Piper Jaffray Gives An Update On Silicon Labs Following Visit With Management

Piper Jaffray estimates the Silicon Labs

timing business and video products will generate $55M and $70M of revenue in CY11 and CY12, respectively. Offsetting this somewhat is the headwind from FM tuners that will continue to decline as a percentage of revenue moving forward. Moreover, GM pressure from new product ramps in video and less favorable terms from constrained suppliers will abate as the company drives cost reductions in TV tuners and lower margin FM tuner revenue falls. Piper Jaffray believes this is setting up accelerating top line growth and operating leverage. Finally, Piper believes SLAB is reaching a critical mass as the company's product diversity and broadening market and customer exposure leverage each other to reinvigorate top line growth. Piper Jaffray believes most investors do not appreciate mixed signal companies since there are so few good ones. By mixed signal we are referring to digitized analog. SLAB takes difficult analog problems and solves them by implementing the circuit using analog sparingly and quickly converting to digital for the bulk of the signal processing. Piper has a $51 PT and Overweight rating on SLAB SLAB closed Friday at $45.73