Applied Micro Telling The Same Story Over And Over Again
Applied Micro's X-Gene Proves Uncompetitive
Ashraf Eassa • 24 Comments
Ashraf Eassa • 24 Comments
The Applied Micro Circus Continues
Applied Micro's X-Gene Proves Uncompetitive
Ashraf Eassa • 24 Comments
Ashraf Eassa • 24 Comments
Applied Micro: Warning Signs Too Loud To Ignore
Ashraf Eassa • 23 Comments
Ashraf Eassa • 23 Comments
Thu, Apr. 28, 4:05 PM
Wed, Apr. 27, 5:35 PM
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Fri, Mar. 11, 1:21 PM
- Optical component vendors Fabrinet (FN +6.3%), Alliance Fiber (AFOP +3.8%), and NeoPhotonics (NPTN +4.6%) are rallying after Finisar (FNSR +18.3%) posted mixed FQ3 results, offered in-line FQ4 sales guidance and above-consensus EPS guidance, and forecast datacom sales would pick up as Web 2.0/hyperscale clients deploy 100G transceivers. Telecom chipmakers Inphi (IPHI +3.8%), Cavium (CAVM +3.9%), and AppliedMicro (AMCC +4.4%) are also doing well. The Nasdaq is up 1.3%.
- Craig-Hallum's Richard Shannon and B. Riley's Dave Kang have upgraded Finisar to Buy. Shannon thinks the FQ4 guidance suggests Finisar could be reaching a turning point, and sees 100G component adoption providing a margin boost. Kang is also upbeat about 100G sales.
- Piper's Troy Jensen (Overweight rating, target hiked by $3 to $20): "The upbeat FQ3 results and forward guidance were driven by robust demand for 100G Telco and Datacom optics. We believe telco strength continues with demand from China driving near-term upside and U.S. metro deployments will act as a tailwind in the back half of 2016 ... We also believe Finisar is one of the first to materially benefit from the 100G Datacom cycle, and expect QSFP28 [100G transceivers] to grow meaningfully for the next several quarters. We are expecting the real QSFP28 inflection to begin in 2H16, and believe this accelerated demand will be reflected in the July quarter guide."
- On the earnings call (transcript), CEO Jerry Rawls stated Chinese demand is benefiting from long-haul and wireless buildouts by the country's big-3 carriers, North American demand from metro buildouts, and broader telecom demand from sales of wavelength selective switches, ROADM line cards, and 100G/200G transceivers. He added Finisar is capacity constrained for the aforementioned products, and is building capacity to address the issue.
- Component makers rallied last month in response to good numbers from Oclaro and Fabrinet.
Wed, Mar. 9, 3:01 PM
- AppliedMicro (AMCC +5.3%) has announced Taiwanese contract manufacturer Wistron (services Facebook, and possibly other Internet giants developing their own servers) will use the company's X-Gene 1 ARM server CPU in the X5, a 5U chassis server design that's compliant with Facebook's Open Compute Project (OCP - creates open-source designs for dense/low-power data center hardware).
- The announcement coincides with the March 9-10 OCP U.S. Summit (taking place in San Jose). AppliedMicro: "The X5 is a rack-mountable server system with a 10GE backplane that can support up to five compute node trays, each with four X-Gene CPUs, for a total of 20 compute nodes per chassis. The platform can also support five storage trays with one X-Gene CPU and either ten 3.5” hard disk drive (HDD) bays or 16 2.5” HDD bays per tray, enabling either 50 or 80 HDDs in a single chassis platform configuration."
- The company has also announced a partnership with Vapor IO, a startup working on hardware architectures and management software for flexible, high-density, data center infrastructures. AppliedMicro's X-Gene 2 server CPUs will support Vapor IO's OpenDCRE data center management/monitoring API.
Thu, Jan. 28, 4:07 PM
- Applied Micro Circuits (NASDAQ:AMCC): FQ3 EPS of -$0.03 in-line.
- Revenue of $40.62M (+10.5% Y/Y) beats by $0.09M.
