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Microsemi Corporation (MSCC - Analyst Report), an original equipment manufacturer (OEM) of a broad range of high-reliability and analog/mixed signal integrated circuits, announced that an independent organization completed reliability testing of Microsemi's commercial-grade Axcelerator® Field programmable gate arrays  (FPGAs). The test process spanned 4 years.

FPGAs are semiconductor devices that allow programming / reprogramming even after the device has been installed. This flexibility makes the devices more expensive relative to regular programmable logic devices (PLDs), so their use is relatively restricted.

Microsemi’s Axcelerator® FPGAs are the commercial version of their RTAX-S/SL FPGAs, which are custom designed for space applications using non-volatile antifuse technology, which protects from intense radiation and heat.

According to a Research and Markets report, the global FPGA market is poised to grow at a compounded annual growth rate (CAGR) of 10.4% from 2011 to 2015 driven by growing demand for customizable integrated circuits (ICs). Since FPGAs allow increased flexibility when creating designs and enable electronic device manufacturing companies to minimize their R&D costs, they are seeing increased demand.

Microsemi’s Axcelerator® FPGA is another potent weapon in their radiation-tolerant space products portfolio. They have designed this FPGA specially for the space programs. Overall, FPGAs are gaining popularity in this segment, as engineers can use a single processor in place of multiple ones. In addition, these have to be high in quality, as they have to bear the harsh conditions in space.

RNCOS, a research and consultancy firm expects the global aerospace segment to grow at a CAGR of 2.5% from 2012 to 2015 reaching $460.0 billion by 2015. The increasing adoption of electronics in the segment is therefore likely to be a positive for suppliers such as Microsemi, as well as peers Altera Corp. (ALTR - Analyst Report), Lattice Semiconductor Corp. (LSCC - Snapshot Report), QuickLogic Corp. (QUIK - Snapshot Report).

For the past five decades, Microsemi has grown as a developer of new and innovative products for the aerospace segment. The product portfolio comprises a wide range of high-performance, high-reliability radio frequency (RF) and power components, analog and RF ICs, standard and customizable system-on-chip solutions and mixed-signal and radiation-tolerant FPGAs.

Microsemi’s revenue in the second quarter of 2012 was $249.3 million, up 3.5% sequentially and 20.2% year over year. The aerospace segment generated 21.0% of revenue, increasing 8.0% sequentially. The defense, aerospace and medical markets largely consume Microsemi’s high reliability chips, while the other markets use its analog/mixed signal products.

There are, however, some issues in Microsemi’s defense business, as the U.S. Department of Defense (DoD) has announced that it will trim the defense budget, which could push out some short-term defense programs. This uncertainty could keep the lid on share prices.

Currently, Microsemi Corporation has a Zacks Rank of #4, implying a short-term Sell recommendation.

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