CIBC Chops Estimates For Trident; Sees Pricing Pressure Increasing

Digital TV chip maker Trident Microsystems (TRID) is being pressured to cut prices by sharp discounting by some troubled competitors, CIBC’s Daniel Gelbtuch asserted in a research note Monday. Gelbtuch cut his price target on the stock to $22 from $28, and reduced his EPS estimates. For 2007, he’s down to $1.10 from $1.11; more significantly, for next year he drops to $1.16 from $1.50.

“Although LCD-TV market trends remain robust and TRID’s customers grab market share, near-term pricing (and guidance) could be impaired if Micronas and Genesis (GNSS) put up last stands and dump products,” he says. “We believe GNSS and Micronas, whose [digital TV] units are not in good shape and are likely heading for the exits, are dumping ASPs in a last-ditch attempt to dress up their top lines. As a result, we believe Tier 1 OEMs, who are under their profitability crunches, are leaning on TRID for pricing concessions.”

Trident Monday also said it had received a stay of a Nasdaq delisting order.