Integrated Device Stays a Hold

Semiconductor OEM [original equipment manufacturer] Integrated Device Technology (IDTI - Analyst Report) should benefit from higher sales of its Grantsdale chipset and new products in the current quarter. However, positive developments in the communications sector are not likely to last long.

Even though the acquisition of Integrated Circuit will increase the size of the firm by 40 percent, we remain concerned that the addition of SigmaTel, Inc.’s PC audio division could hurt IDT’s margins.

We expect share upside to be limited until the state of the world economy is a little clearer. Shares are likely to trade in line with the industry group in the near-term. We continue to rate shares of IDT a Hold with a target price of $12.

Read the analyst note on IDTI