Tuesday, October 03, 2006


AKAM Target Raised - Jefferies raises their 2007 ests and tgt on AKAM to $59 from $47, saying the co is a clear beneficiary of an unprecedented level of demand for content distribution services. Firm says the co has no direct competition and execution has been solid, and several upcoming Windows releases could produce upside in the short- to medium-term.

CPU Shortage - Digitimes reports unexpectedly strong demand in the notebook market has resulted in CPU shortages, sending notebook makers scrambling to secure CPU supply for the fourth-quarter high season, according to industry sources. Some notebook makers have described the gravity of the shortages by saying they may have to "beg" daily for CPU supply, the sources claimed. A weak notebook market in the first half of this year caused notebook makers and CPU suppliers Intel (INTC) and AMD to take a cautious approach for the fourth quarter, the sources explained. But demand is picking up unexpectedly fast, tightening CPU supply, the sources added. Intel products that are currently in short supply include some in the Core 2 Duo (Merom) series, some in the Celeron M line, and the Yonah T2250 and T2050, the sources revealed.

MRVL Update - FBR notes yesterday after the bell, MRVL negatively preannounced its F3Q(Oct)07 quarter. The main culprit appears to be inventory, particularly in the hard drive space, due to the PC slowdown that started in 1H, and exacerbated by the STX / MXO merger. Net, firm says not a big surprise, although it is notable that the co chose to throw in the towel with still a month to go in the quarter. Firm says the comment in MRVL's release which leaves them with concern is the co's view that hard drive shipments are weaker than seasonal in the quarter. Firm says it appears that MRVL is blaming the miss at least in part on weaker hard drive sell through in F3Q, which would be a point of concern since the semiconductor build for PC appears to have been seasonally normal thus far. Firm says given all of the hard drive specific issues going on right now, they are hesitant to use hard drive weakness to make a negative call on PC sell through, however. Firm cuts their tgt to $19 from $23 on lower ests... BWS Financial notes the news of the restatement has a more significant impact on the shares of MRVL since MRVL is already late in filing their second quarter 10-Q. Firm says restatement of financials from 2000 on could present a challenge for the co in meeting NASDAQ listing requirements before the shares are delisted. Firm believes this poses as a short-term overhang on MRVL shares that is likely to prevent the shares from making much of an advance. Firm is reducing their ests accordingly, but believe that the slowdown in the hard disk industry is only temporarily, as demand for personal computers is expected to increase with the release of Windows Vista and new processors from Intel (INTC)... Thomas Weisel notes HDD is the cause of near-term woes for MRVL. Firm believes this is because of WDC and notebook customers. Firm notes co is expecting higher G&A costs because of the stock option review. Firm lowers Q3 ests to $515 mln and $0.13 from $582 mln and $0.19. For Y07, est go to $2.19 bln and $0.74 from $2.28 bln and $0.82. Firm believes the excess inventory situation may be short term in nature and expects a resumption of growth in F4Q07.

BRCM - Co announces that a federal judge today ruled that Qualcomm (QCOM 34.66) was not entitled to the injunction it requested. The judge characterized Qualcomm's requested relief as "light years beyond" what would be appropriate. Broadcom also announced two new initiatives in its legal fight against QCOM regarding cell phone technology.

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