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Sigma's Luck Goes Omega

2:00 PM -- Stepping back to the chip world for a moment...

Sigma Designs Inc. (Nasdaq: SIGM) has enjoyed a mini-monopoly, being the only vendor whose set-top chip is certified to work with the Microsoft MediaRoom platform. That could end soon. Broadcom Corp. (Nasdaq: BRCM) is close to certification and could announce it at CES in January, analyst Jeff Schreiner of American Technology Research writes in a note issued this morning.

That would bring the inevitable big-name competition down on Sigma's head and probably stifle the company's recent growth streak. Sigma was one of the firms recently awarded by the Global Semiconductor Alliance (formerly the Fabless Semiconductor Association) for outstanding financial performance.

And if the GSA doesn't impress you, note that Sigma is trading at three times its level of a year ago.

Naturally, Broadcom's entry would cut into Sigma's numbers, Schreiner writes -- and he notes that STMicroelectronics NV (NYSE: STM) will probably get into this market, too. But it's not the end of the world; Microsoft-related wins account for 35 percent of Sigma's IPTV revenues.

Sigma's shares took an early dip today before spiking back up. By midday they were flat to slightly down.

— Craig Matsumoto, Fabless Editor, Light Reading

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