Wed, Jan. 27, 5:35 PM| Wed, Jan. 27, 5:35 PM | 9 Comments
Mon, Jan. 11, 9:12 AM
- Martin McDermut, the CFO of fellow telecom chipmaker Vitesse Semi (recently acquired by Microsemi) until last April, has been named AppliedMicro's (NASDAQ:AMCC) CFO.
- McDermut replaces Karen Rogge, who has served as interim CFO since August. That's when Doughlas Ahrens, AppliedMicro's last permanent CFO, left the company to join a private software firm.
Dec. 29, 2015, 2:29 PM
- Telecom chipmaker and ARM server CPU developer AppliedMicro (AMCC +6.6%) is rallying after Intel (NASDAQ:INTC) M&A chief Wendell Brooks signaled more deals are likely following yesterday's closing of Intel's $16.7B purchase of FPGA developer Altera. As are telecom and data center analog/mixed-signal chipmaker InPhi (IPHI +4.2%) and FPGA/CPLD developer Lattice Semi (LSCC +7.7%).
- Brooks: "We are looking for adjacencies where we can bring our [manufacturing] process advantage to bear. Altera is a great first acquisition ... We’re doing things very differently than we have in the past ... The market very much rewards companies like Avago that are leading the charge. I think the impetus will continue."
- AppliedMicro has long been the subject of M&A speculation. Meanwhile, Lattice CEO Darin Billerbeck suggested in June his company is open to a sale.
- Of note: AppliedMicro and Lattice's shares have often made big moves in the past in the absence of major news, and all three companies have betas well above 1.
Nov. 20, 2015, 12:06 PM
- JMP's Alex Gauna has upgraded Intel (INTC +1.6%) to Outperform and set a $45 target a day after the chip giant guided at its 2015 investor meeting for mid-single digit 2016 revenue growth, hiked its dividend by $0.02/share, and set a $10B 2016 capex budget. Shares are close to their highest levels since January.
- During his presentation (.pdf), CFO Stacy Smith guide for mid-teens Data Center Group (DCG, server CPUs/network processors) 2016 revenue growth, in-line with the 4-year CAGR forecast Intel provided last year (aided by Altera?). The Client Computing Group (CCG, PC/mobile CPUs) is expected to see flat to low-single digit sales growth, with low-double digit op. profit growth due to improved mobile CPU profitability.
- Gross margin is expected to benefit from higher ASPs, and be pressured by 3D XPoint investments and 10nm start-up costs. Notably, Intel expects only 1/3 of 2016 DCG revenue to come from traditional enterprise server sales. 1/3 are expected to come from cloud service providers (Amazon, Google, Facebook, etc.), and 1/3 from HPC, workstation, networking, and storage systems. The CCG outlook assumes a slight decline in PC unit sales.
- Sterne Agee's Doug Freedman (Buy): "INTC highlighted non-consumer group segments make up 40% of total revenue in 2015 while contributing 65% of the operating profit ... Management noted the ongoing weakness in traditional enterprise market but continued to expect strong growth to be driven by robust demands in cloud service provider and high performance computing."
- Freedman considers capex guidance better than feared. As does Cowen's Tim Arcuri (Market Perform), who also thinks gross margin guidance is conservative.
- Roth's Krishna Shankar (Buy) is a little worried about the traction seen by ARM server CPU vendors AppliedMicro (AMCC -0.4%) and Cavium (CAVM -1.1%). "Beyond 2015, we believe that Intel’s quasi-monopoly in high-margin servers (95% market share in server platforms) may be challenged by new low-power ARM-based server platforms for the high growth cloud services, social networking/video-delivery market." Raymond James' Hans Mosesmann (Underperform) states CEO Brian Krzanich admitted Intel's server CPU forecast accounts for share "degradation."
- SA author Bruce Burnworth is upbeat about DCG's growth outlook. Among other things, he notes Intel respectively sees $5B and $1.6B 2020 addressable markets for silicon photonics and Omni-Path, and a major opportunity to grow networking sales as carriers adopt network functions virtualization (NFV, involves migrating networking functions to software running on commodity hardware).
