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Oct. 20, 2015, 5:30 PM
Sep. 4, 2015, 5:36 PM
Sep. 3, 2015, 3:01 PM
- IBM (IBM +1.3%) is partnering with CPU core giant ARM (ARMH +1.2%) to enable devices supporting ARM's mbed IoT software/services platform to automatically register with IBM's IoT Foundation platform, and thereby access cloud-based IBM analytics services.
- IBM: "This unifies [mbed and IoT Foundation] at the point where information gathered from deployed sensors in any connected device is delivered to the cloud for analysis. The IoT connection also enables delivery of actionable events to control equipment or provide users with alerts or other information. For example, the triggering of an alarm message on a washing machine to ask the owner to confirm a breakdown engineer appointment if a fault is detected."
- With ARM's CPU cores used by billions of mobile and embedded devices (and billions more on the way), a wide variety of products can be covered. In addition to analytics tools, IBM's IoT Foundation supports the development of cloud apps (through the Bluemix platform) for analyzing IoT-generated data, and security tools for protecting it.
- ARM, meanwhile, has followed up on mbed by launching IFC, a framework for quickly creating networks of embedded, Web-connected, ARM-based devices.
Sep. 2, 2015, 9:51 AM
- [W]e think ARM’s stock is now beginning to reflect the potential of slower royalty growth in 2016 versus higher 2010-2013 growth," writes JPMorgan, upgrading ARM (NASDAQ:ARMH) to Neutral. "With ARM stock having corrected since the beginning of July, we believe the stock is discounting the impact of the smartphone correction even though consensus estimates likely remain too high.”
- The firm adds ARM - historically afforded high multiples due to its dominant position in the CPU core market - trades at 25.7x 2016E EPS, down from 35x at the beginning of the year and a peak (forward?) multiple of ~50x in 2011.
- Shares are higher as the Nasdaq posts a 1.1% gain.
Aug. 12, 2015, 12:39 PM
- "We now believe that Intel (INTC +0.9%) will capture roughly 50% of Apple’s modem business in the upcoming iPhones due to launch September 9th," writes Northland Securities' Gus Richard. "[W]e estimate that this win could represent $750M to $1.25B in revenue for Intel in . This is a marque win for Intel and would go a long way to reducing the mobile business losses."
- At the same time, Richard is concerned Alibaba plans to deploy ARM-based (ARMH -3.3%) server CPUs developed by Cavium (CAVM -1.7%), and reports hearing Amazon, Facebook, and Google are working on their own ARM server CPU designs. Major Web/cloud service providers currently rely overwhelmingly on Intel server CPUs (primarily Xeon).
- Qualcomm (QCOM -0.9%) has been the iPhone's exclusive baseband modem supplier for some time, and also sells complementary RF transceiver, power management, receive-only, and envelope-tracking ICs to Apple. VentureBeat reported in March Apple plans to use Intel modems in 2016 iPhones aimed at emerging markets.
- Qualcomm suggested last month Apple's high-end smartphone share gains were partly responsible for its soft FQ4 (calendar Q3) guidance. However, this was generally seen as a reference to the fact Apple uses home-grown app processors (the A-series) within the iPhone rather than Qualcomm's Snapdragon line. The company has dominated the 4G modem market to date, and is generally seen as having a high-end performance/power consumption edge.
- Separately, Qualcomm has unveiled its next-gen GPU core architecture, the Adreno 5xx. Qualcomm promises up to 40% improvements in performance and power draw relative to the prior-gen Adreno 430. The first GPUs based on the architecture will go into the company's upcoming Snapdragon 820 (next-gen flagship) and 620/618 (mid-range) processors.
- Intel is up modestly in spite of a 1% Nasdaq drop. Qualcomm is following markets lower.
Jul. 22, 2015, 2:22 PM
- ARM (NASDAQ:ARMH) has slumped to its lowest levels since January after posting roughly in-line Q2 results and stating it expects 2015 results to match market expectations.
- Tech licensing revenue only rose 3% Y/Y in Q2, while royalty revenue (based on Q1 shipments) rose 30% to $175.9M on the back of a 26% Y/Y increase in ARM-based chip shipments to 3.4B. Annual chip shipment growth slowed a bit from Q1's 31%.
- A record 54 processor core licenses were inked, up from 30 in Q1 and 41 a year ago. 20 of the licenses were for low-power Cortex-M CPU cores (aimed at embedded/IoT devices), 15 were for the more powerful Cortex-A, 8 for the Cortex-R (used for real-time processing), and 9 for Mali GPU cores. 7 licenses were taken out for the 64-bit ARMv8-A architecture.
- Weighing on license sales growth: No costly architectural licenses were taken out. ARM still expects "medium-term" license growth of 5%-10%.
