Intel Corporation (NASDAQ:INTC) could capture a significant share in the tablet market with its new 22nm based “Bay Trail” atom processors, which will be launched by the company in the second half of 2013, according to analysts at JP Morgan Equity Research.
They also cited a report from AndroidOS.in that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) might be using Intel Corporation (NASDAQ:INTC)’s Atom Z2560 Clover Trail + processor in its new 10-inch Android tablet.
JP Morgan analysts Sandeep Deshpandee, Chetan Udeshi and Vipul Hirani cited that if the report is true, Intel Corporation (NASDAQ:INTC) will potentially benefit from Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) as the company is perceived to capture a meaningful share in the Android tablet market.
According to the analysts, “We note than Atom Z2560 contains Imaginatio’s PowerVR SGX 544MP2 GPU and thus, this potential win for Intel would also be positive to Imagination’s royalty units/revenue.”
Shares of Intel Corporation (NASDAQ:INTC) are trading around $24.07 per share on Monday.
Meanwhile, JP Morgan analysts noted that the semiconductor business continues to improve, citing every company present during the 41st JP Morgan Technology Conference indicated a growing rate of backlogs and orders. The analysts also cited that most companies projected a normal seasonal revenue growth in the second quarter this year.
The analysts also believe that non-tech investors have been buying shares of semiconductor companies as they look for leverage and yield. According to them, “We expect semiconductor stocks to continue to drift higher, along with consensus estimates, as long as the global economy continues to improve.”
JP Morgan analysts said they like Xilinx, Inc. (NASDAQ:XLNX) and Analog Devices, Inc. (NASDAQ:ADI) among stocks in the semiconductor sector. According to them, the two stocks underperformed the SOX and index and they believe that XLNX and ADI will offer excellent upside to consensus estimates.
On the other hand, Deshpande believes that the management of STMicroelectronics N.V. (NYSE:STM) will reduce the company’s opex by 23 percent compared with its level in the first quarter this year. He reiterated its overweight rating for the company, with a 20 percent upside to its price target at €8.8.