor Corp., Actel Corp. and QuickLogic Corp., as opposed to market leader Xilinx Inc.
Broadpoint raised Altera's 2010 revenue estimate to $1.57 billion from $1.5 billion. The firm raised its 2011 estimate for Altera revenue to $1.65 billion from $1.53 billion. The new estimates do not clearly point to share shifts over the next two years and are not overly aggressive regarding Altera share gains, consistent with our Broadpoint's belief that share shifts are slow, Ing wrote.
Broadpoint estimated that Altera's long-term programmable logic market share would be between 37 and 40 percent, compared to about 37 percent in 2009. The firm estimates that Xilinx' long-term market share would fall to be between 48 and 51 percent, down from about 52 percent in 2009.
However, Ing said Broadpoint continued to prefer Xilinx to Altera as an investment because of Xilinx' exposure to Long Term Evolution-related backhaul upgrades and initial ramps in developed markets.
Further gains by Lattice against the smaller firms will be more difficult today given Lattice's more competitive roadmap and customer traction, Ing wrote. Broadpoint also believes that programmable logic startups like SiliconBlue Technologies Corp. and Achronix Semiconductor Corp. could begin to generate material revenue, Ing said.
"We would turn more positive on Altera if share shifts occur at a greater magnitude than expected, ASIC replacement occurs faster than expected, or leverage opportunities from further operating expense controls are uncovered," Ing wrote.
BroadPoint maintains a "neutral" rating on Altera's stock and a "buy" rating on Xilinx' stock.
|
