Market News

SAN JOSE, CA– Tessera Technologies Inc. has released its third-quarter results. Net loss was reported at $5.4 million, or $0.11 per share.
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SAN JOSE -- Worldwide sales of semiconductors rose 1.6% year-over-year to $23 billion in September, and 1.1% from August, the Semiconductor Industry Association said last night.

Year-to-date sales are up 4% to of $196.4 billion. That's 50 basis points lower than the SIA mid-year forecast.

Excluding memory products, September sales grew 7.8% year-on-year. Pricing pressures are having a harsh effect on memory revenues, with flash memory chips down 37.5% year-on-year and DRAMs off 11.1%.
“The rate of semiconductor sales growth slowed in September as the industry began to feel the effects of the turmoil in world financial markets,” said SIA President George Scalise. “We face a near-term period of uncertainty with a steep decline in consumer confidence and caution in the enterprise segment.

"Sales of personal computers and cellphones – the two largest drivers of semiconductor sales – remain strong in these emerging markets, driven by growing consumer populations and rising income levels coupled with more affordable pricing. Economic growth in major developing countries is still high in mid- to high-single digits, albeit below recent peaks.”
Analysts project PC unit sales will grow at least 11.5% this year, with developing countries accounting for nearly half of unit sales. JP Morgan projects 8.7% year-on-year unit growth in cellphone sales, to 1.35 billion in 2008. Again, developing countries are expected to account for nearly 70% of unit sales of cell phones in 2008.
Sales of other consumer electronics including MP3/PMP devices and LCD TVs remained positive through the first nine months of 2008, according to iSuppli. The research firm projects 5% growth for all consumer electronics, with 11% growth for MP3/PMP units and 33% growth in LCD TV units this year. Consumer purchases drive more than half of semiconductor sales.
“Year-to-date chip sales growth of 4% trails the SIA mid-year forecast of 4.5% growth,” said Scalise. “Restoring consumer confidence is key to growing semiconductor sales going forward."
TAIPEIHon Hai Precision Industry (the trade name of Foxconn) reported net profit of $540 million for its third quarter, down 10% year-over-year, but beating market expectations.
Forecasts earlier predicted profits of $507 million for the quarter.
The world's largest vertically integrated EMS/ODM that's footprint includes PCB Fab manufacturing locations in China did not cite reasons for the decline in earnings.

In July 2008 Foxconn began moving factories from the Shenzhen area to the northern Chinese provinces of Hebei and Shanxi, where lower salaries (60% less than Shenzhen) were expected to help improve company profit.
SAN JOSE, CA -- Sanmina-SCI Corporation announced the promotion of Hari Pillai to president and COO, replacing Joe Bronson. Mr. Pillai was most recently the president of global EMS operations for the company and has worked for Sanmina-SCI for 14 years. Mr. Pillai had a leadership role during Sanmina- SCI's entry in the EMS market and was instrumental in the planning and implementation that lead to end-market diversification into industries including medical, defense and aerospace.

“Hari is a long standing and well respected member of our management team who has a clear understanding of the industry and the company's strategy, goals and objectives. He is a results oriented leader with a proven track record of consistently delivering positive results. His broad experience in all facets of the business makes him a natural successor to the president and COO role,” stated Jure Sola. 

Regarding the past president Joe Bronson who took over last August, Jure Sola commented, “I want to thank Joe Bronson for his support during this past year as he helped the company strengthen its management team and position Sanmina-SCI for the future. With Joe's support we have had the opportunity to set the foundation for Hari to take over as president and COO. Going forward, Joe will assist me in an advisory capacity as I continue to take advantage of his extensive global operational and financial experience and enable the company to make further progress."

SAN JOSE, CA -- Sanmina-SCI Corporation reported financial results for Q4 and the fiscal year that ended September 27, 2008. Sales were down slightly YoY for the quarter and up narrowly for the year. Gross profit was 7.8% for Q4 and 7.4% for the year, both ahead of the previous year’s performance.

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SAN JOSE, CA -- Tessera Technologies, Inc. has been awarded a confidential interim judgment that asserted the Tessera patents are valid and enforceable and that certain of Amkor’s products are made under the asserted Tessera patents.

An arbitration panel found unanimously in favor of Tessera for monetary damages based on Amkor’s material breach of its license agreement and failure to pay royalties, with the exact amount of damages to be decided at a later date. 

The arbitration panel ordered that damages for past royalties for infringing packages from March 2002 through March 2008 be apportioned using percentages set by the panel, subject to certain offsets. Damages experts for each of the parties are to calculate the amount of past royalties due as damages to Tessera based upon the parameters established in the interim order and submit a joint report by November 17, 2008.

Amkor believes the final damage award will be well below the $85 to $115 million originally claimed by Tessera in its initial arbitration filing.
The patents at issue in the arbitration are U.S. Patent No. 5,852,326 (the '326 Patent), U.S. Patent No. 6,433,419 (the '419 Patent), U.S. Patent No. 6,465,893 (the '893 Patent), and U.S. Patent No. 5,679,977 (the '977 Patent).

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