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Apr. 6, 2015, 3:15 PM
- Today's notable tech gainers include German 3D printer maker Voxeljet (VJET +5.6%), Chinese online real estate firm SouFun (SFUN +5.3%), software outsourcing firm EPAM Systems (EPAM +8.4%), voice processor developer Audience (ADNC +6.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +4.9%), #2 Chinese online travel firm Qunar (QUNR +6.7%), and international e-commerce services firm Borderfree (BRDR +7.2%). The Nasdaq is up 0.7%.
- Notable decliners include FPGA maker Altera (ALTR -4.5%), optical component vendor NeoPhotonics (NPTN -11%), big data/analytics software provider Hortonworks (HDP -4%), and online family care marketplace Care.com (CRCM -4.4%).
- EPAM has joined other Russia-exposed names in rallying, as oil prices and the ruble both move higher. Sigma is reversing Thursday's post-earnings losses. Qunar has surged to new highs yet again, and is now up 58% since its March 16 Q4 report.
- Altera is returning some of the huge March 27 gains it saw on reports of Intel buyout talks. NeoPhotonics, a recent high-flyer, is down 15% over the last 2 trading days; on Friday, the company filed an 8-K making customary exec. compensation disclosures.
- Previously covered: GoPro, Sony, Geospace, SanDisk, Voltari, VMware, Resonant, 500.com
Mar. 30, 2015, 11:37 AM
- After rising 28.4% on Friday on reports Intel (INTC -0.3%) is in talks to buy the company, Altera (ALTR -3.8%) is paring its gains in response to downgrades from CLSA, Morgan Stanley, and Macquarie. Morgan Stanley has also downgraded Xilinx (XLNX +0.3%), which rose 5.8% on the reports.
- Reactions to the reports, which vindicate at least a few predictions, have been largely positive. Among the perceived benefits to Intel from a deal: 1) Cost synergies from handling the manufacturing of Altera's FPGAs in-house. 2) Lowering Intel's PC dependence amid soft industry demand. 3) The potential to better cater to the likes of Facebook and Google (and keep ARM rivals at bay) by creating Xeon server CPUs with built-in FPGA circuitry to accelerate algorithm performance. 4) The potential to create system-level solutions for servers, telecom infrastructure gear, and other products that combine processors, FPGAs, and other chips.
- CLSA: "[W]e view a potential Altera deal favorably given the manufacturing and end-market synergies ... Altera’s strong base station presence is valuable to Intel ... we see $0.05-0.10 accretion to our 2016 EPS, and additional accretion down the road as manufacturing moves in house."
- Cowen: "[W]e surmise the deal would be heavily debt financed ... ALTR is one of the only semiconductor companies with better gross margin than INTC ... PLDs are one of the only verticals requiring leading-edge silicon in which INTC does not compete."
- Though upgrading Altera to Market Perform, Wiliam Blair is more cautious. "[W]e believe Altera’s fundamentals have deteriorated as the company has faced multiple headwinds. These include market share loss to Xilinx, declining margins, delays in new product ramp-ups, and competitive issues ... On top of this, we believe Altera (as well as Xilinx) has been negatively affected by the increased adoption of SoC solutions, resulting in decreased demand for FPGAs for Glue Logic functions." Bernstein (still bearish on Intel) notes Altera's revenue is only equal to 3% of Intel's.
- If a deal happens, many think Xilinx will be acquired soon afterwards. The short list of chipmakers big enough to swallow Xilinx ($11.1B market cap) and arguably having complementary products includes Texas Instruments, Qualcomm, Analog Devices, NXP/Freescale (about to merge), Skyworks, and Avago. There's also some speculation Intel, which has sat out the chip industry's recent M&A wave, will follow up on an Altera deal by making other purchases to lower its PC exposure.