- Software/tool revenue rose 4% Y/Y to $13.7M, and services revenue 11% to $16.5M. Operating expenses rose 13% to £99.3M ($154.9M).
- Canaccord's Matt Ramsay remains bullish: He notes backlog rose 2% Q/Q, and predicts royalty growth will remain strong thanks to "much broader contributions from higher-royalty-rate ARMv8 and big.LITTLE mobile processors and share gains in Mali graphics."
- Apple and Linear Technology's calendar Q2 reports could be contributing to ARM's selloff - many chipmakers/ARM licensees are also posting steep losses.
- Q2 results, PR, earnings slides (.pdf)
Jul. 22, 2015, 6:06 AM
- ARM Holdings (NASDAQ:ARMH): Q2 EPS of £0.07 in-line.
- Revenue of $357.1M (+15.3% Y/Y) in-line.
- Shares -2% PM.
Jul. 22, 2015, 4:14 AM
- The chief executive of ARM (NASDAQ:ARMH), the chipmaker which saw a spike in its share price this year around Apple takeover rumors, has told CNBC that remaining independent is the "right thing" for his company.
- "There are rumors all the time about us being acquired. But when you look at our business model...it's much less expensive for them to license our technology than to buy the whole company." said Simon Segars.
- The announcement came as ARM reported Q2 results. Profits came in at £124M ($193M), up 31% Y/Y, but slightly below market expectations of £126M.
Jul. 21, 2015, 5:30 PM
Jul. 8, 2015, 11:37 AM
- Chip stocks are underperforming as the Nasdaq registers a 1.2% decline. The Philadelphia Semi Index (SOXX -2.6%) is now down 13% from a June 1 peak of $101.80, and 4% YTD; it's still up 87% from a Nov. 2012 low of $47.58.
- Plunging Chinese equity markets could be weighing on the group. With retail Chinese investors having set up brokerage accounts en masse over the last year, there are plenty of concerns about the reverse wealth effect of a crash. The Economist reccently downplayed those worries, noting a relatively modest 15% of Chinese household assets are invested in stocks.
- Major decliners among chip developers include Skyworks (SWKS -4.9%), Qorvo (QRVO -5.6%), InvenSense (INVN -5.6%), NXP (NXPI -4.7%), Freescale (FSL -4%), MoSys (MOSY -9.4%), AppliedMicro (AMCC -5.1%), Cavium (CAVM -3.8%), and Silicon Motion (SIMO -6.4%). SIMO also fell yesterday after favorably adjusting its Q2 sales guidance. Skyworks and Qorvo sold off yesterday morning before rebounding in afternoon trading.
- Other names tied to the industry that are seeing heavy selling pressure include ARM (ARMH -4%), TowerJazz (TSEM -5.1%), UMC (UMC -4.4%), Veeco (VECO -4.3%), and Axcelis (ACLS -4.6%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Jun. 26, 2015, 10:26 AM
- Bernstein's Pierre Ferragu has cut ARM (NASDAQ:ARMH) to Underperform.
- The downgrade comes a day after the CPU core giant closed less than a dollar away from a 52-week high of $54.82. Shares remain up 12% YTD.
Jun. 1, 2015, 1:02 PM
- The WSJ reports ARM (ARMH -0.2%) is in talks to buy Sansa Security, an Israeli provider of a mobile/IoT security platform encompassing chip IP for a trusted code execution environment, a client software stack, server-based provisioning software, and secure apps (called Trustlets) pre-integrated with the chip IP. Sources state the deal "could close within the month and is expected to be worth between $75 million and $85 million."
- Sansa, which has been around since 2000, claims its technology ships within 150M devices/year and 55% of all high-end mobile devices. Chip partners include ARM, Intel, Qualcomm, Nvidia, and Freescale; hardware partners include Samsung, Microsoft, Lenovo, and HTC.
- Sansa's chip IP is a natural complement to ARM's CPU and GPU core offerings. The company already offers licensees its TrustZone security platform (integrates with ARM CPU cores), as well as its SecurCore security processor cores (used in smart cards, among other things).
- Prior ARM software acquisitions: Wicentric (Bluetooth), Offspark (embedded security), Sensinode (embedded Web connectivity)
May 27, 2015, 3:00 PM
- Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
- A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
- Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
- Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
May 6, 2015, 9:06 PM
- AMD has guided (.pdf) at its 2015 analyst day for 2H15 revenue to rise 15% (+/- 3%) from an expected 1H15 level of ~$2B. That implies full-year revenue of ~$4.3B, close to a $4.28B consensus.
- Gross margin is expected to be in a ~32%-34% range in 2H15 after amounting to ~32% in 1H15, and operating expenses are expected to fall to ~$680M-$700M from ~$715M. Free cash flow is expected to be negative in 1H15, and positive in 2H15.
