【出版时间及名称】：JPM-SMID CAP SEMICONDUCTORS-DRIVING NEXT-GEN INNOVATION WAVE-100225
      【作者】：jpm
      【文件格式】：pdf
      【页数】：50
      【目录或简介】：
JPM-SMID CAP SEMICONDUCTORS-DRIVING NEXT-GEN INNOVATION WAVE-100225
companies that focus on enabling connectivity, content, and storage technologies
(CCS) will exhibit above-average market growth rates which should drive solid
growth in revenue and earnings over the next 18 months. Our favorite names are
BRCM and MRVL, both rated Overweight.
• Connectivity, content and storage semiconductors will be the key building
blocks in enabling trends such as next generation data center architectures,
connected home, HD digital video content, cloud computing, and 3G/4G wireless.
Overall, we believe CCS semiconductor products will play a key role in driving
many other innovations in consumer, communications, and enterprise segments of
the technology sector. We believe the CCS semiconductor total addressable
market (TAM) to be around $68 billion in 2010 growing at a 4-year CAGR of
around 10%-12%. Our Overweight ideas, BRCM and MRVL, have 100%
exposure to CCS segments.
• SMid semiconductor revenue growth combined with significant cost
reductions and efficiencies that occurred in 2008/2009 should drive a sharper
improvement in earnings power and higher peak cash flow and earnings in
2010 and 2011. Although revenue growth (Y/Y) for the group should peak in
1Q10 due to easy compares, we anticipate Y/Y growth for our coverage universe
of stocks will continue to be positive through 2011 and we expect higher levels of
earnings/cash flow generation in 2010 and 2011 versus prior cycles.
• Near-term visibility has improved and 2010 should be a better demand
environment for our SMid semiconductor universe. Due to decent demand
trends during the holiday season and high capacity utilization levels (85%+), an
increasing number of SMid semiconductor companies have suggested that lead
times have increased and pricing trends have become less aggressive. We believe
that positive book-to-bill ratios and higher backlogs have meaningfully improved
near-term visibility. Although the risk of double ordering and an inventory
correction can be expected to occur eventually, our checks suggest that near-term
demand remains solid and overall inventories in the channel and at OEMs are lean
for our SMid universe of companies.
• Our group of SMid semi stocks has seen a 166% return off of the bottom in
early 2009…significantly outperforming