Mar. 27, 2015, 3:47 PM
- The WSJ reports Intel (INTC +5.9%) is in talks to buy FPGA vendor/foundry partner Altera (ALTR +22.7%). Shares of both companies have surged in response. With Altera currently sporting a $12.7B market cap, the deal would be the biggest in Intel's history, and one of the biggest in the chip industry's M&A/consolidation wave.
- Intel struck a foundry deal with Altera in 2013, and is set to produce 14nm chips for the company. Altera's FPGAs are found in plenty of products containing Intel's Xeon server CPUs or network processors. The companies have also collaborated on a solution for Web data centers that pairs a Xeon CPU and an Altera FPGA in the same package, with the latter enabling on-the-fly programmability.
- Altera archrival Xilinx (XLNX +5%) and smaller rival Lattice (LSCC +3.7%) have also spiked higher.
- Update (4:00PM ET): The full story is now out. The WSJ states deal terms and timing are unknown.
- Update 2 (4:08PM): Bloomberg has joined the WSJ in reporting of deal talks. Intel closed up 6.4%, and Altera closed up 28.4%.
Jan. 22, 2015, 4:57 PM
- Altera (NASDAQ:ALTR) expects Q1 revenue to be flat to down 4% Q/Q. That implies a range of $460.7M-$479.9M, below a $486.3M consensus.
- Networking, computer, & storage revenue (16% of total) was a weak spot in Q4, falling 3% Q/Q and 11% Y/Y. Telecom & wireless revenue (42% of total, hurt by soft wireline capex, boosted by the Chinese 4G buildout) was down 11% Q/Q but up 10% Y/Y. Industrial automation, military, and automotive was up 2% Q/Q and 7% Y/Y.
- $151.5M was spent on buybacks, helping EPS beat estimates in spite of a revenue miss. Also helping: GAAP opex fell 1% Y/Y to $190.8M, thanks to a 4% drop in R&D spend to $107.3M. Gross margin fell 180 bps Q/Q and 330 bps Y/Y to 65%, and is expected to be around 65% in Q1.
- The company is "entering the advanced stages of design" for its high-end Stratix 10 FPGAs, which will be made using Intel's cutting-edge 14nm FinFET manufacturing process.
- Altera has fallen to $33.54 in AH trading. Shares rose 1.3% in regular trading, after opening lower in response to Xilinx's numbers.
- Q4 results, PR
Jan. 22, 2015, 4:21 PM
- Altera (NASDAQ:ALTR): Q4 EPS of $0.36 beats by $0.01.
- Revenue of $479.87M (+5.6% Y/Y) misses by $0.61M.
- Shares -5.57% AH.
Jan. 21, 2015, 5:35 PM
Jan. 21, 2015, 5:31 PM
- On top of missing FQ3 revenue estimates (while beating slightly on EPS), Xilinx (NASDAQ:XLNX) is guiding for FQ4 revenue to be down 2%-6% Q/Q. That implies a range of $557.9M-$581.6M, well below a $635.4M consensus.
- The FPGA vendor blames its FQ3 revenue miss on weak broadcast and telecom market sales. Many chipmakers and optical component vendors have seen telecom-related sells pressured by soft industry capex.
- Gross margin was 69.7%, -220 bps Q/Q but +50 bps Y/Y and above guidance of 69%. That contributed to the EPS beat, as did $175M worth of buybacks. GAAP opex rose 10% Y/Y to $223.9M, exceeding revenue growth of 1%.
- Segment performance: Telecom & data center revenue (41% of total) -7% Y/Y. Industrial, aerospace, & defense (43% of revenue) +18%. Broadcast, consumer, and automotive (14% of revenue) -9%. Everything else (2% of revenue) -39%. 28nm chip sales rose nearly 20% Q/Q.
- Altera (NASDAQ:ALTR) is following Xilinx lower. Its Q4 report arrives tomorrow afternoon.
- FQ3 results, PR
Jan. 20, 2015, 6:28 PM
- Altera (NASDAQ:ALTR) will report Q4 results after the close on Thursday, January 22. The conference call will begin at 4.45 pm ET.
