Broadcom is entering the PON chip market and has secured design wins with a major tier-1 equipment vendor. While this is something predicted here, the timetable was sooner than expected. This will have a substantial impact on FTTH component and equipment suppliers as well as the carrier currently conducting lab trials with the device.

Advanced Micro Devices (AMD) has increased its market share compared to its rival Intel (INTC), according to a July 1^st report from iSuppli. AMD’s market share has increased 2.2% over the last year compared to a decline in Intel’s share of .7%. iSuppli estimates that about half of AMD’s growth came at a cost to Intel’s market share, the rest of the growth came from smaller competitors. 

The two companies dominate the market for processors with a combined 92.7% of the market. Although Intel’s portion of the market is still far larger than AMD’s, AMD is making a push and represents a better value to investors. While Intel chips were used in about 7 times more devices in the first quarter, Intel is also a far larger company with a market capitalization of nearly 3700% bigger than AMD’s. AMD is already a decent and improving competitor to Intel and the stock is selling at 16 year lows.

Nvidia (NVDA) said its fiscal second quarter revenue will fall well short of targets because of weak demand, pricing pressure from AMD’s ATI and a faulty graphics processors on older notebook systems. In an SEC filing, the company said it is offering a driver that keeps fans running to relieve stress on the faulty chips in the field.

The company said after the bell Thursday that second quarter revenue is expected to by $875 million to $950 million (statement, Techmeme). The company reported first quarter revenue of $1.15 billion and was projecting the second quarter to be a seasonally average one with a revenue decline of about 5 percent to $1.09 billion. Wall Street was expecting second quarter earnings of 34 cents a share.

The fog surrounding the macroeconomic situation in the US will be lifted slightly this week, since it will be loaded with important announcements all crammed into three and a half days of trading. The markets will end the trading week on Thursday, as Americans prepare for the July 4 celebrations the following day.

Employment figures are the really important news and this will be published on Thursday, with an expected 50,000 more jobs lost in June, taking unemployment to 5.4%. Tuesday saw the publication of the Chicago Purchasing Managers Index for June, and due to be published Tuesday is the Institute of Supply Management Survey, which tracks the manufacturing sector in the US.

Jefferies analyst John Lau this morning cut his ratings on both Xilinx (XLNX) and Altera (ALTR) to Underperform from Hold. Lau writes in a research note this morning that the programmable logic device sector has “consistently underperformed the overall semiconductor sector over the last 5 years.” His view is that PLDs have “morphed from growth to just cyclical stocks.”

Lau says the current business trends in PLDs “remain difficult, with promises of higher PLD adoption still not occurring.” Lay notes that on a compounded basis, PLD revenue growth has lagged behind the broader semiconductor industry, while the stocks over the last five years have been basically flat. He says a recent run-up in shares in the sector “is an aberration,” and that the stocks are likely to under perform the overall semiconductor sector from here.

National’s “SolarMagic,” as the part is called, is not itself a solar panel technology, rather its a chip that can, as National puts it, recoup 50% of energy that’s typically lost in solar cells when dust or shadow falls across the panel. There’s not a lot of detail on the press release about how this magical device works, but I assume we’ll be hearing much more about it.

Standard Microsystems Corp. (SMSC)

“Checks indicate a pick-up in market share in 802.11n […] We believe that Intel’s issues with its 802.11n silicon is benefiting Atheros,” says Richard. He goes on to say he thinks Intel will stop subsidizing the cost of 802.11n to its customers, to instead focus on WiMax chip sales.

Richard says his numbers are going down for this fiscal year ending December, but going up for next year as Richard expects “a rebound in Q4 […]” He continues:

I attended NVIDIA's (NVDA) shareholder meeting on June 19, 2008. NVIDIA has an Asian CEO, Jen-Hsun Huang, who comes across as knowledgeable and enthusiastic. In San Jose, where so many Southeast Asians, Middle Easterners and Asians drive innovation, most companies still have no diversity in upper management ranks. While NVIDIA appears to be diverse, it's not helping the company's share price, which is down significantly this year.

