Morgan Keegan Gives Company Updates On Emulex And QLogic

For Emulex

, the company is comfortable with a target of 25% of total revenues for ServerEngines in calendar 2011. Morgan Keegan adds that there is optimism that March may be the bottom with growth resuming in June. Looking at QLogic

, the company has a chip, 3GCNA, which is comparable to ELX's solution. Growth is expected to be driven by a need for convergence going forward. It appears that things are returning to more normal seasonal trends. According to Morgan Keegan, Emulex is comfortable with its goal of exiting calendar 2011 with Server Engines accounting for 25% of revenues. This compares to the roughly 10% of HSP revenues, or $8 million in the September 2010 quarter, and the slightly greater than 10% of total revenues in the December 2010 quarter. The drivers to get to this target are strength at Hewlett-Packard as well as the ramp at other customers. Morgan Keegan recently met with management and reaffirmed its view that QLGC expects growth to be driven by convergence. The drivers here are growth in the 10GbE and Infiniband segments. Management indicated that QLGC now ranks as the third largest 10Gbe supplier and sees this market as an $80-100 million opportunity for them. Morgan Keegan continues to find shares of QLGC attractive at current valuations. ELX is trading higher at $10.11 QLGC is trading higher at $17.24