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Tessera Technologies (TSRA)

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Tessera Technologies (TSRA) is a provider of back-end technology for semiconductor manufacturing. Protection of intellectual property (IP) for a company this small is a challenge, as are the inherent pricing pressures in the DRAM market.

We expect 2011 to see only slight growth and escalated litigation, as customers continue to use the technology without renewing their licenses. The wafer level optics technology will also make a slower start than initially expected.

The company derives a significant percentage of its revenues from the relatively small image sensor market. Management has admitted that the adoption of Tessera's wafer level optics technology was at much slower rates than was originally anticipated, which prompted Tessera to lower revenue targets for 2011.

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