OmniVision (OVTI) is a California semiconductor company that makes solid state image sensor devices, or camera chips, for cell phones and other consumer products. Though design is carried out in the United States, chip fabrication occurs in Taiwan.
DigiTimes has reported news of "CMOS image sensor supplier OmniVision planning on reducing its order volumes to Taiwan Semiconductor Manufacturing Company (TSMC) in the third quarter". Instead of increasing orders by 10% it will reduce orders by 10%.
A weakening in the handset market is said to be the cause of the reduction in orders. OmniVision apparently increased inventory too rapidly based on overly optimistic expectations for cell phone orders.
This comes after the company disappointed investors last quarter, missing analyst expectations for both sales and earnings. In the company's fiscal fourth quarter ending in April, sales fell 25%. EPS came in at $0.27, shy of analyst estimates of $0.32. The stock has fallen from over $19 in April to under $12 today.
This may add a question mark to a recent bullish recommendation by Caris chip analyst Betsy Van Hees who recently came out favorably on the company based on long-term strength in the image sensor market and a higher margin product mix.
On a side note, OmniVision's higher margin products will increasingly put it in more direct competition with Aptina Imaging, a spin off from Micron Technology and a company that has been successful targeting the mid-range to high-end of the CMOS image sensor space.
Disclosure: none
Wednesday, July 16, 2008
More trouble in store for OmniVision?
With the S&P 500 falling to a fresh two-week low, the big question is whether this is a correction, or the start of a major trend on the downside?
Our friends at MarketClub have just finished a short video that details many of the key concerns that we have for this market. If you have not seen one of their videos before you may enjoy this one. This video does not require a plug-in.
The video is free to watch and there is no need to register. I would love to get your feedback about this video on our blog.
I highly recommend students of the market take a few minutes and watch this timely video. Even if you’re a seasoned pro you may find what you see interesting and therefore profitable.
As always, this informative video is complimentary with no strings attached.
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