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Raymond James: Positive Market Outlook For Cavium

|Includes: Cavium Networks, Inc. (CAVM)

On January 9th, Raymond James released a positive report following its interview with Cavium CEO, Syed Ali. Cavium, which is headquartered in Mountain View, California, is a fabless semiconductor company that designs integrated processors for networking, communications, and security applications.

According to the report, Raymond James' analyst team "came away with positive impressions regarding current market conditions and product roadmaps, within the framework of a much more diversified product and customer profile today than just 18 months ago."

Moreover, according to the report's authors, although Cavium did not provide a financial update this week, they express confidence that "market conditions remain positive for Cavium as various wireless basestation ramps are underway, the CAT 3K program at the company's top customer should start preproduction orders in early 2013, and various new smaller customers (in the security area) are starting to ramp. China is seeing some semblance or early signs of incremental improvement."

With respect to developments in small cells, the report's authors note that the "company's Fusion processors continue to see deployments in South Korea for its 4G/LTE solutions. " However, one potential inhibiting factor is that "[m]ost small cell deployments today (Cavium does not consider the more commoditized femto cells as part of small cells by the way), are LTE/4G only as 3G coverage is adequate already…[and the] move to 28nm in 2014 will incorporate 3G support."