Pixelworks’ shares up 80% after Apple reveal

Shares of Pixelworks, which makes chips for digital display, rose almost 80 per cent on Wednesday, a day after the company revealed Apple is among its largest customers.

The iPhone maker contributed more than 10 per cent of revenue in 2013, Pixelworks said in a filing to the US Securities and Exchange Commission.

The disclosure was seen as reinforcing the view that Apple is pursuing a plan to produce its own televisions.

“Pixelworks designs, develops and markets video and pixel processing semiconductors, intellectual property cores, software and custom ASIC solutions for high-end digital video applications,” the company wrote. “Our products allow manufacturers and developers of digital display and projection devices to manufacture screens of all sizes that display the highest video quality.”

Roth Capital Partners analyst Krishna Shankar said Pixelworks' revenue from Apple most likely comes from use of its technology and chips in future iPads, Apple TVs or 6-inch iPhones with 4K displays.

The term 4K refers to displays with higher resolutions than HDTV. The iPhone 6 is expected to launch in the second half of 2014.

Mr Shankar said other companies such as Samsung, HTC, Huawei Technologies, Broadcom and Qualcomm may also license its video processor technology for their smartphone and tablet processors.

Hitachi and NEC also contributed more than 10 per cent each to Pixelworks revenue of $48.1 million (€38.7 million) in 2013.

Mr Shankar raised his price target on Pixelworks’ stock to $10 from $6. The company’s shares rose to a seven-year high of $8.62 on the Nasdaq this week, up over 79 per cent on the day. – (Reuters)