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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. 6, 2015, 12:57 PM
- Skyworks (NASDAQ:SWKS) has tumbled towards $75 after announcing it's buying storage and telecom IC vendor PMC-Sierra (NASDAQ:PMCS) for $2B in cash on hand. (PR)
- Fellow RF chipmaker Avago (AVGO -6.7%), which (thanks to the LSI acquisition) competes against PMC-Sierra in the storage controller market, is also off, as is merger partner Broadcom (BRCM -3.2%), which competes against PMC to an extent in the telecom IC and network processor markets. RF peer Qorvo (QRVO -3.3%) is also getting hit. The Nasdaq is down 1.2%.
- Possibly hurting the group: Skyworks has used the PMC deal to announce it expects FQ4 (calendar Q3) revenue of $880M and EPS of $1.52. That's slightly above prior guidance of $875M and $1.51 and a consensus of $876M and $1.51, but expectations have been high following a long string of beat-and-raise quarters.
- The PMC acquisition expands Skyworks' reach to a slew of non-RF chip markets and enterprise/telecom infrastructure end-markets. It's expected to yield $75M in cost synergies within 12 months of closing (expected in 1H16), and subsequently boost Skyworks' annual EPS by $0.75. Assuming that target is hit, Skyworks is paying 14x forward EPS.
- Update (1:04PM ET): BofA/Merrill is defending Skyworks and Avago, arguing forward P/Es of less than 10 make shares very cheap.
- Update 2 (5:01PM ET): The group staged a comeback in afternoon trading. Skyworks closed down 1.4%, Avago 3.4%, Qorvo 1.1%, and Broadcom 1.6%. The Nasdaq closed down 0.7%.
Oct. 1, 2015, 2:01 PM
- After outperforming yesterday as markets rallied, chip stocks are doing the opposite today amid a selloff. The Philadelphia Semi Index (SOXX -2.1%) is back below $80.
- Possibly hurting the group: Digitimes reports iPhone chip suppliers are worried Apple could cut its Q4 orders, and that one "major analog IC supplier" has disclosed a slight December order cut. At the same time, Digitimes states suppliers won't know if major order cuts will happen for at leas 1-2 months. iPhone suppliers seeing major losses include NXP (NXPI -4.2%), Avago (AVGO -3.8%), Qorvo (QRVO -4.5%), Cirrus Logic (CRUS -3.1%), Fairchild (FCS -4.9%), and Analog Devices (ADI -3.8%).
- However, it's worth noting several chipmakers lacking iPhone exposure are also down strongly. The list includes Himax (HIMX -3.5%), PMC-Sierra (PMCS -4.1%), InPhi (IPHI -4.6%), Semtech (SMTC -4.6%), and QuickLogic (QUIK -5.7%). Chip IP provider CEVA (CEVA -3.8%) and specialty foundry TowerJazz (TSEM -5%) are also selling off.
- Memory giant Micron reports after the bell.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Sep. 28, 2015, 9:19 AM
- Believing FQ3 (calendar Q4) results could miss expectations given Xiaomi's struggles, weak base station demand, and a lack of upside opportunity at Apple, and that slowing Chinese smartphone growth will continue to weigh, Pac Crest's Mike McConnell has downgraded Qorvo (NASDAQ:QRVO) to Sector Weight, and cut his target by $17 to $53.
- The downgrade comes two months after Qorvo delivered soft FQ2 guidance blamed on slowing orders from Chinese phone and base station OEMs.
- iFixit's iPhone 6S teardown recently turned up a Qorvo power amplifier module (TriQuint) and antenna switch (RF Micro). The company landed similar design wins with the iPhone 6. Apple just announced it has sold over13M iPhone 6S/6S+ units following the phones' opening weekend.
- Shares have fallen to $46.65 premarket; the 52-week low is $45.00. Qorvo now trades for just 8.7x an FY17 (ends March '17) EPS consensus of $5.50.
Sep. 10, 2015, 9:15 AM
- Just a month after announcing a $400M buyback (after using up a $200M authorization), Qorvo (NASDAQ:QRVO) says its latest buyback has also been fully used.
- 7.3M shares were repurchased at an average price of $54.75. Altogether, the RF chipmaker has bought back $600M worth of shares since February. For reference, currently sports an $8.4B market cap.
- No new buyback has been announced yet. The aggressive stock purchases come after Qorvo plunged in late July and early August due to its light FQ2 guidance.
