Fri, Nov. 6, 4:47 PM
- The Philadelphia Semi Index (SOXX +2.6%) rallied after Nvidia (NVDA +13.9%) beat estimates and provided strong guidance (gaming GPUs led the way), Skyworks (SWKS +7.1%) offered good calendar Q4 guidance and RF chip peer Qorvo (QRVO +23.2%) posted better-than-feared results and guidance. The Nasdaq rose just 0.4%.
- Also: Analog/Ethernet chipmaker Microsemi (MSCC +4.9%) beat calendar Q3 revenue estimates and offered solid Q4 guidance: Revenue of $325M-$329M and EPS of $0.70-$0.74 vs. a consensus of $323.5M and $0.72.
- Big gainers today included specialty foundry/Skyworks supplier TowerJazz (TSEM +6%), smart TV/home automation chipmaker Sigma Designs (SIGM +16.6%), telecom/networking IC provider InPhi (IPHI +6.7%), touch controller/LCD driver supplier Synaptics (SYNA +6.1%), FPGA maker Lattice Semi (LSCC +6.6%), network processor vendor Cavium (CAVM +5.6%), DSP core IP provider CEVA (CEVA +7.2%), and analog/mixed-signal chipmakers MagnaChip (MX +4.6%) and Semtech (SMTC +5.4%).
- On its earnings call (transcript), Qorvo mentioned Chinese smartphone demand (a recent headwind) is "seeing a bit of a rebound," and that the launch of 5-mode and 6-mode Chinese 4G phones is boosting RF chip content. Qorvo also thinks Chinese base station activity (an issue for many telecom chip/component firms) bottomed in Q3, but cautions a mobile infrastructure recovery is expected to be gradual.
- Microsemi stated on its call (transcript) broadband gateway chip sales were a Q3 strong point, that telecom infrastructure began to improve, and that defense/aerospace sales are expected to rebound in 2016. Industrial demand remained soft in Q3.
- MKM's Ian Ing has upgraded Nvidia to Buy, calling shares "expensive and worth it." Ing: "We see a sustainable growth trajectory, given [Nvidia's] positioning to lead in significant paradigm changes favoring more valuable semiconductor solutions: automotive evolving from driver assist to autonomous driving, gaming transitioning to virtual reality and professional or social E-sports, and cloud computing increasingly using GPU accelerators for machine learning."
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Last week: Chip stocks sell off after NXP, STMicro, others issue soft guidance
Thu, Oct. 29, 6:35 PM
- Though MagnaChip (NYSE:MX) beat Q3 estimates, it's guiding for Q4 revenue of $143M-$153M, unfavorable at a $148M midpoint to a $151.7M consensus. In addition, GAAP gross margin is expected to drop to 14%-16% from Q3's 22.5% and Q2's 21.8%.
- Foundry Services revenue fell 28% Y/Y in Q3 to $71.5M, Display Solutions (display drivers and other display-related ICs) fell 18% to $48.3M, and Power Solutions (power management ICs) fell 5% to $34.4M. Chinese sales of display/power products were a strong point.
- Cost cuts led GAAP operating expenses to drop 16% to $42.6M. CEO Y.J. Kim: "Spending in the first three quarters of 2015 declined by approximately $38 million as compared with the same period last year, and our 2016 spending targets are now under review as part of a comprehensive cost reduction plan launched earlier this year." MagnaChip ended Q3 with $68.5M in cash, and $224.1M in long-term borrowings.
- Shares have fallen to $5.80 after hours.
- Q3 results, PR
Thu, Oct. 29, 4:33 PM
Thu, Oct. 29, 12:29 PM
- Down on Monday following Dialog Semi's Q3 report and up yesterday in the wake of Apple's results/guidance, chip stocks are selling off again (SOXX -2.5%) after leading microcontroller vendor NXP (NXPI -18.2%) posted mixed Q3 results and (more importantly) guided for Q4 revenue to be down by a "low to upper-teens" % Q/Q. The Nasdaq is down 0.3%.
- Also: 1) NXP rival and fellow European chipmaker STMicroelectronics (STM -5.8%) slightly missed Q3 revenue estimates and has guided for Q4 revenue to be down 6% (+/- 3.5%) Q/Q. 2) Network processor vendor Cavium (CAVM -5%) issued light Q4 guidance, while blaming a distribution model change at its biggest data center customer. 3) Microcontroller maker Atmel (ATML -2.4%, set to be acquired by Dialog) missed Q3 revenue estimates and guided for Q4 revenue of $266M-$286M, below a $296.1M consensus.
- On the bright side, Apple-dependent Cirrus Logic (CRUS -5.7%) beat FQ2 EPS estimates (revenue was in-line) and provided solid FQ3 guidance, and fellow Apple/Samsung supplier InvenSense (INVN +14.3%) beat FQ2 estimates and issued in-line FQ3 guidance. Cirrus is nonetheless selling off; the earnings call (transcript) was generally upbeat, with management talking up FY16/FY17 growth opportunities related to smart codec and boosted amplifier sales.
