Seeking Alpha

Beaten-down chip stocks are rallying (SOXX +2.9%) thanks to pleasing reports from Broadcom,...

Beaten-down chip stocks are rallying (SOXX +2.9%) thanks to pleasing reports from Broadcom, STMicroelectronics, Altera, and others. Interestingly, many Apple (AAPL -4%) suppliers, off initially on the FQ3 miss, are also gaining - even Cirrus Logic (CRUS +3.5%), which has 60%+ exposure. Two possible implications: the Street thinks Samsung will make up for any iShortfall, and/or it's less bothered by Apple's iPhone shipments per se than its margin and ASP declines. (more on AAPL)
Comments (3)
  • Well no it's nit that o-lame one. Apple is selling as many iPads as they can make, so there is still upside in that area. You are suggesting that there is one-to-one overlap in suppliers and that isn't the case at all.
    25 Jul 2012, 02:34 PM Reply Like
  • AAPL is about 1/4th of the global smartphone market. So shares of component makers should not drop by a similar percentage as AAPL shares have dropped.

     

    http://seekingalpha.co...

     

    Even when looking at some of these companies, they are not heavily dependent upon Apple for revenues. As long as the smartphone market continues to expand, several component makers should continue to increase revenues.
    25 Jul 2012, 03:20 PM Reply Like
  • It's all about the impact on profits. A 5% drop in sales due to Apple order cuts can have a much bigger bottom-line impact, given all the fixed costs chip companies have.
    25 Jul 2012, 03:40 PM Reply Like
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