Saifun Semiconductors (SFUN)

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Qimondo reduces use of Saifun technology
From the fourth quarter, Saifun is unlikely to have substantial revenue from one of its major customers.

Roee Bergman 15 Oct 06 11:00
Saifun Semiconductors Ltd. (Nasdaq:SFUN) announced on Friday that Qimonda AG, a majority-owned subsidiary of Infineon (NYSE: XETRA:IFX) Technologies AG, had informed it of its decision to reduce its NROM-related activity.
Qimoda is an important customer for Saifun’s IP and design services. Saifun now believes that as a result of the change, it will receive no license fees or service fees from Qimonda, and only limited royalties, after the fourth quarter of 2006. While this development will not impact Saifun’s results for the third quarter, the company believes that it will affect its results beginning in the fourth quarter.

Saifun’s NROM-based technology enables semiconductor manufacturers to develop flash products with greater storage capacity. Saifun does not sells products or hardware, but provides intellectual property solutions for the non-volatile memory (NVM) market.

The “Associated Press” reported on Friday that following the announcement, WR Hambrecht analyst Daniel Amir cut his rating on Saifun's stock to "Hold" from "Buy," and suggested investors stay on the sidelines until a better entry point presents itself.

Lehman Brothers investment bank continues to rate the stock as "Market perform" however it has reduced the target price from $34 to $27.

Published by Globes [online], Israel business news - www.globes.co.il - on October 15, 2006