Atmel Corporation (ATML), Microchip Technology Inc. (MCHP), Synaptics, Incorporated (SYNA): This Chipmaker Is Not a Good Investment

Page 1 of 2

Atmel Corporation (NASDAQ:ATML) has been trying to reignite its growth by attempting to ride the success of smartphones, tablets and touch-enabled PCs based on Microsoft‘s Windows 8. The company has been counting on its touch controllers/sensors to expand its core micro-controller business.

Atmel Corporation (ATML)So far, it has been through a roller-coaster ride as nothing seems to be happening to convince investors that it has a plan that’s working with some consistency. The company recently declared its 2Q 2013 results. Let’s take a look at how it has been doing.

Not impressive

Atmel Corporation (NASDAQ:ATML) reported net sales of $347.8 million, which was a 6% decline from last year, marginally beating consensus estimates of $347 million. One of the main reasons for lower revenue was that Samsung’s Galaxy S4 did not sell as well as expected. The other reason was the slow adoption of Windows 8-based systems and devices.

In the tablet segment, Microsoft’s Windows RT has been a failure, and Windows Surface Pro also didn’t move as much as the company would have liked it to. All of these factors have contributed to declining revenue for Atmel Corporation (NASDAQ:ATML).

However, the micro-controller segment grew 7%, which is good because otherwise the results would have been dismal. Also, adjusted earnings went south versus last year from $0.08 per share to $0.06 per share.

Will it get better?

Atmel Corporation (NASDAQ:ATML) is banking largely on the touch controllers/sensors, and it’s optimistic about the growth of Windows 8. This however, so far has been a risky turf as the whole idea of designing an OS with “convergence” in mind hasn’t caused a stir in the market so far. The only positive takeaway is an order win from Lenovo, which so far has been on sidelines as far as touch-enabled PC/notebooks are concerned. If it joins the fray, it could come in as a breather for Atmel as far as its touch controllers/sensors segment is concerned. It has also seen design wins for its maxTouch controller for touch-enabled PCs from Asus and Sony.

Atmel Corporation (NASDAQ:ATML) is looking at revenue between $348 million and $365 million in the third quarter, which at the midpoint is below the consensus estimate of $363 million. So even if it manages to get to the midpoint, it would still report a decline in revenue on a year-over-year basis.

Sales of touch-enabled PC’s haven’t really taken off so far. Some even say that Windows 8 is a failure. This could be a damper for Atmel Corporation (NASDAQ:ATML) and is something that might not go down too well with investors. The company cannot expect miraculous growth in its traditional micro-controllers, as there are other players in the market, like Texas InstrumentsMicrochip Technology Inc. (NASDAQ:MCHP) plus, reliance on PCs isn’t a good idea these days.

Strong competitors

In the “touch” controllers/sensors segment, Atmel has Synaptics, Incorporated (NASDAQ:SYNA) as competition, and in the micro-controllers segment it has Microchip to contend with.

Synaptics, Incorporated (NASDAQ:SYNA) declared its 4Q 2013 results this month, and its numbers indicate that it’s on a growth path. It beat the Street expectations hands down, posting net income that more than tripled from last year. In the reported quarter, revenue grew 67% to close at $230.2 million, and this beat consensus estimates of $220.8 million. Net income in the reported quarter was $1.29 per share, up from $0.36 per share a year ago.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!