- Consensus views are for EPS of $0.35 and revenue of $480.48M (+5.7% Y/Y).
Jan. 14, 2015, 12:24 PM
- JPMorgan has downgraded FPGA archrivals Altera (ALTR -3.4%) and Xilinx (XLNX -1.3%), as well as chip IP licensing firm Rambus (RMBS -2.4%), to Neutral. Xilinx has also been downgraded to Sector Perform by Pac Crest.
- Xilinx reports on Jan. 21, and Altera on Jan. 22. Given history, Rambus' calendar Q4 report should also arrive this month.
Dec. 30, 2014, 6:05 PM
- French carrier Iliad's (OTC:ILIAF) Online.net unit plans to launch a cloud infrastructure service next month that runs on servers featuring ARM-based (NASDAQ:ARMH) CPUs supplied by Marvell (NASDAQ:MRVL). Making good on ARM's promise of high densities, 18 servers - each sporting one quad-core CPU - can fit onto a blade, and 16 blades can fit within a chassis.
- Though it's no Google or Amazon, Iliad provides a useful reference win for ARM server CPU vendors as they try to take share from Intel (NASDAQ:INTC), whose Xeon CPUs claim the lion's share of the server market, including most Web/cloud data center deployments.
- Canaccord has forecast ARM server CPUs, still in their infancy, will grab a 20% share by 2018. Hyperscale data centers and application-specific server appliances are seen as areas where ARM-based solutions could stand out.
- Intel is looking to head off the ARM threat both by developing low-power Atom server CPUs, maintaining a manufacturing process edge, and (notably) providing a variety of custom CPUs to Internet giants such as Amazon, Google, Facebook, and eBay; the latest offerings are packaged with Altera (NASDAQ:ALTR) FPGAs to provide on-the-fly programmability.
- Nonetheless, Facebook's Open Compute Project supports both ARM and x86 CPUs, and Google has been reported to be thinking of building its own ARM chip. An Amazon VP recently stated ARM vendors aren't keeping pace with Intel. But Amazon might simply be opting to create its own ARM designs, given it has hired several key engineers from defunct ARM vendor Calxeda.
- Cavium (NASDAQ:CAVM) and AppliedMicro (NASDAQ:AMCC) are often viewed as ARM server CPU plays. AMD, Qualcomm, and Texas Instruments are also competing in this space.
Dec. 19, 2014, 9:26 AM
- BofA/Merrill has respectively downgraded analog/mixed-signal chipmakers Maxim (NASDAQ:MXIM) and Linear (NASDAQ:LLTC) to Underperform and Neutral, and FPGA vendor Xilinx (NASDAQ:XLNX) to Underperform. In addition, Goldman has cut Maxim to Neutral.
- Maxim, Linear, and Xilinx have all underperformed the broader chip industry this year. Maxim has seen its mobile sales hit hard by Samsung's woes; Xilinx has been pressured by soft telecom capex.
- Yesterday afternoon, Xilinx announced its 20nm mid-range Kintex FPGAs had entered mass-production, and claimed they were the first FPGAs to do so, thereby beating Altera (NASDAQ:ALTR) to the punch.
- While Xilinx plans to sell both mid-range and high-end 20nm FPGAs, Altera only plans to offer mid-range 20nm parts, and focus its high-end efforts on Intel's cutting-edge 14nm process. Intel/Altera demoed 14nm test chips in April.
- MXIM -2.2% premarket. LLTC -0.8%. XLNX -0.8%.
- Update: BofA has also downgraded Altera to Neutral, and Atmel to Underperform.
Nov. 26, 2014, 2:52 PM
- Chip stocks are outperforming after Analog Devices (ADI +5.2%) beat FQ4 estimates and offered in-line FQ1 guidance. The Philadelphia Semi Index (SOXX +1.9%) has made new highs.