- Intel's investor meeting presentations
- Update: Some more Intel news: The company has named Murthy Renduchintala, until recently co-president of Qualcomm's chip units (QCT), the president of a newly-formed client and IoT businesses and systems architecture group. The new unit "brings together Intel's Platform Engineering, Client Computing, IoT, Software and Services, and Design & Technology Solutions groups."
Nov. 17, 2015, 3:06 PM
- Drexel Hamilton has launched coverage on AppliedMicro (NASDAQ:AMCC) with a Buy rating an $11 target. Shares are back above $7.
- The launch comes a day after AppliedMicro unveiled the X-Gene 3, the latest entry for its ARM server CPU line - it features 32 cores operating at up to 3GHz, relies on TSMC's recently-launched 16nm FinFET manufacturing process, and is expected to begin sampling in 2H16.
- The company also announced a high-speed interconnect technology called X-Tend, which is promised to connect multiple X-Gene CPUs with large memory pools at low latencies, and a partnership with Italian custom server OEM E4 Computer Engineering to bring X-Gene-based systems to market.
Nov. 3, 2015, 2:46 PM
- After slightly beating FQ2 revenue estimates and posting in-line EPS, AppliedMicro (NASDAQ:AMCC) guided on its earnings call (transcript) for FQ3 revenue of $40.5M (+/- $2M) and EPS of -$0.03 (+/- $0.02) vs. a consensus of $40.7M and -$0.03. With various chipmakers having issued soft Q4 guidance, markets appear to be breathing a sigh of relief.
- CEO Paramesh Gopi noted book-to-bill was above 1, and that backlog currently covers over 95% of FQ3 sales guidance. "Multiple new engagements" are said to have been secured for AppliedMicro's X-Gene ARM server CPUs since the July 30 earnings call, with "very strong traction" reported for China (China Unicom is a client). Meanwhile, the company's X-Weave PHY chips are "the sole source 100 gigabit and 400 gigabit high-density secure physical layer solution for the industry's leading switch vendor" (presumably Cisco).
- Financials: Gross margin (non-GAAP) fell to 55.6% from 57% a year ago. Job cuts helped operating expenses drop 12% to $25M. AppliedMicro ended FQ2 with $75.5M in cash, and no debt.
- FQ2 results, PR
Nov. 2, 2015, 4:08 PM
- Applied Micro Circuits (NASDAQ:AMCC): FQ2 EPS of -$0.03 in-line.
- Revenue of $39.7M (-3.0% Y/Y) beats by $0.57M.
Nov. 1, 2015, 5:35 PM
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Oct. 14, 2015, 3:10 PM
- Though still well below its May/June highs, the Philadelphia Semi Index (SOXX +2.9%) has reached its highest levels since August following calendar Q3 results from Intel, Linear Technology, and ASML, and reports SanDisk and Fairchild are in buyout talks with potential suitors (respectively Micron/Western Digital and ON Semi/Infineon). The Nasdaq is down slightly.
- Intel (up 1.5%) beat Q3 estimates and provided in-line Q4 guidance. ASP strength and signs of stabilizing PC demand are overshadowing a full-year guidance cut for Intel's server CPU division, Linear (up 4.6%) posted mixed FQ1 results and issued above-consensus FQ2 guidance.
- Lithography equipment giant ASML (ASML -0.4%) beat Q3 EPS estimates and posted nearly in-line sales, but also guided for Q4 revenue of €1.4B ($1.61B), below a $1.77B consensus. Soft demand from foundry clients is blamed. Credit Suisse and Cowen argue ASML is hurt by a lack of exposure to the 3D NAND flash ramp.
- Aside from Linear and companies associated with the SanDisk/Fairchild reports, chipmakers seeing big gains include NXP (NXPI +4.6%), Freescale (FSL +3.6%), Himax (HIMX +4.2%), Qorvo (QRVO +4.9%), Cypress (CY +6.9%), AppliedMicro (AMCC +4.9%), and Linear/Fairchild peers Semtech (SMTC +4.7%), MangaChip (MX +4.6%), Diodes (DIOD +4%), and Power Integrations (POWI +4.2%). Chip packaging/testing firms ChipMOS (IMOS +3.8%) and Amkor (AMKR +5.9%) are also rallying.
