Jefferies

Best Research Ideas

Semiconductors – The 4th Tectonic Shift in Computing: To a Parallel Processing / IoT Model

— Mark Lipacis, Equity Research Analyst, Semiconductors

Jefferies believes the computing industry is at the start of the fourth major development towards a parallel processing / Internet of Things (IoT) model. The firm forecasts a paradigm shift driven by lower memory costs, cheap data storage and improvements in parallel processing hardware and software. Jefferies believes INTC has the most to lose as the key data center incumbent, and NVDA has the most to gain as the role of MPUs transitions to GPUs. NVDA’s position will be entrenched for years due to their prior investment in CUDA, their market leading parallel processing platform, and Nvidia’s Titan X can have up to 6,000 GPU cores, two full orders of magnitude higher than the highest core count MPUs. Jefferies views NVDA, AMD, XLNX, CAVM, MXIM, TXN, ADI and MCHP as the primary beneficiaries of the shift to the parallel model and upgraded CAVM and XLNX to Buy in conjunction with this report. FULL REPORT