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Intel to steer its center of gravity into low-power microprocessors (exclusive)

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Sean Maloney, Intel’s newly appointed president of Intel China, plans to deliver a keynote speech at the Computex trade show in Taiwan next week where he will unveil a heavy-duty effort to steer Intel into the production of low-power microprocessors.

Maloney is expected to say that Intel will accelerate its efforts to make chips that are more appropriate for tablet computers, smartphones, laptops, and low-power desktops. Intel has been doing that for some time. But Maloney, a well-respected executive who recovered from a stroke that kept him sidelined last year, is expected to push that even farther, according to a source familiar with the matter.

This shift within Intel is similar to the shift that occurred when it launched its Centrino laptop processors in 2003 — which Intel referred to as a right-hand turn. This is another right-hand turn, since the current roadmap isn’t as ambitious when it comes to low power consumption.

Most of Intel’s mainstream desktop chips target power consumption of about 40 watts or so. That allows for very fast microprocessor performance, but such a chip generates enough heat that it can’t be so easily used in a laptop and has no chance of making it into a tablet or smartphone. Now, Intel plans to target mainstream chips that consume about 15 watts.

That’s a big difference, but it doesn’t mean Intel will cancel a bunch of chips in development. Rather, the company will modify the roadmap over the next couple of years so that the center of its efforts focuses on 15 watt or lower wattage chips.

The company has already been moving in this direction for a number of years. Intel recently announced a new manufacturing innovation dubbed Tri-Gate transistors that will allow it to use lower power and smaller circuits in its 22 nanometer microprocessors. (Intel’s current Sandy Bridge chips use 32-nanometer manufacturing; the smaller the number, the faster, lower power, and lower cost.)  At its recent annual investor meeting, Intel showed a working 22-nanometer microprocessor code-named Ivy Bridge that is one of the flagship chips for this new low-power strategy. The Tri-Gate transistors take advantage of three dimensions and allow for a 50 percent power reduction at a given level of performance with only a 2 to 3 percent increase in costs. Ivy Bridge will be followed by a chip code-named Haswell that will represent the fruition of Intel’s efforts to reduce the average wattage of its mainstream chips.

Intel is also accelerating development of its lowest-power Atom microprocessors, which are targeted at smartphones, tablets and ultrathin laptops. The Atom chips have been shipping for a number of years, but Intel will turn up the treadmill now. It will shift from 45 nanometer Atom chips this year to 32 nanometer chips and then 22-nanometer chips in 2012. With every manufacturing shift, Intel can make its chips cheaper, faster, smaller and lower power. That pace of innovation is faster than the pace of Moore’s Law (observed in 1965 by Intel chairman emeritus Gordon Moore), which says the number of transistors on a chip doubles every two years.

Intel is also designing a brand new Atom single-chip computer architecture, code-named Silvermont, from the ground up. Those chips are also going to be designed for low power, and the cadence for introducing new chips will become increasingly faster. The 22-nanometer Silvermont chips are expected to be introduced around 2013.

“Intel will completely focus a huge percentage of consumer microprocessors toward mainstream, low-power, ultra-thin, no-compromise computers,” said the source. “The center point of the roadmap will be all about ultra-mobility.”

By the end of 2012, a large percentage of consumer laptops will be in the ultrathin category — think MacBook Air laptops that cost a lot less than they do today and have a lot more performance and all-day battery life. That’s the kind of machine that will use the chips that Intel is placing at the center of its efforts.

Asia is a good place to make the announcement since China is expected to be the largest PC market in the world starting next year. Maloney’s assignment to that region is significant. Maloney was considered the heir apparent to Intel chief executive Paul Otellini. But a stroke threw him off that path. He returned to work in January and is regaining control of his motor skills.

Intel’s Atom processors are beginning to appear in tablet computers and about 10 of them will be shown off at the Computex show in Taiwan.

