Highlights include Intersil Corporation (ISIL) and Advanced Micro Devices, Inc. (AMD).

Intersil Corporation (ISIL) is an OEM of analog and mixed signal semiconductor ICs. Management expressed confidence that the bottom is behind it, and judging from the increasing order rates and growing backlog, we are inclined to agree.

The High Performance Analog market is a key reason we are bullish on the shares.

The basics of operating in the high-performance analog market include consistent introduction of new and innovative products that offer something more than that currently available in the market. The degree of innovation drives ASPs and margins for analog companies, and also serves as a general indicator of the life of the products. Intersil recently introduced several new products into the high-end consumer market.

The new high frequency synchronous buck regulator is designed to power transmission power amps in cell phones. It also introduced a digital output sensor with special options that allow low light sensitivity and good spectral response even in sunlight. Revenue from the SERDES family introduced last year is expected to gain traction in 2009.

More recent introductions include a family of high-voltage LCD level shifters for LCD panels using high frame refresh rates. This is expected to improve viewing angles in televisions and LCD monitors. The first quarter-micron product based on the BCD process was also launched. This is a power supply supervisor offering accurate voltage thresholds and low quiescent current, enabling quick response to over-current surges.

In the optical storage segment, sampling of the world’s smallest optical power management chip for slim and ultra slim blue drives is in progress at five of the top optical drive manufacturers. The blue drive technology is expected to take off in 2009, so we may expect incremental revenue from this area as well.

The company introduced a number of products in 2008 targeted at computing customers. These products have been in various stages of testing and sampling through the last fiscal year. However, growth rates were ultimately impacted by the recession and resultant increase in channel inventories.

Some of these products include an integrated power solution for AMD’s (AMD) Phenom processors (for desktops) and Opteron Barcelona processors (for servers); core power solutions for Montevina, Intel’s next generation platform for notebooks; core regulators developed to support Intel’s DR 11.1 platforms for the Eagle-Lite desktop platform (which started shipping in 2008). All these products are now expected to gain traction in 2009.

Sejuti Banerjea contributed to this report.

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