Mon, Jan. 4, 3:54 PM
- Intel (INTC -1.8%) is buying Ascending Technologies, a German maker of professional/civil and research-oriented drone lines. Terms are undisclosed.
- The chip giant declares Ascending owns "best-in-class drone auto-pilot software and algorithms." Exec Josh Walden: "We’ve already partnered to combine Ascending Technologies’ sense-and-avoid algorithms with Intel™ RealSense technology’s real-time depth-sensing capability. Together, these technologies can, among other things, improve drone safety – helping them avoid obstacles and collisions. With Ascending Technologies, Intel gains expertise and technology to accelerate the deployment of Intel RealSense technology into the fast growing drone market segment."
- The purchase comes five months after Intel announced a $60M+ investment in Chinese drone maker Yuneec. The company has also invested in drone OEMs Airwave and PrecisionHawk, as it squares off against Qualcomm, Nvidia, and early market leader Ambarella in the drone processor market. Both Qualcomm's Snapdragon Flight and Nvidia's Jetson TX1 platforms promise a measure of autonomous navigation support for drones.
- Intel isn't a stranger to buying hardware firms for their technology and/or to help provide reference hardware platforms for OEM partners. Heads-up display maker Recon Instruments was acquired last year.
Mon, Jan. 4, 9:03 AM| Mon, Jan. 4, 9:03 AM | 2 Comments
- December monthly performance was: -1.18%
- 52-week performance vs. the S&P 500 is: -1%
- $0.10 in dividends were paid in December
- Top 10 Holdings as of 11/30/2015: Exxon Mobil Corporation (XOM): 4.98%, Microsoft Corp (MSFT): 4.49%, Apple Inc (AAPL): 4.18%, Altria Group Inc (MO): 3.37%, McDonald's Corp (MCD): 2.94%, PepsiCo Inc (PEP): 2.93%, Home Depot Inc (HD): 2.4%, Intel Corp (INTC): 2.31%, International Business Machines Corp (IBM): 2.02%, AbbVie Inc (ABBV): 1.96%
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.
Dec. 29, 2015, 2:18 AM
- Intel's (NASDAQ:INTC) $16.7B purchase of chipmaker Altera is likely to be a model for future big acquisitions at the company as the semiconductor industry's merger boom continues, according to Intel's chief dealmaker.
- "We're doing things very differently than we have in the past," Wendell Brooks said, noting that the firm was looking beyond its traditional reliance on in-house development.
- The Altera acquisition, for example, is intended to strengthen Intel's position in the data center market and the Internet of Things, as it tries to break its dependence on PCs.
- Previously: Intel closes Altera deal, promotes VP to lead unit (updated) (Dec. 28 2015)
Dec. 28, 2015, 10:08 AM
- Intel's (INTC -0.5%) $16.7B purchase of FPGA developer Altera (ALTR) is officially on the books. As previously announced, Intel expects the deal to be accretive to non-GAAP EPS and cash flow in its first year after closing, and dilutive to GAAP EPS due to M&A-related costs.
- Altera will now operate as Intel's Programmable Solutions Group (PSG). Notably, PSG won't be led by Altera CEO John Daane (has a large golden parachute), but by Dan McNamara, previously the GM of Altera's embedded products division. McNamara's name doesn't currently appear on Altera's executive bio page.
- Intel promises Altera/PSG will work with Intel's Data Center Group (server CPUs/network processors) and IoT Group (embedded CPUs and related products) to deliver "highly customized, integrated products and solutions." The company promised last month solutions pairing Xeon CPUs with Altera FPGAs will arrive in Q1, while estimating FPGAs will go into 30% of data center servers by 2020.