NVIDIA designs graphics chips and cards. The company has partner fabs that actually make the chips which are then sent to partner factories to be mounted on video cards for PCs. NVIDIA graphics cards that bear NVIDIA as the manufacturer are referred to as reference cards.

With the explosion of oil prices and implosion in the value of the dollar, a perfect storm is brewing for U.S.-based, export-oriented providers of alternative energy related products. MEMC Electronic Materials (WFR) fits that description nicely, though investors will have to climb a “wall of worry” to overcome some of the fears holding the stock back.

MEMC refines silicon, grows silicon ingots and slices wafers for electronics and solar applications. 80% of its revenues come from the semiconductor industry (projected 7.7% CAGR over the next 5 years) and 20% from solar applications (47-81% solar industry CAGR projections from Solarbuzz and Photon Consulting respectively). WFR’s revenues have grown at a 23% CAGR for the last five years and are projected to continue growing at that pace or better for the foreseeable future, according to its CEO Nabeel Gareeb.

Continuing my coverage of the ATE industry, in this post, I will discuss Teradyne, the leading supplier of Automatic Test Equipment. Teradyne (TER) is a global leader in electronics testing and inspection solutions and is the world’s largest supplier of semiconductor test equipment for logic, RF, analog, power, mixed-signal, and memory technologies. The company announced impressive Q1 results a couple of months ago.

Its revenues of $297 million surpassed the market’s expectations of $294 million to grow 15% annually and 14% sequentially. EPS grew to $0.12, compared to $0.04 the previous year and $0.09 the previous quarter. The Street was expecting EPS of $0.11. Teradyne repurchased stock worth $3.3 million at an average price of $11.83 in the quarter. 

F3Q08 Earnings Call

The next generation of the Apple (AAPL) iPhone - by which I mean, not the 3G iPhone due on July 11, but the version after that - will be powered by a version of Intel’s (INTC) new Atom family of low-cost, low-power processors, according to JoAnne Feeney, an analyst with FTN Midwest.

In a research note this morning, she wrote that the Atom-powered iPhone may arrive sometime in 2009 or 2010.

Micron Technology (MU) this afternoon reported revenue for its fiscal third quarter ended May 29 of $1.5 billion, slightly better than the Street consensus of $1.47 billion. The company lost 30 cents a share in the quarter, two cents worse than the Street had forecast. Micron had a gross margin in the quarter of 3.2%, which is better than the negative gross margin reported in the February quarter, but down from 8.2% a year earlier.

Micron said DRAM average selling prices fell 5% sequentially in the quarter, while NAND Flash prices fell about 20%. The company said it sees cap ex for the 2008 fiscal year of $2.5 billion to $3 billion; it spent $577 million in the latest quarter.

Guidance

The consensus estimate is loss (28c) for EPS and $1.47B for revenue, according to First Call. PacCrest expects upside for the May quarter, however it cautions for the August quarter guidance. Deutsche Bank is modeling revenue of $1.565B and a GAAP EPS loss of (31c). The firm assumes memory revenue of $1.41B (64% DRAM) and Imaging revenue of $155M. The firm is also modeling a gross margin of 3.6%, net of any inventory write-downs on a +6% sequential quarterly increase in DRAM ASPs and a -19% decrease in NAND.

On Tuesday I talked about the trend of the design and test sides of the semiconductor industry coming together. The industry is moving towards inserting “testers” into chips, thereby eliminating/reducing the need for high-end testers in most cases. In the next few years, we will see tighter integration between design and testing, and potentially more conversations between the EDA and the ATE industries.

Verigy’s (VRGY) acquisition of Inovys is one such step towards integration. Verigy manufactures advanced test systems and solutions for the memory and system-on-chip segments of the semiconductor industry. The company was spun off from Agilent Technologies in 2006.

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