Shares of video and pixel processing company Pixelworks have climbed over 40 percent after the company revealed a strategic relationship with Apple that contributed significantly to the company's revenue in 2013 (Via SeekingAlpha).
Pixelworks confirmed in a recent Form 10-K filed with the U.S. Securities and Exchange Commission that Apple, along with Hitachi and NEC, each accounted for more than 10 percent of the company's revenue in 2013.
Revenue attributable to our top five end customers represented 57%, 53% and 51% of revenue in 2013, 2012 and 2011, respectively. End customers include customers who purchase directly from us as well as customers who purchase products indirectly through distributors. Sales to Hitachi Ltd. represented more than 10% of revenue in each of 2013, 2012 and 2011. Sales to each of Apple Inc. and NEC Corporation represented more than 10% of revenue in 2013. Sales to Panasonic Corporation represented more than 10% of revenue in each of 2012 and 2011. Sales to Seiko Epson Corporation represented more than 10% of revenue in 2011. No other end customer accounted for more than 10% of revenue in 2013, 2012 or 2011.
It's not clear what Pixelworks is providing to Apple, but it likely involves Apple's high-resolution retina displays, which are noted in the company's 10-K filing.
Recent advancements in display manufacturing technology have allowed display manufacturers to pack an increasing number of pixels into tighter spaces. This transition was led by the mobile segment, and in particular by Apple’s “Retina” display, which set the standard for smaller screens. The resolution on display devices in all segments is increasing.
Pixelworks is known for its video display processing technology and holds over 120 patents that cover the display and processing of digital image data. The company provides display technology for digital projection systems, flat panel displays and mobile displays.