) shares gained 1.01% on Wednesday, Nov 27, buoyed by the
announcement of a patent cross-license agreement with Soitec.
Sentiment turned bullish as the agreement ends all pending legal
issues between these two companies. The companies will also have
exclusive rights to use each other's patent related to
silicon-on-insulator (SOI) wafer products. SOI is a technique by
which bulk silicon wafers are substituted with wafers consisting
of three layers in a chipmaking process.
Soitec is a manufacturer of semiconductor materials for
electronic and energy industries. The company's products are
essential for producing semiconductor devices, which are used in
computers, cellular phones and other mobile electronic devices,
automobiles, as well as other consumer and industrial
Soitec's portfolio of patents will strengthen SunEdison's SOI
product competencies, which in turn will increase its overall
market growth going forward.
UK-based technology research firm Technavio projects that the
global demand for silicon wafers will grow at a 5-year compound
annual growth rate of 5.23% from 2011 to 2015. The demand will
mostly be influenced by capacity expansion of semiconductor
manufacturers. We believe that the current agreement is a
positive move for SunEdison and is in sync with the company's
SunEdison is expected to benefit from the rise in demand for
solar energy, and the divestment of its semiconductor business
would further enable it to concentrate on its core
Though the Solar segment has not performed well in the last
two quarters, we believe there is still immense potential due to
its improving backlog and project pipeline. We also consider
SunEdison's recent tie-up with Brazil's Petrobras, to build one
of the largest solar photovoltaic power plants as a positive.
This venture will help SunEdison to tap the Brazilian solar
market and expand geographically.
Currently, SunEdison has a Zacks Rank #3 (Hold). Better-ranked
stocks in the technology sector include
Microchip Technology Inc.
First Solar Inc.
). While SanDisk sports a Zacks Rank #1 (Strong Buy), Microchip
and First Solar carry a Zacks Rank #2 (Buy).
FIRST SOLAR INC (FSLR): Free Stock Analysis
MICROCHIP TECH (MCHP): Free Stock Analysis
SANDISK CORP (SNDK): Free Stock Analysis
SUNEDISON INC (SUNE): Free Stock Analysis
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