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Friday, August 31, 2007

Omnivision and Micron Got Good News

Barron's cites Robert W. Baird chip analyst Tristan Gerra writing that recent investor speculation that memory chip maker Micron Technology (MU) will spin-off its image sensor division “could be true”. He says the potential spin-out would be accretive to Micron’s earnings by a few cents a share “and would create a pure play and number-one CMOS image sensor supplier into mobile phones.”

Gerra today also asserts that Micron “has a significant win” at Nokia for its image sensors which will ramp up next year. He says the company also has maintained its “stronghold position” at Motorola, including the RAZR2, and also continues to be a supplier to many smartphones, including the Apple iPhone.

With yesterday's earning report and upbeat forecast Omnivision gets a lot of comments today. Marketwatch writes that average selling prices for Omnivision's sensor chips rose to $2, up from $1.92 for the three month period ended April 30, bolstered by a shift towards 2-megapixel products. It shipped 86 million sensors, up from 62 million shipped the prior quarter.

"After a long struggle last year, market share gains, richer product mix and improving gross margin are finally trickling down to the bottom line," wrote analyst N. Quinn Bolton of Needham & Co.

Some other analysts are sceptical, but my personal impression is that Omnivision overturn is for real. Finally Omnivision was able to deliver a good 2MP product and partially closed the technology gap in 1.75um pixel. No doubt this should improve the company market position.

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