- NXP merger partner Freescale (FSL -15.4%) is naturally seeing big losses. Other decliners include RF chipmakers Skyworks (SWKS -3.1%), Avago (AVGO -6%), and Qorvo (QRVO -2.6%), analog/mixed-signal chipmakers Texas Instruments (TXN -3%), ON Semi (ON -5.9%), MagnaChip (MX -6.8%), Fairchild (FCS -4.3%), Maxim (MXIM -3.1%), and IDT (IDTI -5.2%), and smart TV SoC vendor/STMicro rival Sigma Designs (SIGM -3.2%).
- Like NXP, Cirrus, and InvenSense, Skyworks, Avago, Qorvo, TI, and Fairchild are Apple suppliers. Fairchild and Maxim have recently benefited from M&A reports (I, II).
- Both NXP and STMicro reported seeing conditions deteriorate as Q3 progressed. NXP added lower-than-expected chip sell-through led to higher channel inventories, and STMicro stated "lower consumer spending in China is impacting the dynamics of the distribution channel in the region and the industry more globally, particularly in automotive." NXP has added 20M shares to its buyback in an attempt to soften the blow.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, Oct. 14, 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
Mon, Sep. 28, 3:00 PM
- Plenty of high-beta tech names are getting clobbered as the Nasdaq posts a 3% drop amid a broad market selloff.
- Firms down over 5% include memory giant Micron (MU -5.6%), salvage auction site Liquidity Services (LQDT -10.5%), industrial measurement toolmaker Perceptron (PRCP -12.1%), cloud healthcare software provider Castlight (CSLT -5.4%), CDN owner Limelight (LLNW -8.6%), mortgage origination software firm Ellie Mae (ELLI -6.1%), ultracapacitor maker Maxwell (MXWL -8.5%), Korean analog/mixed-signal chipmaker MagnaChip (MX -9.3%), online loan marketplace LendingTree (TREE -7.9%), and online ad retargeting firm Criteo (CRTO -5.9%).
- Micron's decline comes ahead of its Thursday FQ4 report. Nomura predicted today FQ4 results will miss consensus, and that FQ1 will also be weak. "While an estimate cut is well understood, we believe Micron’s stock will continue to track DRAM/NAND pricing, which is trending lower into the peak of the build season.” Cowen, on the other hand, argued FQ4 will be the bottom, and stated checks point to Samsung "pulling back meaningfully on capex."
- See also: Solar stocks, GoPro, Mindbody, Qorvo
Mon, Aug. 31, 10:56 AM
- Pleasant Lake Partners, which currently owns 9.9% of MagnaChip (MX +5.7%) has offered to buy the Korean analog/mixed-signal chipmaker for $10/share in cash (roughly $345M). The offer is "subject to confirmatory due diligence and the negotiation of definitive transaction documents." (13D filing)
- Pleasant Lake: "[T]he accelerating pace of consolidation in the semiconductor industry, coupled with what believe are Magnachip’s strategically valuable assets and intellectual property, has led us to make this Proposal. We have consistently heard from other shareholders that the status quo at Magnachip is not acceptable and that the Company, in whole or in part, would be worth significantly more to strategic acquirers than as a standalone entity."
- MagnaChip has risen to $8.17. Pleasant Lake's proposal letter offers few details on how a purchase will be financed. The firm has previously argued MagnaChip's fabs and IP have value to potential acquirers.
- Last month: MagnaChip exploring strategic alternatives, including potential sale
Mon, Aug. 24, 4:29 PM
- The Nasdaq opened down 7.5%, furiously rallied almost to breakeven, and then sold off again in the afternoon to close down 3.8%. Some tech stocks managed to rise nonetheless, while many others posted 5%+ declines.
- Major decliners included Citrix (CTXS -9.3%), Solera (SLH -8.9%), NCR (NCR -7.8%), Nuance (NUAN -6.9%), Infinera (INFN -6.4%), HomeAway (AWAY -6.6%), MagnaChip (MX -6.4%), Yandex (YNDX -7.5%), Neustar (NSR -6%), Ebix (EBIX -7.3%), SGI (SGI -8%), Monster (MWW -7.5%), Silver Spring (SSNI -6.6%), Perion (PERI -11%), and Synchronoss (SNCR -7.5%).
- Solera's decline comes 4 days after the company confirmed it's exploring strategic alternatives, and 5 days after Bloomberg reported a sale is being explored. Yandex has been hit hard in recent weeks by the ruble and crude oil's decline. Infinera is down 20% over the last 3 trading days, albeit still up 34% YTD.
- See also: Morning decliners, Chinese tech stocks, large-cap decliners
Tue, Aug. 18, 2:23 PM
- Having already felt the effects of a string of downbeat earnings reports, chip stocks are underperforming today amid a 0.5% drop for the Nasdaq. The Philadelphia Semi Index (SOXX -1.7%) is near its 2015 lows, and now down 9% YTD. Fresh Chinese macro fears - the Shanghai and Shenzhen exchanges both fell sharply overnight - could be playing a role.
