Tuesday, September 05, 2006

Calls of Note Part 4

- Jefferies notes that despite the option overhang, they believe Trident (NASDAQ:TRID) remains the best way to access the significant DTV market growth due to its superior customer base. Firm recommends investors build positions as they expect a strong sell-through and design wins to deliver significant revenue growth and strong profitability in CY06 and CY07.

Recent round of checks within the TV supply chain suggest orders remain robust. With regard to design activity for 2007, they believe that Trident will likely maintain its share at Sony, Samsung, and Sharp, and gain Philips, resulting in an increased share Y/Y in 2007.

Trident remains the best way to play the DTV market. Despite all of the concerns regarding
increasing competition, they believe they are likely overblown as recent checks suggest that Trident appears well-positioned to maintain its share at Sony, Samsung, and Sharp in 2007. In addition, they believe Trident has secured wins in a worldwide LCD TV platform with Philips, potentially 3-4MM units in CY07.

Firm believes Broadcom (NASDAQ:BRCM) is gaining traction in the TV market, but limited impact to Trident in 2007. Although they have found Broadcom at LG, checks have not revealed any Broadcom traction within Trident's main volume platforms at Sony, Samsung, and Sharp. They do believe that Broadcom has secured wins at Sharp with its PC/TV division, not currently Trident sockets. More importantly, Trident investors will likely take comfort that the much talked about Broadcom wins do not impact Trident's major customers.

Reits Buy and $28 tgt.

Notablecalls: Not actionable but good to know category.

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