Ceva Inc. (Nasdaq:CEVA); LSE:CVA) will supply its Teak DSP core to NXP Semiconductors NV for use in its highly integrated ultra low-cost single-chip solutions targeting low-cost and entry-level handset designs for emerging markets.
On the basis of Ceva’s business model of licensing agreements and royalties on sales, the company expects several million dollars from the NXP contract. The company will also receive $0.10 in royalties on every cellular telephone sold by Samsung Electronics Co. Ltd. (KSX:5930) or any other manufacturer that incorporates NXP processors.
In a separate development, Ceva will supply its TeakLite DSP Core to Broadcom Corporation (Nasdaq:BRCM) for processors that will be used in Samsung 3G cellular telephones. Ceva will receive $0.05-0.10 in royalties for every Samsung handset sold that incorporates its technology. Broadcom, whose chips are also based on Ceva’s technology, also announced this week that it would begin to supply chips to Samsung. This win will lead to further revenue at Ceva from Samsung.
Baseband and multimedia solutions utilizing open DSP architectures, such as CEVA-TeakLite, Ceva-Teak and Ceva-X, are increasingly favored by handset manufacturers. Will Strauss, president of research firm Forward Concepts, says "The recent design wins for Broadcom and Infineon at Nokia with platforms incorporating Ceva DSPs, along with NXP's win at Samsung, are strong endorsements for Ceva's DSP technology by the handset industry's largest players.”
Ceva’s DSP cores are used for mobile, consumer electronics and storage applications. The share closed at $9.25 on Nasdaq and ₤4.62 on the LSE yesterday, giving a market cap of $181 million. The share was down 2.7% on the LSE by mid-afternoon and was down 1% at the opening on Nasdaq today.
Published by Globes [online], Israel business news - www.globes.co.il - on October 10, 2007
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