- Long-term targets: 36%-40% GM, over $0.50/year in EPS, double-digit revenue growth from AMD's server CPU, embedded processor, and pro GPU ops, mid-single digit growth from its semi-custom (inc. console APU) and other GPU ops, and flat to down PC CPU revenue. AMD plans to use any cash in excess of $1B to retire debt (it had $906M at the end of Q1).
- AMD has also officially unveiled its 7000 Series notebook CPUs (codenamed Carrizo). The cheapest version has two 1.5GHz. cores, and a 10W max power draw.; the most powerful version had four 2.5GHz. cores, a 12-25W max power draw, and a Radeon R5 GPU. Also announced: A set of new mainstream desktop and notebook GPUs (the Radeon 300 series), and price cuts for A-series desktop CPUs (prices now range from $42-$127).
- In Q2, AMD plans to launch its first GPU to support High Bandwidth Memory (HBM); performance/watt is said to be over 3x greater than current-gen GDDR5 memory. In 2016, it plans to launch GPUs that support HBM and use a FinFET (3D transistor) process; TSMC's 16nm process is a possibility. AMD is counting on the GPUs to reverse share losses to Nvidia (NASDAQ:NVDA).
- Also launching in 2016: Zen, a next-gen CPU core said to handle 40% more instructions per clock cycle and feature a high-bandwidth/low-latency cache system. Samsung/GlobalFoundries' 14nm process is expected to be used; that would narrow Intel's (NASDAQ:INTC) manufacturing process edge, given Intel is currently at 14nm (10nm next year) and AMD at 28nm. Earlier today, SA author Alex Cho took a look at AMD's leaked 2016 Zen CPU roadmap.
- On the ARM (NASDAQ:ARMH) front, AMD is abandoning Project Skybridge, which sought to create "ambidextrous" platforms supporting either x86 or ARM CPUs. The timetable for the company's custom K12 ARM core has been pushed out from 2016 to 2017.
- AMD's analyst day slides
Apr. 29, 2015, 1:26 PM
- European tech firms Nokia (NOK -2.5%), Alcatel-Lucent (ALU -4.4%), ARM (ARMH -2.8%), and STMicroelectronics (STM -2.6%) have sold off following broad declines for continental exchanges.
- The U.K.'s FTSE 100, France's CAC 40, and Germany's Deutsche Borse have respectively fallen 1.2%, 2.6% and 3.2%, and the EURO STOXX 50 index has dropped 2.7%. Over in the U.S., the Nasdaq is down 0.9%, and the S&P 0.7%.
- The selloff has come amid a 1.5% gain for the euro against the dollar, continuing a recent rebound. The euro/dollar exchange rate is back up to 1.11. It has also coincided with sharp increases in European debt yields.
- Nokia reports earnings tomorrow morning, and merger partner Alcatel-Lucent (past deal coverage) on May 7. ARM rallied last week in response to a Q1 revenue beat driven by strong royalty growth.
Apr. 21, 2015, 2:49 PM
- ARM (NASDAQ:ARMH) is less than $1 away from a 52-week high of $54.64 after beating Q1 revenue estimates on the back of a 31% Y/Y increase in processor royalty revenue (26% excluding a one-time year-ago event) to $167.5M, a sharp acceleration from Q4's 16% growth. Physical IP royalty revenue rose 5% to $23.9M.
- Royalties were collected on the Q4 shipment of 3.8B ARM-based chips (+31% Y/Y). Both strong mobile chip sales (aided by smartphone growth and the end of an inventory correction) and a 40% increase in embedded shipments (microcontrollers and smart cards were "particularly strong") played a role.
- Licensing revenue was softer, growing only 3% to $133.2M. Processor licensing fell 2% to £109.3M; physical IP licensing grew 31% to $23.9M. 30 processor licenses were signed (5 from new clients), down from 53 in Q4 and up from 26 a year ago. ARM still expects 5%-10% annual license revenue growth "in the medium term."
- Software/tool revenue fell 9% to $14.7M; service revenue rose 6% to $15.6M. Operating expenses rose 19% Y/Y to £100M ($149M), with headcount rising 15% to 3,397. Free cash flow totaled £68.5M ($102M).
- Mobile/connectivity products made up 46% of processor shipments, embedded 34%, enterprise 14%, and home products 6%. The high-end Cortex-A CPU core series accounted for 18% of shipments, and the low-power Cortex-M 43%. 8 Cortex-A and 16 Cortex-M licenses were respectively taken out, as were Mali GPU core licenses a 1 costly architectural license.
- ARM expects Q2 revenue to be "in line with current market expectations." Royalties are expected to drop Q/Q due to seasonality.
- Q1 results, PR (.pdf), slides (.pdf)
ARM Holdings PLC designs microprocessors, physical IP and related technology and software, and sells development tools to enhance the performance and energy-efficiency of high-volume embedded applications.
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