- Micron (MU -4.9%), 4 days removed from hosting its analyst day and 1 day removed from seeing a slew of analysts respond, is among the names down strongly. BofA/Merrill downgraded NAND flash rival SanDisk and NAND controller vendor Silicon Motion to Underperform this morning, which citing Micron and SK Hynix's capex plans - Hynix says it's thinking of spending $39B on fab investments.
- Other major decliners that are tied to the industry include Skyworks (SWKS -5.3%), Qorvo (QRVO -3.6%), IDT (IDTI -6.3%), AppliedMicro (AMCC -4.3%), ChipMOS (IMOS -4.3%), Rambus (RMBS -3.8%), Silicon Labs (SLAB -3.1%), Semtech (SMTC -3.5%), MagnaChip (MX -4.4%), and Amkor (AMKR -3.6%).
- Needless to say, multiples for many hard-hit names have come down considerably over the last two months.
- Chips ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Aug. 6, 4:40 PM
Fri, Jul. 24, 12:58 PM
- Buried within the recently-filed proxy materials for MagnaChip's (MX +2%) annual meeting: The company discloses its board has formed a strategic review committee that is "reviewing, considering and evaluating strategic alternatives that may be available to the Company, including the potential sale of all or a substantial portion of the Company."
- A long list of small and mid-cap chipmakers have been acquired amid the industry's ongoing M&A wave. MagnaChip investor Pleasant Lake Partners (9.95% stake) recently called on the company to "redouble its efforts and be proactive in unlocking and enhancing shareholder value."
Thu, Jul. 16, 2:45 PM
- Chip stocks are missing out on a market rally (SOXX -0.2%) after Intel, TSMC, and Fairchild posted Q2 results. The Nasdaq is up 1.1%, and the S&P 0.7%.
- Intel (down 0.2%) beat estimates - EPS benefited from a low tax rate - offered above-consensus guidance, cut its 2015 capex budget by $1B, and pushed out the ETA for its first 10nm CPUs to 2H17.
- TSMC (up 0.8%) beat estimates and offered solid Q3 guidance, but also provided cautious industry commentary, and forecast global chip sales will rise only 3% in 2015. A strong dollar, weak PC sales, and slowing emerging markets smartphone growth have been weighing on industry growth.
- Fairchild (FCS -10.4%) missed estimates and guided for Q3 revenue of $355M-$375M, below a $383.7M consensus. The analog chipmaker blames the Q2 miss on "some mobile and appliance customers, the wireless telecom sector as well as general market distribution."
- Chip equipment stocks are especially hard-hit thanks to Intel's capex cut/10nm push-out, but various chip developers are also down. Notable decliners include Fairchild peers ON Semi (ON -2.3%), MagnaChip (MX -2.3%), Pericom (PSEM -3.4%), Silicon Labs (SLAB -2.1%), and Intersil (ISIL -2.4%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Fri, Jul. 10, 5:05 PM
- After reviewing its governance structure and talking with shareholders - one of whom had submitted a director slate, and has now withdrawn it - MagnaChip (NYSE:MX) will do away with it its 3-class board structure, effective as of its 2016 annual meeting. (8-K filing)
- Starting next year, all directors will annually stand for election for 1-year terms. News of the change come in a week that saw Pleasant Lake Partners (9.95% stake) call for major changes in an open letter.
Thu, Jul. 9, 11:57 AM
- In an open letter, Pleasant Lake Partners (9.95% stake, capped by a poison pill) declares MagnaChip's (NYSE:MX) board "needs to redouble its efforts and be proactive in unlocking and enhancing shareholder value."
- In accompanying slides, Pleasant Lake estimates the Korean analog/mixed-signal chipmaker can deliver annual EPS of ~$1.75 and free cash flow/share of ~$1.85. The firm thinks MagnaChip's accounting restatement, "misguided strategy," and "poor execution on customer acquisition" have kept it from realizing its potential.
- It also argues MagnaChip's IP could be separated from its chip design business, and that peer valuations and second-hand equipment costs imply a value of $23-$37/share for the company's fabs. In addition, Pleasant Lake highlights recent chip acquisitions by Chinese investors, implyingMagnaChip could also draw M&A interest.
Fri, May 29, 1:49 PM
- Beaten-down MagnaChip (NYSE:MX) has blasted off after posting Q1 results, announcing a restructuring, and removing the "interim" labels from its CEO and CFO's job titles.
- Topeka Capital has upgraded to Buy, and set a $9 target. The firm thinks MagnaChip's foundry ops stand to benefit from greater management focus, and are "valued at a substantial discount."
- Along with its results, MagnaChip has disclosed (through its 2014 10-K) it received an SEC subpoena in Marchrelated to a probe of the company's past accounting. General counsel Theodore Kim has been named the company's chief compliance officer.
Fri, May 29, 12:46 PM
Other News & PR