- Last week: Chinese regulators approve Intel/Altera deal
- Update: Deutsche's Ross Seymore estimates Altera will account for ~3% of Intel's 2016 revenue, and ~9% of DCG revenue. His Intel target has been upped by $1 to $37. "We now estimate Intel’s DCG revs to grow +21% y/y, up from +10% y/y previously as ALTR accounts for ~53% of y/y DCG rev growth. We model 2016 gross margins to benefit slightly (62.4% from prior DBe 62.2%) with opex increasing +2.7% from prior DBe to $20.9b ($20.4b previously). Our resulting 2016 EPS goes to $2.40 from $2.35 previously."
Dec. 23, 2015, 7:16 PM
- Intel's (NASDAQ:INTC) November hiring of Qualcomm vet Murthy Renduchintala to head a new and massive Client and Internet of Things Businesses and Systems Architecture Group is just one of many noteworthy recent hires of outsiders, observes long-time chip analyst and Linley Group chief Linley Gwennap.
- Renduchintala's arrival was preceded by the 2014 hiring of Amir Faintuch, previously the head of Qualcomm's Atheros Wi-Fi chip unit, to head Intel's Platform Engineering Group (handles chip R&D). Gwennap notes Faintuch, who once more reports to Renduchintala, has "already brought in other outsiders such as Anwar Awad (from Synopsys), Amit Baruch (Samsung), Shawn Covell (Qualcomm), Mark Davis (Via Telecom), Charlie Matar (AMD), Ari Rauch (AMD), and Howard Wright (Qualcomm) to hold VP-level positions."
- He sees the hiring spree potentially changing a "not invented here" culture at Intel, and in doing so shortening chip development cycles and improving Intel's ability to go after non-core markets. A greater willingness to use ARM CPU cores (previously strongly discouraged by management) is also deemed a possibility.
- Gwennap cautions such a management/culture shakeup can be disruptive and alienate employees if not handled well. "The key is for the new managers to recognize Intel’s many strengths, including industry-leading IC technology, excellent engineers, and a broad IP portfolio. If they can harness these strengths while improving workflow and accelerating development time, Intel will have a better chance at winning in new markets."
- Five months ago: Intel president James, three other execs leaving
Dec. 21, 2015, 11:52 AM
- China's Ministry of Commerce (MOFCOM) has signed off on Intel's (INTC - unchanged) purchase of Altera (ALTR +2%), thus providing the final regulatory clearance needed for the $16.7B ($54/share) all-cash deal to go through. (8-K filing)
- The acquisition is now expected to close "on or about" Dec. 28. Altera has risen to within $0.09 of Intel's buyout price.
- Two months ago: EU regulators approve Intel/Altera deal
Dec. 9, 2015, 11:32 AM
- Believing 2016 will be a strong year for server CPU sales and (curiously) viewing this year's moderate share decline in spite of a spate of bad news as a positive, Nomura's Romit Shah has upgraded Intel (INTC +0.6%) to Buy, and hiked his target by $9 to $42.
- Shah: "We find it remarkable that Intel is down less than 10% YTD (vs. PC supply chain incl. HDDs/ODMs/Memory down 30%+), considering that the company missed significantly on Q1 revenues (~$1bn light vs. original guidance), pushed out 10nm in Q2, and lowered guidance on DCG in Q4. We think the market is telling us that Intel is a survivor."
- He sees industry-wide Internet capex growing 18% in 2016 after rising a subdued 6% in 2015, and notes the cloud revenue contribution for Intel's Data Center Group (DCG - server CPUs, network processors, and soon FPGAs) has risen to 33% from 20% in 2013. Shah's 2016 EPS estimate has been raised by $0.21 to $2.51 (above a $2.37 consensus) to account for DCG's organic growth, the Altera deal, and an extra week.
- Last month, Intel popped after providing healthy 2016 guidance at its analyst day. DCG is expected to see mid-teens 2016 revenue growth, in-line with the 4-year CAGR forecast provided by Intel last year.
