Micrel, Inc. (NASDAQ:MCRL)

CAPS Rating: 3 out of 5

The Company designs, develops, manufactures and markets a range of analog power ICs, mixed-signal and digital ICs.


Player Avatar NetscribeSemiCdr (58.17) Submitted: 3/28/2007 1:56:32 AM : Outperform Start Price: $9.83 MCRL Score: -13.64

Micrel Inc. is a leading manufacturer of IC solutions for the worldwide analog, Ethernet and high bandwidth markets. Its product range includes a range of high-performance analog power integrated circuits, mixed-signal and digital ICs. These products address a range of end markets, including cellular handsets, portable computing, enterprise and home networking, wide area and metropolitan area networks and industrial equipment. The company also manufactures custom analog and mixed-signal circuits and provides wafer foundry services for customers who produce electronic systems for communications, consumer and military applications.
The company reported 10.4% increase in the sales revenue for the year 2006 as compared that posted in the year 2005. This was one of the best financial performances on an annual basis in the company’s history as the revenues reached the second highest annual amount ever recorded. The company derives more than 90% of its revenue from the sales of standard analog ICs that handle power management in electronics, one of the largest growing sectors in the semiconductor industry. Micrel's has an upper edge over its peers as the complexity involved in analog chip design creates a barrier to entry in this segment of the semiconductor industry.
The semiconductor industry as a whole is expected to grow at a rate of more than 10% in 2007. Due to the competitive advantage and its power management offerings for fast growing end markets, Micrel it seems to be well positioned to grow faster than the broader semiconductor market. Along with this the diverse portfolio of products with around 2500 standard products in its kitty the company is expected to outperform the market both in terms of revenue growth as well as the stock price in the coming future.

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