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News and New Products
Winners & Losers
By Ed Sperling -- Electronic News, 4/28/2006
Who’s Up?
It must be something in the water. Nearly everyone in the electronics industry is doing well these days.
Take Xilinx, for example. It raised its dividend and reported that sales increased 18 percent for new products. Wall Street certainly liked it. Xilinx stock closed $1.67 higher per share. Talk about winning strategies … that one certainly worked.
That was only outdone by TSMC, which posted revenue gains of 40 percent, year-over-year, and profit gains of 94 percent. Reading between the lines, that also means new products. Some 49 percent of the company’s output last quarter was at 130 nanometers and below.
ASE, which provides packaging and testing services, was up 39 percent year-over-year, with net income emerging from negative turf well into the positive. Considering how tough the test companies have had it lately, this is a sign that things have really turned around. The story was much the same at STATS ChipPAC, where revenue was up 65 percent.EDA, which has been flat as a pancake of late, began exhibiting signs of growth. Cadence was up 12 percent. Mentor Graphics grew 7 percent on the top line, but its bookings were up 55 percent to near-record levels.
Microcontroller giant Microchip had a banner quarter, breaking all records—again. Wafer supplier MEMC also had a record quarter. And Wolfson profits were up 210 percent. No, that’s not a mistake.
More marginally, Amkor swung into positive turf while Atmel crept upward in the single-digit range. And ST was down from last quarter, but that’s not exactly evidence of a problem. The company’s profit was way, way up on a year-over year basis. It’s hard to call it a bad quarter when you turn in net income of $132 million on sales of $2.36 billion.
Who’s Down?
The folks over at Hynix must think they’re stuck in a recurring nightmare. Rambus pummeled them in court on patent infringement, walking off with $306.5 million in damages. Considering Rambus spent $30 million last year in legal fees, though, and has been plowing huge amounts into legal costs for the past six years, the win wasn’t quite as satisfying for them, either.
When you hear the name Vitesse, think finesse. The communications chip company issued a statement saying its last three years of financial statements “may not be accurate.” Now comes word the board of directors has started an internal investigation into past stock options grants and accounts receivables and that an interim CFO has been named. You can bet this one isn’t going to end happily for some people.
Sales were up at UMC, but profits were down. Considering what happened over at rival TSMC, it looks doubly bad. UMC blamed a seasonal order adjustment by several customers. That’s what happens when you rely too heavily on one sector, particularly PCs.
That same problem was echoed in another big story. Intel is about to embark on a major restructuring, with plans to trim $1 billion from its operating budget. Whether this is negative or positive is uncertain, but it speaks volumes about the PC business, which has been Intel’s foundation for nearly two decades.
Sun’s Scott McNealy, an icon of witty one-liners, is now a free agent. After decades of hurling some of the most caustic and sarcastic comments the tech industry has ever witnessed in very public settings, the whole industry now faces a much duller future. This is, unfortunately, everyone’s loss.
