Posts for Ticker ‘QI’

AmTech Notes PC Seasonality & Memory Oversupply (INTC, AMD, NVDA, MU, QI)

Doug Freedman at American Technology Research has issued a call in the PC and memory sector this morning.  The firm notes that the March quarter is tracking in-line with normal seasonality for most parts of the technology and hardware supply chain.

Channel checks suggest that Intel (NASDAQ: INTC) server parts are being well-received and selling well into a market absent a competitive part.  AmTech also noted that continued upside to dual processor configurations have been cited.  Intel may have offset strong high-end server and notebook sales with a slightly more aggressive promotion in retail.  As far as Advanced Micro Devices (NYSE: AMD), the ATI data points are tracking positive, in-line with expectations, with AMD chipsets and drivers for ATI cards gaining traction with low-end enthusiasts and more mainstream markets.

Freedman also noted that notebook checks are in-line with expectations and seasonality for the most part. The first half of March DRAM pricing continued to show strength, and AmTech expects a downturn in second-half contract pricing in-line with the recent trend in spot prices and continued pressure on NAND ASPs.

While some channel checks have reported weakening consumer demand, AmTech noted that it cannot say it is outside of normal buying patterns.  It also noted that large OEMs have gained against smaller tier two and tier three suppliers.

Freedman notes, "While general sentiment has been negative, not-withstanding this week’s rally, we believe the market normally misinterprets seasonally weak periods as evidence of protracted downturns. We do not see evidence to support this thesis yet with generally healthy channel inventories supporting distributor flexibility and re-order rates."

American Tecnology Research has reiterated its BUY ratings on Intel (NASDAQ: INTC), Advanced Micro Devices (NYSE: AMD) and on Micron Tech (NYSE: MU).  It is also maintaining its NEUTRAL ratings on both NVIDIA (NASDAQ: NVDA) and Qimonda AG (NYSE: QI).

Jon C. Ogg
March 13, 2008

Posted on: March 13, 2008 – 9:05 am in Analyst Calls, PC Companies, Semiconductor, , , , ,

Could Qimonda Be Acquired? (QI, MU, RMBS)

There is an interesting research note out of American Technology Research that questions whether or not Qimonda AG (NYSE: QI) could be a takeover candidate.  Since its first quarter earnings, shares are up some 50%, and AmTech believes shares have rallied on speculation the company will be acquired by a competitor.  At current prices it trades at 0.88-times book value and 1.4-times AmTech’s end of year book value estimate. 

This notes that out of the DRAM manufacturers, Micron (NYSE: MU) is the only company that would consider acquiring it.  This also notes that a non-US company would face ‘tremendous’ scrutiny from our government.  AmTech notes that this would also potentially free up Micron from its Rambus (NASDAQ: RMBS) battle over intellectual property as Qimonda has an existing license agreement with Rambus.  Another point is that would allow Micron to build market share, remove a competitor, and have scaling advantages in a DRAM upswing.  Its specialty segment commands a leading market share that would allow Micron to market itself and offset margin declines in commodity DRAM.

AmTech notes that it does not have any specific information on any transaction.  But it also notes that Qimonda likely can’t raise funds without massive dilution. 

  • AmTech noted: "We believe both companies have chatted in the past about a possible deal and that Micron has scrubbed the deal as well as other memory manufacturers given its positive cash balance and need to get bigger to scale its above industry expense ratios."

AmTech noted that Qimonda’s financial situation will continue to deteriorate with cash burn rates being a key concern.  AmTech maintains its NEUTRAL rating as absent a takeover bid.  Its target price is raised to $6.00 from $5.00.  Shares of Qimonda closed at $7.34 yesterday and are down almost 3% right after the open this morning.  Its 52-week trading range is $3.51 to $17.29, and it traded even higher than that in 2006 after coming public.

247WallSt.com hasn’t pondered a deal of this magnitude.  Micron has many of its own issues to fix.  With a market cap of almost $2.5 Billion, a deal of this size might take up most of the liquidity that Micron needs to survive on its current path.  We have noted on our own how the turnaround at Micron seems like it just won’t turn. We have also noted on our own how Micron needs to explore its own initiatives, or at least for units.

Jon C. Ogg
February 5, 2008

Posted on: February 5, 2008 – 9:58 am in Analyst Calls, Mergers and Buy Outs, Semiconductor, , ,

The 52-Week Low Club (PALM) (MOT)

Palm (PALM) Already weak company in the same sector as iPhone, Dragged down by bad news from Apple (AAPL). Falls to $4.25 from 52-week high of $19.50.

Human Genome Sciences (HGSI) Clinical trials set-back. Falls to $5.22 from 52-week high of $12.12.

Ciena (CIEN) Market does not like latest acquisition. Trades off to $21.40 from 52-week high of $49.55.

Motorola (MOT) Just when no one thought it could get worse. Shares drop to $9.43 from 52-week high of $19.98.

Qimonda Ag (QI) Weak results and downgrades for semiconductor company. Falls off to $3.51 from 52-week high of $17.29.

Douglas A. McIntyre

Posted on: January 23, 2008 – 4:01 pm in HI/LOW, , , , , ,