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Article courtesy of VentureBeat » deals

AAPL: Ticonderoga Says FYQ3 Sales Growth Still Possible

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Ticonderoga Securities analyst Brian White this morning reiterates a Buy rating on Apple (AAPL) shares and a $612 price target, while writing that the company’s sales in April look to have been below the historical trend, but that quarter-on-quarter growth is still possible.

That’s not entirely surprising, he indicates, as Apple forecast the quarter to be down 7%, versus a normal historical trend for sales to be up 5%, quarter to quarter, in fiscal Q3.

The “barometer” he’s compiled of companies that supply Apple out of Taiwan shows Apple sales may have fallen by 7.5%, below an historical average for sales to rise 0.4% from March to April. But given the 35% increase in sales in March for his barometer, versus a 24% average, it’s still possible that the full quarter could rise by the historical 5%, he thinks.

Apple shares today are down 58 cents at $348.87.

Article courtesy of Tech Trader Daily

SanDisk: ThinkEquity Says Buy On NAND Economics, Tech Lead

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ThinkEquity’s Krishna Shankar this morning raised his rating on SanDisk (SNDK) shares to Buy from Hold, arguing that the industry economics for flash memory are “balanced.”

Shankar raised his price target to $60 from $50.

Shankar sees 75% to 80% bit growth for NAND flash in 2011 and 2012, and 30% to 35% decline in average selling price.

Further, Shankar sees Sandisk as having a lead in process technology, with partner Toshiba (TOSBF) at 24 nanometer and with 2 bits to 3 bits per cell, with a further advantage down the road at 19 nanometer with MLC technology.

Helping the company’s market outlook is that “marginal players” in DRAM in Taiwan and Japan have either left the business or consolidated, and that there are not likely to be more “greenfield” DRAM and NAND chip factories until the second half of this year.

Then, too, new devices such as tablet computers, and rapidly expanding product categories such as smartphones, are “voracious” consumers of flash memory.

The company is “among the best-managed semiconductor companies,” he writes.

Shankar is modeling revenue for SanDisk of $5.83 billion and $4.60 in EPS this year, versus the consensus $5.76 billion and $4.42 per share.

SanDisk shares are up 21 cents, or half a point at $47.36.

Article courtesy of Tech Trader Daily

Apple Rumored to Be Slashing CDMA iPhone 4 Production in Half

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Apple (AAPL) may be cutting production of its CDMA iPhone 4 in half, according to insiders at one of the company’s suppliers.

Rumors started this morning that Taiwan supplier Pegatron had been asked to to scale back production of the CDMA phones this year from an anticipated 10 million to 5 million. This would seem to be a bit at odds with Verizon‘s (VZ) estimates, as the company had said it expects to activate 11 million iPhones this year.

No reason was given for the production cut; rather than slack demand, it may instead signal an earlier-than-anticipated switchover to the production of the next generation iPhone (which could also account for Verizon’s estimates, with iPhone 5 sales adding to the year’s total).

Read the original DigiTimes report here and an initial analysis here.

Shares of Apple were off 0.5% in recent trading.

Article courtesy of Tech Trader Daily

Acer: Pushed To Innovate, Says Bloomberg

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Bloomberg’s Mark Lee and Janet Ong this afternoon provide an overview of a week that has seen a 22% drop in Acer‘s (TW.2353) stock price and the departure of CEO Gianfranco Lanci yesterday.

Acer shares traded in Taiwan fell another 5% today to 57.10 New Taiwan dollars. The rout started Monday, following Acer’s disclosure a week ago that Q1 revenue and Q2 unit shipments will be lower than the company had expected.

Lanci made the mistake, as far as the board was concerned, of going after Hewlett-Packard (HPQ) and Dell (DELL) with cheap PCs and Netbooks, rather than target Apple (AAPL) with more innovative products, the authors write.

Acer chairman J.T. Wang will take over CEO duties while the company searches for a replacement.

Lee and Ong cite analysts who say that it will be challenging for the company to overcome its legacy as a low-cost computer maker and innovate, something that is going to drive up R&D expenses.