- With much already priced in, chip equipment makers are also doing well, in spite of ASML's guidance, a fresh $400M cut to Intel's 2015 capex budget (to $7.3B), and a Gartner forecast for global wafer fab equipment spend to drop 0.5% in 2015 and 2.5% in 2016 before returning to growth.
- Chip equipment gainers include Lam Research (LRCX +3.6%), KLA-Tencor (KLAC +1.6%), Kulicke & Soffa (KLIC +3.3%), and Teradyne (TER +1.9%). Possibly helping: Intel stated on its earnings call its capex will rise in 2016 from 2015's depressed levels.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 8, 2015, 8:35 PM
- 11 months after announcing it plans to enter the ARM server CPU market, Qualcomm (NASDAQ:QCOM) says it has begun sampling to "tier-1 data centers" (possibilities include Amazon, Google, and Facebook) a development platform featuring a pre-production version of a 24-core CPU.
- Details are limited for now, though Qualcomm does state it's using custom ARM cores, as it does for many Snapdragon mobile processors. It also promises an upcoming server CPU "will be competitive in performance and price with current and future Intel (NASDAQ:INTC) chips," and that it will arrive "sooner rather than later" (no specific ETA is provided).
- AppliedMicro (NASDAQ:AMCC) and Cavium (NASDAQ:CAVM) are early leaders in the budding market for ARM server CPUs. Others in the space include AMD, Texas Instruments, and Marvell. Various Web/cloud service providers have shown interest in deploying the chips. But for now, they generally continue buying Intel Xeon CPUs by the thousands.
- Also: Qualcomm is partnering with FPGA vendor Xilinx (NASDAQ:XLNX) to create systems that pair Qualcomm server CPUs with Xilinx FPGAs to provide workload acceleration. Intel is doing something similar with Xilinx archrival Altera, which it's in the process of acquiring.
- A partnership has also been formed with InfiniBand/Ethernet connectivity hardware and chip developer Mellanox (NASDAQ:MLNX). Mellanox's 10-100G InfiniBand and Ethernet gear will be optimized for Qualcomm's CPUs.
Sep. 30, 2015, 10:25 AM
- Mellanox (MLNX -7.3%) has sold off after announcing it's buying network processor (NPU) vendor and Israeli tech peer EZchip (EZCH +14.3%) for $811M in cash. Meanwhile, telecom/data center chipmakers Cavium (CAVM +3.5%), AppliedMicro (AMCC +4.1%), and PMC-Sierra (PMCS +7.9%) are rallying amid a 2% Nasdaq gain - each company's product line includes (but is by no means limited to) NPUs.
- Whereas Mellanox is focused on high-speed data center connectivity hardware (e.g. adapter cards, switches, switching and adapter ICs), EZchip still gets the majority of its revenue from NPUs going into edge routers and other telecom hardware. However, the company has been trying to expand its data center footprint, via its new NPS processor line (supports deeper packet analysis) and its Tilera unit (acquired in 2014, set to launch a processor supporting 100 ARM cores).
- Mellanox asserts EZchip's "products and expertise in security, deep packet inspection, video, and storage processing" will help it "deliver complete end-to-end, intelligent 10, 25, 40, 50, and 100Gb/s interconnect and processing solutions for advanced data center and [telecom] edge platforms." The purchase price is equal to 5.9x EZchip's 2016 sales consensus; Mellanox trades for just 2.3x 2016E sales.
- Update: Summit Research's Srini Nandury thinks Mellanox's selloff stems from the company's failure to reiterate Q3 guidance during today's conference call, in spite of repeatedly being asked by analysts to do so.
Applied Micro Circuits Corp. engages in the business of providing silicon solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long haul communications equipment. Its products include the X-Gene ARM 64-bit Server on a Chip... More
Industry: Semiconductor - Integrated Circuits
Country: United States
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