- Notable gainers include many analog/mixed-signal and telecom IC firms: TXN +3%. LLTC +2.7%. SMTC +3.1%. ISIL +3.3%. SWKS +3.7%. AVGO +2.9%. OVTI +3.2%. FSL +3.1%. EZCH +2.5%. XLNX +2.3%. ALTR +2.1%. MX +4.3%. PMCS +2.7%. BRCM +2%.
- On its CC (transcript), ADI noted its telecom equipment chip sales are holding up well in spite of weak capex, aided by the fact its dollar content for 4G base stations is "at least 20% to 30% better" than for 3G base stations. The company also mentioned its lead times were stable in FQ4.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 23, 2014, 8:50 PM
- Though it beat Q3 estimates, Altera (NASDAQ:ALTR) is guiding for Q4 revenue to be down 2%-6% Q/Q. That implies a range of $469.6M-$489.6M ($479.6M midpoint) vs. a $485.7M consensus.
- Q3 gross margin was 66.8%, down from 67% in Q2 and 68.3% a year ago. Q4 GM guidance is at 66%-67%.
- With the help of strong orders from 4G mobile infrastructure clients (particularly from China), telecom/wireless chip sales (45% of revenue) rose 23% Y/Y in Q3. Industrial automation, military & auto +3%; networking, computer, and storage -5%; everything else +18%. FPGAs were 85% of revenue, up from 82% a year ago.
- GAAP opex +9% Y/Y to $192.3M. $144.2M was spent on buybacks.
- Shares had rallied after Xilinx posted an FQ2 beat a week ago.
- Q3 results, PR
Oct. 23, 2014, 4:21 PM
- Altera (NASDAQ:ALTR): Q3 EPS of $0.38 beats by $0.01.
- Revenue of $499.6M (+12.0% Y/Y) beats by $8.19M.
- Shares -2.2%.
Oct. 22, 2014, 5:35 PM
- ADES, ALGN, ALTR, AMZN, BAS, BJRI, BLDR, BMRN, CB, CBI, CERN, CLMS, CLNE, CNMD, CPWR, CTCT, CYN, DECK, DLB, DV, ECHO, ELY, EW, FET, FII, FLS, FSL, GHL, GIMO, HBHC, HUBG, HWAY, IM, INFA, JNPR, KLAC, LOGM, LSCC, MSFT, MTSN, MXIM, MXWL, N, NCR, NTGR, OLN, P, PACB, PCCC, PDFS, PEB, PFG, PFPT, POL, QLIK, RMD, RUBI, RVBD, SHOR, SIVB, SPNC, SRCL, SWFT, SWN, SYNA, VMI, VRSN, WOOF, WRB, WRE, WRI
Oct. 16, 2014, 4:42 PM
- Xilinx (NASDAQ:XLNX) expects FQ3 revenue to be flat to up 4% Q/Q. While the midpoint of the implied range ($604.3M-$628.5M) is below a $623.1M consensus, expectations were low following Microchip's warning (Cypress can relate).
- Telecom & data center revenue (hurt by weak wireline telecom capex) -19% Q/Q and -4% Y/Y in FQ2. But industrial, aerospace, & defense +28% Q/Q and +8% Y/Y. Broadcast, consumer, & auto -5% Q/Q and -6% Y/Y. Everything else -4% Q/Q and +12% Y/Y.
- Gross margin was 71.9%, +280 bps Q/Q and above guidance of 70%. Xilinx expects GM to fall to ~69% in FQ3.
- $200M was spent on buybacks, providing a lift to EPS. R&D spend +11% Y/Y to $138.4M; SG&A -3% to $93.9M.
- Archrival Altera (NASDAQ:ALTR) is following Xilinx higher. Its Q3 report arrives on Oct. 23.
- FQ2 results, PR
Altera Corp designs and sells programmable logic devices, HardCopy application-specific integrated circuit devices, power system-on-chip devices, pre-defined design building blocks known as intellectual property cores, and associated development tools.
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