Article courtesy of Tech Trader Daily

LEDS: Caris Sees Some Risk From LED Pricing

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Caris & Co. analyst Ben Pang today reiterates an “Above Average” rating on shares of Taiwan’s SemiLeds (LEDS), writing that the company will probably meet fiscal Q2 estimates but may offer a “muted” forecast for Q3 based on weak pricing in the LED industry.

Pang thinks LEDS can turn in $11 million in revenue for Q2, roughly in line with the consensus $11.3 million; but Q3‘s forecast could be below his $13 million estimate, as “our checks indicate that backlighting applications are still suffering from oversupply,” and that although that is not SemiLEDs market per se, the company will be exposed to any pricing weakness for LEDs nevertheless.

Longer term, SemiLeds should be “a strong derivative play on the China LED market,” he adds.

Article courtesy of Tech Trader Daily

Amimon raises $15M for wireless home video transfer

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Amimon said today it has raised $15 million in funding for its wireless home networking technology, which is becoming increasingly useful in the age of smartphones and tablets. The investment anticipates a sea of video and other data flowing from one device to another in the homes of the future.

Herzlia, Israel-based Amimon makes semiconductor chips that serve as the brains of wireless home networking equipment, which transfers data at high speeds from one part of a home to another. With the networking gear, consumers can transfer a high-definition video (with a 1080p resolution) from their PC to a TV in another room. Amimon transfers data without compressing it, since compression can lead to errors. Instead, it prioritizes the video data it transfers based on what is significant, such as only transferring the elements that are in motion in a video.

In the future, that networking equipment can take a video from a smartphone and transfer it to a big screen TV. That’s why the company has raised the new round of money. Amimon creates chip sets that use its Wireless Home Digital Interface (WHDI) networking standard, which competes with other rivals such as the Wireless HD technology developed by SiBEAM. Other rivals include Cavium Networks and Intel; the latter is promoting the WiDi technology.

Amimon is in a race to establish its standard against the rivals, who all have varying degrees of data transfer speed. Amimon’s second-generation technology operates in the 5-gigahertz band, transmits data at 3 gigabits per second, and has a range of about 100 feet. It can pierce through walls and is very responsive (less than 1 millisecond delays).

Amimon has sold hundreds of thousands of chips since 2008. The company says it is ramping up production to deliver WHDI chip sets to multiple consumer electronics makers and makers of computer gear. The company says that its WHDI can be designed to fit in a compact space for mobile devices and operate on low power levels. That will enable smartphones, tablets and other devices to transmit video a short distance wirelessly. Users could use “flick to scroll” apps where they use a tablet to control action for game that they view on a TV.

Yoav Nissan-Cohen, chief executive of Amimon, said that WHDI is the only viable option for connecting handheld devices to a TV. The company was founded in 2004 and it has 85 employees.

The company has raised $65 million to date. Existing investors include Argonaut Private Equity, Cedar Fund, Evergreen Venture Partners, Motorola Ventures, STATA Venture Partners, and Walden Israel. New investors include Chicago-based AMITI Ventures and Taiwan-based Hantech International Venture Capital Corp (H&Q Taiwan Co).

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Microsoft Petitions ITC Against Barnes & Noble

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Microsoft (MSFT) this afternoon said it filed complaints with the International Trade Commission and the U.S. District Court of the Western District of Washington alleging patent infringement by Barnes & Noble (BKS) and contract manufacturer Foxconn International, as well as original device maker (ODM) Inventec of Taiwan, as regards their “Android-based e-reader and tablet devices.”

The B&N reference is obviously to the “Nook” e-book reader, while it’s not immediately clear which Foxconn or Inventec efforts infringe.

Microsoft pointed out that it had set up patent licensing with some makers of Android-based devices, including Taiwan’s HTC, covering “a range of functionality embodied in Android devices that are essential to the user experience, including: natural ways of interacting with devices by tabbing through various screens to find the information they need; surfing the Web more quickly, and interacting with documents and e-books.”

