Chips Are Up for WiFi By Bill Alpert
Highlighted companies: Intel (NASDAQ:INTC), Broadcom (BRCM), Texas Instruments (NYSE:TXN), Atheros Communications (NASDAQ:ATHR)
Summary: While the semiconductor sector has generally disappointed this year, WiFi specialist Atheros saw revenues climb 70% this quarter, to $73 million. Atheros has managed to stay nimble in the fast-moving WiFi space where the giants couldn't, while maintaining cost-competitive products. The company is well-positioned to take advantage of WiFi's expansion beyond PCs and into consumer electronics and longer-range WiMax technology. It trades at 18.5 times its expected earnings for next year, less than the WiFi market's probable growth rate.
Quick comment: Other smaller companies competing for share in the emerging 802.11n WiFi standard are Metalink (OTCQB:MTLK) and Marvell (NASDAQ:MRVL) -- Shlomi Cohen says there's room for everyone. Networking analyst Paul Callahan finds Atheros impressive, but sees Marvell (MRVL) breathing down its neck. He also notes that Atheros is winning handsets in Asia. Read the company's latest conference call transcript for more insight on its business.