Aug. 26, 2015, 4:21 PM
- The Nasdaq has closed its latest ultra-volatile day up 4.2%. Chip stocks, hit hard in recent weeks amid China/inventory concerns, were among the standouts (SOXX +5%) during the rally: Big gainers included Nvidia (NVDA +7.5%), Skyworks (SWKS +6.9%), Qorvo (QRVO +5.9%), Xilinx (XLNX +6.3%), Analog Devices (ADI +7.1%), Linear (LLTC +6.1%), SanDisk (SNDK +7.4%), ON Semi (ON +6.2%), and Cavium (CAVM +5.6%).
- Cybersecurity plays and various other enterprise tech names also did well. Standouts included HP (HPQ +5.5%), Palo Alto Networks (PANW +6%), Rackspace (RAX +9.8%), Red Hat (RHT +5.9%), KEYW (KEYW +8.1%), Brocade (BRCD +5.6%), ShoreTel (SHOR +5.7%), Violin Memory (VMEM +14.7%), and Rapid7 (RPD +7.2%).
- In addition to HP, tech large-caps turning in big gains included Apple (AAPL +5.7%) Microsoft (MSFT +5.5%), Google (GOOG +7.7%), and Intel (INTC +5.5%). Google benefited from a Goldman upgrade.
- KEYW announced a CEO change yesterday afternoon. HP and Brocade are adding to last week's post-earnings gains. Skyworks/Qorvo peer Avago has posted an FQ3 beat after the close.
Aug. 18, 2015, 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
Aug. 11, 2015, 9:09 AM
- Qorvo's (NASDAQ:QRVO) new buyback is good for repurchasing nearly 5% of shares at current levels. It arrives two weeks after shares plunged due to the soft FQ2 guidance provided with an FQ1 beat.
- A $200M buyback launched in February was used to buy 3.1M shares at an average price of $63.80. Qorvo is nearly unchanged premarket; Nasdaq futures are down 0.5%.
Aug. 4, 2015, 2:33 PM
- Apple is down 2.6% on strong volume (adding to recent post-earnings declines), and a slew of iPhone/iPad chip suppliers are also seeing major losses today. The Nasdaq is down just 0.3%, while the Philadelphia Semi Index is down 1.5%.
- RF chipmakers Skyworks (SWKS -5.4%), Qorvo (QRVO -3.8%), and Avago (AVGO -3%) are among the decliners, as are audio codec supplier Cirrus Logic (CRUS -5.5%), motion sensor supplier InvenSense (INVN -5.7%), NFC/motion co-processor supplier NXP (NXPI -3.3%), and LCD driver supplier Synaptics (SYNA -3.8%). The selloff has occurred in the absence of major news
- NXP merger partner Freescale (FSL -2.8%) is also off, as is chip packaging/testing firm Amkor (AMKR -4.2%), which has strong iPhone exposure. Earlier today, the EC announced NXP has offered concessions to win regulatory approval for the Freescale deal, which has a review deadline of Sep. 4. NXP has already agreed to sell its base station power amplifier unit for $1.8B to appease regulators.
- InvenSense reports after the close. The other aforementioned names have already posted their calendar Q2 results.
Jul. 30, 2015, 9:12 AM
- Gainers: UNXL +33%. UNIS +22%. MEET +18%. GEVO +17%. SHOP +15%. OTEX +15%. WWE +15%. SGYP +13%. SKX +12%. MWW +9%. HBP +8%. HOLX +8%. WDC +8%. APD +6%.
- Losers: PRSN -35%. LNCO -21%. LINE -19%. FMI -18%. SSYS -18%. ITG -14%. FOE -13%. WFM -12%. QRVO -12%. OSK -11%. LOCK -11%. DDD -9%. MNKD -7%. NCR -6%. GNCA -6%. FMS -5%. MPC -5%. CROX -5%.
Jul. 29, 2015, 8:48 PM
- Discussing its light FQ2 guidance on its earnings call, Qorvo (NASDAQ:QRVO) mentioned it has seen "seen a slowing among handset customers in China," and that certain Chinese customers "have a few weeks of excess inventory to work on." The Chinese smartphone market saw a rough start to the year; bulls have been hoping for a 2H15 pickup.
- Qorvo also noted weak Chinese 4G infrastructure demand has affected base station-related sales. Various other chipmakers have reported seeing the same trend.
