Growth in TV Access, Capabilities, Driving Demand for MaxLinear’s Technologies
A seemingly insatiable demand for technology that can process TV signals and accommodate proliferating technical needs is helping to drive the growth at MaxLinear (NYSE: MXL), according to Kishore Seendripu, chairman and CEO of the Carlsbad, CA-based semiconductor design company.
In a presentation yesterday afternoon at Roth Capital Partners growth conference for small cap companies, Seendripu said demand for MaxLinear’s wireless and “system-on-a-chip” semiconductors is being driven by a host of forces in broadband video and cable TV, including:
—The continuing conversion from analog to digital television broadcasting, which requires integrated circuits that can process either signal.
—The increasing availability of high-speed broadband and wireless connectivity, which is driving demand for wireless TV receivers in chipsets targeting a host of devices.
—Rapid improvements in display technologies.
—The transition from standard to high-definition TV
—The proliferation of multimedia content about programming, actors, sports, and movies, which is accessible through terrestrial broadcast digital TV, satellite, cable, and telecommunications carrier services.
MaxLinear competes in with such U.S. chipmakers as Irvine, CA-based Broadcom (NASDAQ: BCOM) and San Diego’s Entropic Communications (NASDAQ: ENTR), although MaxLinear sells nearly all of its chips to consumer electronics and device makers in Asia.
Seendripu told investors and analysts that consumer electronics manufacturers, cable TV operators, and others want to integrate more TV receivers and the ability to process data from multiple channels in the chipsets they are designing for set top boxes, personal computer TVs, and other devices. “For us, the opportunity is to take these multiple-channel boxes and dramatically scale down the size, power, and cost requirements, Seendripu says.
Last year MaxLinear’s sales increased 34 percent (to $68.7 million from $51.6 million in 2009); Seendripu says he expects the company will continue to experience annual sales growth between 30 percent and 50 percent over the next three years.
The company also went public just over a year ago. While MaxLinear had what Seendripu called “a great IPO,” he told investors and analysts that market conditions were very bad. “We executed on our quarters, but the overall market came down,” he said, adding that the market for mobile TV has not met expectation.