Dec. 8, 2015, 3:18 PM
- It's been a rough run for value stocks over the past few years, but the metric used to determine value - price/book - may not be the right one, says Citi's Robert Buckland. Free-cash-flow yield is better, he argues. noting this metric tracked traditional value in the 1990s and 2000s, but has easily outperformed over the past decade.
- It's a sign of the times, he says, as FCF is a "capex-suspicious metric," and investors are concerned about the economic outlook, and cynical about capital allocation decisions of managements.
- The list of 28 U.S. value (as defined by FCF yield) plays: BHI, VIAB, WFM, ANTM, HPQ, ABC, LBTYA, M, AAPL, CTL, XRX, LYB, CMI, ETN, MRK, VLO, CSCO, WRK, IBM, LVS, ESRX, IP, CAH, ADM, INTC, CAT, ABBV, EMN
Dec. 1, 2015, 9:27 AM| Dec. 1, 2015, 9:27 AM
- November monthly performance was: +0.59%
- 52-week performance vs. the S&P 500 is: -1%
- $0.06 in dividends were paid in November
- Top 10 Holdings as of 10/30/2015: Exxon Mobil Corporation (XOM): 5.02%, Microsoft Corp (MSFT): 4.33%, Apple Inc (AAPL): 4.2%, Altria Group Inc (MO): 3.52%, PepsiCo Inc (PEP): 2.97%, McDonald's Corp (MCD): 2.88%, Intel Corp (INTC): 2.24%, Home Depot Inc (HD): 2.2%, International Business Machines Corp (IBM): 2.03%, AbbVie Inc (ABBV): 2.0%
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. 19, 2015, 12:45 PM
- Intel (NASDAQ:INTC) has used its 2015 investor meeting (webcast) to guide for mid-single digit 2016 revenue growth; consensus is at 4%.
- The quarterly dividend is being hiked by $0.02 for 2016 to $0.26/share ($1.04 annualized). That spells a 3% yield at current levels.
- 2016 gross margin guidance is at 62% (+/- 2%). That's even with Q4 GM guidance, and compares with a Q3 GM of 63%. R&D/MG&A spend is expected to drop by half a point as a % of revenue.
- Capex is expected to rise to $10B (+/- $500M) from a depressed 2015 level of $7.3B (+/- $500M). $1.5B of the capex will be directed towards memory investments.
- Shares have rallied towards $34.
- Earlier: Intel provides in-line 2015 guidance; Xeon/FPGA solutions due in Q1
- Update (1:30PM ET): Intel is now up 4.4%.
Nov. 19, 2015, 11:58 AM
- Intel (INTC +1.4%) has used its 2015 investor meeting (currently underway, webcast) to forecast 2015 revenue of $55.2B, in-line with a $55.25B consensus. Shares are trading higher after starting the day nearly flat.
- Separately, Intel has promised its first Xeon server CPUs to be paired with soon-to-be-acquired Altera's FPGAs will arrive in Q1 2016. In 2014, Intel unveiled plans to provide Xeon CPUs that come with an in-package FPGA to accelerate the performance of algorithms and other code on the fly. Web/cloud service providers are among the expected buyers.
- Intel estimates FPGAs will be used in 30% of data center servers by 2020. Altera archrival Xilinx is trying to counter Intel by partnering with IBM (for Power CPUs) and Qualcomm (for ARM server CPUs). In addition to its FPGA efforts, Intel has a Xeon-related partnership with programmable ASIC maker eASIC.
- Update (12:48PM ET): Intel has guided for mid-single digit 2016 revenue growth, and hiked its quarterly dividend by $0.02 to $0.26/share.
Nov. 16, 2015, 5:53 PM
- Intel (NASDAQ:INTC) has used the supercomputer industry's SC15 conference to unveil SSF, a high-performance computing (HPC) system architecture meant to make HPC deployments easier for enterprises that have remained on the fence to date.