- CEO Bob Bruggeworth promises new integrated offerings enabled by the RF Micro/TriQuint merger will help drive long-term growth. "These new Qorvo solutions, which include receive diversity modules, Wi-Fi Integrated Front End Modules, and SOI infrastructure switches, are expected to contribute meaningfully to revenue next calendar year."
- Shares fell to $59.89 in AH trading. Qorvo rival Skyworks provided stronger calendar Q3 guidance last Thursday.
- FQ1 results/FQ2 guidance, PR
Jul. 29, 2015, 5:41 PM
Jul. 29, 2015, 4:04 PM
- Qorvo (NASDAQ:QRVO): FQ1 EPS of $1.09 beats by $0.03.
- Revenue of $673.6M beats by $9.05M.
- Expects FQ2 revenue of $690M-$710M and EPS of $1.05-$1.15, below a consensus of $743.6M and $1.28.
- Shares -9.2% AH.
Jul. 23, 2015, 5:00 PM
- In addition to beating FQ3 estimates, Skyworks (NASDAQ:SWKS) is guiding for FQ4 revenue of $875M and EPS of $1.51, above a consensus of $863M and $1.42.
- FQ3 gross margin was 49%, +150 bps Q/Q and +360 bps Y/Y, and above guidance of 48%. FQ4 GM guidance is at 50%. GAAP operating expenses rose 16% Y/Y to $134.3M - $76.8M was spent on R&D and $48.6M on SG&A. Skyworks ended FQ3 with $1.11B in cash, and no debt.
- New design wins during the quarter include SkyOne Mini (RF front-end, aimed at cheaper phones) and diversity module wins for a ZTE 4G platform, antenna switch and connectivity module wins at Xiaomi, Zigbee analog front-end for Home Depot smart lighting products, and connectivity ICs for set-tops deployed by Liberty Global.
- Shares have risen to $107.01 AH. Qorvo (NASDAQ:QRVO), which reports on July 29, is up 1.5% to $76.38.
- Skyworks' FQ3 results, PR
- Earlier: Micron, RF chipmakers gain as Cirrus/SanDisk soar post-earnings
Jul. 23, 2015, 1:40 PM
- Micron (MU +3.7%), Skyworks (SWKS +3.2%), Qorvo (QRVO +1.2%), and Avago (AVGO +1.9%) are recovering some of the Wednesday losses seen in response to Apple's FQ3 iPhone sales print and FQ4 guidance. The Nasdaq is down 0.4%.
- The gains come after Apple-dependent Cirrus Logic (CRUS +19.8%) beat FQ1 estimates and provided strong FQ2 guidance, and beaten-down NAND flash giant SanDisk (SNDK +17.5%) delivered a Q2 beat and offered (better than feared) in-line guidance. Micron received 35% of its May quarter revenue from NAND.
- The numbers are overshadowing Qualcomm's soft FQ4 guidance, blamed to a large extent on iPhone share gains and the lack of a Galaxy S6 app processor design win.
- Stifel's Tore Svanberg has upgraded Cirrus to Buy, while asserting the audio codec developer is "entering a significant product cycle over the next 12-24 months." He's upbeat about the launch of 55nm codecs (expected to provide cost savings), and sees evidence of further traction with top Android OEMs.
- Oppenheimer (Perform rating) estimates Cirrus will (thanks to a smart codec design win) get over $3+ per iPhone 6S unit compared with ~$2.15 per iPhone 6, and notes another smart codec win with a top-tier OEM will ramp over the next 2 quarters. Apple was 62% of FQ1 revenue vs. 65% in FQ4; Samsung (lifted by a Galaxy S6 win) was 18%.
- BofA/Merrill has upgraded SanDisk to Buy. Pac Crest's Monica Garg (Outperform) notes Q2 retail and enterprise sales were both better than expected, as was an ASP decline of 6%. She's also pleased a client SSD delayed by qualification issues will begin shipping in Q4, and asserts SanDisk has both the best planar NAND technology and the industry's first 48-layer 3D NAND chips. Bernstein is also upbeat.
- Skyworks reports after the bell. Various analysts have defended Skyworks, Avago, and Qorvo following Apple's numbers, asserting 4G growth/greater RF complexity remains a tailwind. Oppenheimer estimates Skyworks will see a "15%-20% content boost" with the iPhone 6S, and Avago a more modest gain.
- Prior Cirrus coverage. Prior SanDisk coverage.
Jul. 21, 2015, 5:40 PM
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