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Wed, Feb. 10, 3:08 PM
- ARM (NASDAQ:ARMH) is selling off after posting mixed Q4 results - revenue of $407.9M (+14% Y/Y) beat a $398.1M consensus, while EPS of $0.365 missed a $0.38 consensus.
- As usual, ARM didn't issue precise sales guidance: The CPU/GPU core developer only said it expects 2016 revenue to be "broadly in line with market expectations." Consensus is for revenue to rise 12% in 2016 to $1.67B.
- ARM: "Chips based on ARMv8-A [64-bit] technology are expected to continue to gain share in mobile and enterprise markets ... Increased economic uncertainty may influence consumer and enterprise spending, potentially impacting semiconductor revenues and industry confidence ... During  ARMv8-A surpassed 50% share of smartphone shipments, Mali became the industry’s highest-shipping GPU architecture, and our Partners increased their shipments into enterprise infrastructure and embedded markets."
- Fueling the Q4 sales beat: Royalty revenue rose 31% Y/Y to $216.7M, aided by growing shipments of chips with multiple and/or 64-bit ARM cores (they carry higher royalty rates). Mali GPU/video processor core growth also contributed.
- On the other hand, tech licensing revenue fell 2% to $158.5M - ARM attributes the drop to a cyclical lull between the signing of 20nm process licenses and upcoming 10nm/7nm signings. 51 processor licenses were signed, down from 53 a year ago. Software/tools revenue rose 19% to $17.3M; services revenue rose 1% to $15.4M.
- Shipments of ARM-based chips rose 16% to 4B, aided by microcontroller and mobile growth. For the whole of 2015, ARM estimates its IP was in 14.8B of the 46.5B chips shipped globally, with 6B of the ARM-based chips in mobile devices and over 5B in "embedded intelligence" applications. Industry chip shipments are expected to rise to 71B in 2020.
- ARM's board recommends a final dividend of 5.63 pence/share, up 25% Y/Y. Provided shareholders approve, the final dividend will be paid on May 13 to shareholders on record as of April 22. ARM plans to continue growing its dividend "in line with the growth of the business."
- ARM's earnings release, slides (.pdf)
Mon, Feb. 8, 12:29 PM
- Chipmakers NXP (NXPI -9.3%) and STMicroelectronics (STM -5.6%), CPU/GPU core developer ARM (ARMH -5.5%), and ad tech firm Criteo (CRTO -9%) are down sharply after European indices closed with big losses. France's CAC-40 fell 3.4%, Germany's DAX 3.3%, and the Euro Stoxx 50 3.3%. The Nasdaq is down 2.1%, and the S&P 1.8%.
- NXP has more than given back the Thursday gains seen after the company posted a Q4 beat and issued in-line Q1 guidance. Today's losses come in spite of an OTR Global note stating NXP could gain NFC chip share with Samsung's Galaxy S7 relative to the S6; the S6 heavily relied on Samsung NFC radios.
- STMicro is two weeks removed from announcing (with its Q4 report) job cuts and plans to discontinue set-top/home gateway chip R&D. ARM and Criteo report on Wednesday morning.
Mon, Feb. 8, 9:19 AM
Wed, Feb. 3, 11:13 AM
- Bloomberg reports Google (GOOG, GOOGL) is "planning to publicly give its support" for Qualcomm's (QCOM +1.4%) first ARM (ARMH +2.2%) server CPUs at an investor event next week. It adds Google and Qualcomm have cooperated on design work, and that the former will commit to using the latter's chips if they meet performance goals.
- Google is the world's biggest server buyer, and has largely relied on Intel's (INTC -4.1%) Xeon CPUs. The Web giant's adoption of Qualcomm processors, even if for only a fraction of its workload, would act as a major reference win for the fledgling ARM server CPU market. There has been speculation Amazon might also adopt ARM server CPUs, following its acquisition of chip startup Annapurna Labs (recently unveiled a line of low-end network processors).
- Qualcomm is just four months removed from showing off a prototype ARM server CPU featuring custom cores. The company has been hoping the server market will provide a long-term sales lift as it continues dealing with mobile pressures - Qualcomm's chip division (QCT) sales fell 22% Y/Y in calendar Q4 to $4.1B.
