), an original equipment manufacturer (OEM) of a broad range of
high-reliability and analog/mixed signal integrated circuits,
announced its collaboration with
The two companies have decided to pool in their expertise
(Microsemi's precision time protocol technology and LSI's Axxia
communication processors). The resultant solution is expected to
improve the flexibility, efficiency and operability of backhaul
networks at lower costs. The significance of the deal stems from
its ability to address growing data needs of mobile networks.
According to research conducted by
Cisco Systems, Inc.
), global mobile data traffic may grow 18 times over the 5-year
period from 2011 to 2016. The steep rise in mobile traffic is due
to the unprecedented increase in mobile Internet usage through
smartphones, tablets and laptops. It is also expected that the
world population will cross the 7.3 billion mark by 2016, which
obviously bolsters the usage of these devices.
In addition, a study by IDC suggests that smartphone shipments
will reach 659.8 million units in 2012 growing at a compounded
annual growth rate (CAGR) of 18.6% to 2016.
The immense popularity of smartphones and tablets has led to
accelerated growth in mobile Internet usage. The reports suggest
that current growth rates will be more or less sustained. Hence,
mobile Internet demand will trend higher.
Microsemi has been investing heavily in R&D. Management is
focusing on security and increasing the electronic content per
device and per customer, which will eventually grow its market
share. Further, Microsemi's strength is in its vast product range
and offerings for next generation 4G LTE networks. This can help
Microsemi outperform its competitors and increase its market share
in the long run.
Microsemi's revenue in the third quarter of fiscal 2012 was
$259.2 million, up 4.0% sequentially and 19.6% year over year. The
communications market was the largest contributor, making up 31.0%
of sales. The defense & security market generated 28.0% of
sales and aerospace generated 21.0%. The defense, aerospace and
medical markets largely use Microsemi's high-reliability chips,
while the other markets use its analog/mixed signal products.
Currently, Microsemi Corporation has a Zacks #3 Rank, implying a
short-term 'Hold' rating
CISCO SYSTEMS (CSCO): Free Stock Analysis
LSI CORP (LSI): Free Stock Analysis Report
MICROSEMI CORP (MSCC): Free Stock Analysis
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