Microsoft shares are up 38 cents, or 1.5%, at $25.18.

Article courtesy of Tech Trader Daily

QCOM: Sterne Agee Says Buy On Smartphone Growth

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Shares of Qualcomm (QCOM) are up $2.04, or almost 4%, at $53.74, after Sterne Agee chip analyst Vijay Rakesh today raised his rating on the shares to Buy from Neutral, with a $62 price target, writing that some recent worries, such as Japan, have been blown out of proportion, while the company’s long-term opportunities look attractive.

“While disruptions in the supply chain could create some limited visibility into fiscal Q3 (ending in June), we believe it provides an opportunity with the pullback,” writes Rakesh.

Rakesh thinks investors are “starting to focus on a potential $3.50-4.00 earnings power over the next couple of years.” Rakesh models Qualcomm making $3.05 per share this fiscal year, and $3.37 next year.

Rakesh had been worried that Taiwanese chip maker MediaTek might be poised to take busienss away from Qualcomm, but it now appears MediaTek was actually late to market with chips in China and India, leaving opportunity for Qualcomm.

Further out, Rakesh sees a variety of opportunities for Qualcomm, including the prospect smartphones become 45% of the overall handset market by 2014, up from just 25% today; the possibility Qualcomm’s shares of “Wideband CDMA” smartphone chips for the China market, and among Korean phone makers and at Taiwan’s HTC, rises to 45% to 50% by the end of next year from just 35% now; and what appears to be a favorable reception for the company’s “MSM 8660″ chip.

The iPhone 4 at Verizon Communications (VZ), plus likely buildouts of so-called “Long Term Evolution,” or LTE networks for 4G service this year, and the roll-out of an iPhone 5 from Apple (AAPL) are favorable near-term developments, while an iPhone 6, an iPad 3, and a “4G” model of the iPhone some day are all things to look forward for Qualcomm’s chips, he believes.

Article courtesy of Tech Trader Daily

MU, SNDK: iPad 2 Boosts NAND; ‘Structural Change’ Boosts DRAM

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Sterne Agee chip analyst Vijay Rakesh today reiterates a Buy rating and a $17 price target on shares of Micron Technology (MU), and a Buy rating and a $65 price target on shares of SanDisk (SNDK), writing that “structural changes” are coming to the DRAM chip market and the NAND flash chip market.

On the DRAM side, Micron’s Taiwanese competitors lack the proper immersion technology to shrink DRAM chips, they have “significantly higher cash and fully loaded costs,” and there simply are fewer viable DRAM suppliers, which is prompting PC OEMs to go easy on their pricing demands.

On the last point, Rakesh’s point is that with so few DRAM makers in the business these days, PC OEMs are not looking to drive a hard line on price, because they don’t want to drive anyone out of business, thus creating shortages and driving prices back up.

On the NAND flash side, it’s all about Apple’s (AAPL) iPad 2, and competing tablets, which have “irreversibly” changed the NAND industry.

Some on the Street, writes Rakesh, are worrying about the tablet “correction” that’s been speculated on — a failure of some tablets that could depress NAND shipments and prices.

But Rakesh thinks NAND is “on a much stronger footing with tablets,” both because iPad 2 will be a “winner,” and because tablets are “here to stay”:

The tablet market is an entirely new market for NAND, and with the iPad 2, appears to have gotten a second coming, a resurrection of sorts. [T]here were doubts about what another iPad would do, [but] the launch of the iPad2 laid to rest doubts of it being another Blockbuster. The overarching view in Taiwan is that iPad2 is a runaway winner in 2011. While all competing tablets have been pricing at $700-900, the iPad2 pricing at $499 has been a stunner, leaving the competition with no answer. But we believe the view here is, it is short term, where the other PC- handset OEMs will figure out a Tablet Pricing+Android app strategy and come back into the market. Structurally the Tablet segment is here to stay and will only grow in strength.

Article courtesy of Tech Trader Daily