- Intel has been hoping to keep Google and other major Web/cloud clients loyal in part by providing custom Xeon CPUs, and by creating products that place Xeon chips and recently-acquired Altera's FPGAs (can be programmed on the fly to handle new algorithms/code) in the same package. Qualcomm has partnered with Altera archrival Xilinx.
- Qualcomm and ARM are higher in spite of a 1.6% Nasdaq drop. Intel is underperforming; shares are down 3.3% after accounting for the fact Intel is trading ex-dividend.
Wed, Feb. 3, 9:19 AM
Dec. 15, 2015, 7:09 PM
- GPU core developer Imagination Technologies (OTCPK:IGNMF) fell 7.8% in London today after reporting revenue of £71.1M ($106.7M, -14% Y/Y) for the May-October timeframe, and an op. loss of £7.3M ($11.1M) vs. an op. profit of £5M ($7.5M) a year ago. Both licensing and royalty revenue fell. (earnings release - .pdf)
- Imagination, which counts Apple (A-series processors), Samsung (Exynos processors), and Intel (Atom processors) among its clients, also used its earnings report to forecast its FY16 (ends April '16) op. profit will be below consensus (currently at £14.1M, per Thomson Reuters).
- CEO Hossein Yassaie blamed the numbers on weakness in both the semi industry in general and the mobile phone market in particular. "Partly it is China, but also generally phones are now good enough that people do not upgrade them as quickly as they used to." IDC has forecast smartphone shipments will grow a moderate 9.8% in 2015 to 1.43B.
- ARM (NASDAQ:ARMH), whose Mali GPU cores serve as the biggest rival for Imagination's PowerVR GPU cores (and have taken some share from Imagination), fell a modest 0.4% on a day the Nasdaq rose 0.9%.
- In addition to Imagination's report, the day saw U.K. power management chipmaker Dialog Semi (gets over half its revenue from Apple) issue a Q4 warning. Qualcomm was more positive, stating it expects calendar Q4 EPS to be "at or modestly above" the high end of prior guidance due to cost cuts and favorable 3G/4G device shipment and ASP trends.
Nov. 6, 2015, 5:38 PM
Oct. 22, 2015, 12:24 PM
- The Philadelphia Semi Index (SOXX +3%) has risen above $90 for the first time since July on a day the Nasdaq is up 1.5%. Helping out: Texas Instruments (TXN +10.4%) soundly beat Q3 estimates, reported positive growth for its analog and embedded processing (DSP/microcontroller) units in spite of a customer inventory correction, and (with the help of iPhone content gains) provided mostly above-consensus Q4 guidance.
- Meanwhile, Cypress Semi (up 4.1%) is rallying in spite of posting mixed Q3 results and issuing light Q4 guidance. A new $450M buyback is helping.
- TI/Cypress microcontroller peers NXP (NXPI +4.2%), Freescale (FSL +3.5%), STMicroelectronics (STM +2.5%), and Microchip (MCHP +2.9%) are among the gainers. As are TI analog/mixed-signal peers ON Semi (ON +5%), Intersil (ISIL +3.2%), IDT (IDTI +3.6%), Monolithic (MPWR +3.3%), and Silicon Labs (SLAB +2.6%).
- Other notable gainers include InvenSense (INVN +2.6%), Nvidia (NVDA +3.5%), Cavium (CAVM +4.4%), Knowles (KN +3.6%), and Lattice Semi (LSCC +7%).
- On its earnings call (transcript), TI mentioned automotive chip demand (boosted by growing chip content in various systems) was strong. Industrial sales were roughly flat (better than expected), and personal electronics benefited from "demand from one customer" (likely Apple). Wireless infrastructure fell 30% Y/Y (Chinese weakness), but rose Q/Q.
- Chip stocks also outperformed yesterday after Western Digital announced it's buying SanDisk, Lam Research announced it's buying KLA-Tencor, and CPU core giant ARM (ARMH +2.7%) beat Q3 revenue estimates (EPS slightly missed) with the help of a 20% Y/Y increase in ARM chip shipments to 3.6B, and stated it expects 2015 revenue to be in-line with market expectations.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 21, 2015, 9:15 AM
Oct. 21, 2015, 6:30 AM
- ARM Holdings (NASDAQ:ARMH): Q3 EPS of $0.35 misses by $0.01.
- Revenue of $375.5M (+17.3% Y/Y) beats by $2.68M.
- Shares +7.13% PM.
Sep. 4, 2015, 5:36 PM
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.
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. 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.
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
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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