Microsemi Launches Programmable Devices - Analyst Blog


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Microsemi Corporation ( MSCC ), an original equipment manufacturer (OEM) of a broad range of high-reliability and analog/mixed signal integrated circuits, announced that several of its field programmable gate arrays (FPGAs) and customizable system-on-chip (cSoC) solutions have been qualified for use in extreme temperatures of 150 to 200 degree Celsius.

FPGAs, or field programmable gate arrays, are semiconductor devices that allow programming/reprogramming even after the device has been installed. This flexibility makes the devices more expensive relative to regular programmable logic devices (PLDs), so their use is relatively restricted.

SoCs or System on Chips are integrated circuits that incorporate programmable logic, temperature or power sensing and management plus communication functions into a single, low-power device.

Microsemi's high-reliability products have already been deployed in down-hole drilling products, space systems and avionics equipment. Management believes that its newly qualified products, such as the ProASIC and IGLOO FPGAs and SmartFusion cSoCs will be particularly useful in drilling operations because of their resistance to very high temperatures, physical shock, pressure and magnetic field disruptions.

Given that the complexity of drilling operations and depth of wells will increase over time as the availability of oil declines, there will be a growing demand for increased efficiencies and limitations on cable usage. This is where Microsemi's chips are expected to prove extremely useful.

As per research conducted by Marketline, the oil and gas industry is expected to grow at a 7.0% compound annual growth rate (CAGR) to roughly $3700.0 billion by the end of fiscal 2015. Another research report by 2B1st Consulting Group suggests that $75.0 billion will be invested in drilling rigs in the next 5 years.  Therefore, Microsemi is likely to be one of the beneficiaries of this growth.

Microsemi's revenue in the second quarter of 2012 was $249.3 million, up 3.5% sequentially and 20.2% year over year. The defense, aerospace and medical markets largely consume Microsemi's high-reliability chips, while the other markets use its analog/mixed signal products.

Currently, Microsemi Corporation has a Zacks Rank of #3, implying a short-term Hold recommendation.

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