- Intel notes HPC deployments, a bright spot in a soft enterprise server market, have expanded beyond traditional use cases such as DNA sequencing, nuclear simulations, and weather modeling to cover a variety of corporate analytics workloads. The company argues a system-level approach will help eliminate system bottlenecks, and allow enterprises to use a common infrastructure for numerous HPC and non-HPC workloads.
- Central to SSF is Omni-Path (OPA), a high-speed interconnect fabric for HPC server nodes (first outlined by Intel a year ago) running on Intel CPUs. OPA is promised to enable switches that are both cheaper and more power-efficient than ones relying on InfiniBand interconnects (widely used in HPC deployments). Dell, HP, Lenovo, and many other OEMs plan to offer OPA-based switches and servers, which are expected to ramp in early 2016.
- Mellanox (NASDAQ:MLNX), the top player in the InfiniBand interconnect market, is in the crosshairs. Earlier today, Mellanox announced Switch-IB 2, an InfiniBand switch supporting 100G port speeds and (notably) embedded processing power for offloading communications tasks from server CPUs.
- Along with SSF, Intel has announced Knights Landing, the latest entry for its Xeon Phi co-processor line, will be generally available in Q1 2016; Intel was previously aiming for a late 2015 launch. Knights Landing features 72 CPU cores and 16GB of on-package DRAM, and promises big performance gains over the current-gen Knights Corner. It takes aim at Nvidia's (NASDAQ:NVDA) Tesla GPU line, which remains the biggest player in the HPC co-processor market.
- Aside from potentially growing the HPC market, SSF/Omni-Path could boost Intel's dollar content for various enterprise server deployments, as it continues pursuing a 15% Data Center Group revenue CAGR through 2018. Altera, whose FPGAs can be paired with Xeon CPUs to accelerate HPC workloads (among other things), could also aid in boosting dollar content.
Oct. 29, 2015, 3:19 PM
- Raytheon's (RTN -0.5%) Websense security software unit is buying Intel's (INTC -1.8%) Finnish Stonesoft firewall/next-gen firewall unit, which was acquired by the chip giant in 2013 for $389M. Terms are unknown for now.
- Trade site CRN has picked up a memo from Websense CEO John McCormack confirming the deal. The memo states Websense will be adding 300 employees, and that the deal is expected to close by year's end.
- Stonesoft's hardware has been sold under the McAfee brand. From all indications, it has had a tough time competing against the likes of Cisco, Palo Alto Networks, Fortinet, and Check Point.
- Earlier this year, Intel re-branded its McAfee unit as Intel Security, and formerly integrated the business with the rest of the company. More recently, Intel unveiled a security strategy focused on cloud and endpoint (device) protection. A new version of McAfee Endpoint Security (version 10.X) was announced, as was a new threat-detection/incident-response tool called McAfee Active Response.
Oct. 20, 2015, 2:39 PM
- Intel (INTC -0.3%) "plans to increase its investment in non-volatile memory technology to better serve customer needs and keep pace with the strong demand for Intel [SSD] solutions," the chip giant states in a brief announcement.
- Industry analyst Patrick Moorhead reports Intel is investing to convert its Dailan, China fab to support 3D NAND manufacturing. Bloomberg (citing Intel SVP Rob Crooke) reports Intel plans to begin Chinese 3D NAND manufacturing in 2H16.
- Intel NAND partner Micron (NASDAQ:MU), which was previously off moderately in response to a Bloomberg report stating SanDisk is in advanced sale talks with Western Digital (and not Micron), has fallen sharply.
- Update: Crooke provides details about Intel's plans in a blog post (.pdf). Intel will invest up to $5.5B "over the coming years" to produce flash memory at its Dailan fab. Intel and Micron unveiled high-density 3D NAND chips in March, and their 3D XPoint next-gen memory solution in July.
Intel Corp. designs, manufactures and sells computer components and related products. It also engages in the designing and manufacturing of computing and communication components, such as microprocessors, chipsets, motherboards, and wireless and wired connectivity products. The company develops... More
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