After two years of go-go growth in the semiconductor sector as customers restocked lean inventories, the industry is expected to post more modest growth in 2011 as it faces lower average selling prices for chips and the cyclical demand for semiconductors hits a lull.
Among Thursday's top online stories for investors: 12 semiconductor stocks that could really run in 2011; why Facebook won't go public; and how Quora is quickly overtaking twitter.
Actel broadens Microsemi's product line and moves it up the value chain, which means higher margins. In addition, Microsemi has a nice opportunity to leverage its distribution footprint.
Oracle has slapped Micron Technology, Samsung, Hynix, Infineon and other chip-makers with a price-fixing lawsuit, a follow-up to the $173 million antitrust settlement that those companies and others reached with state attorneys generals regarding similar allegations several months back.
Add the $7.7 billion Intel is paying for McAfee to the $3.8 billion loss in the chipmaker's market value after its announcement, and the deal's cost to shareholders is $11.5 billion. But the purchase probably won't drive enough profits to cover that hefty price.
Applied Materials, the world's top semiconductor manufacturing equipment company, reported third quarter results Wednesday, posting earnings and sales that beat analyst estimates. AMAT's outlook also exceeded analyst expectations, so why hasn't the stock reacted much?
Tech stocks are on sale these days, giving buyers a chance to pick up shares at impressive discounts. The sale isn't due entirely to market jitters. A good sex scandal helped to create opportunity as did less-than-rosy earnings forecasts.
While the sector is revving up, the chip and storage segments show the highest gains in revisions to earnings estimates. For instance, since earnings season kicked off, analysts' estimates for chipmakers have risen by 12.5%. Tech investors take note.
Several IPO hopefuls didn't fare well earlier in the year, but private equity investors KKR and Bain Capital feel confident enough about NXP, which they own most of. With the semiconductor business picking up, will investors warm up to NXP?