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
Apr. 14, 2015, 5:43 PM
- Semtech (NASDAQ:SMTC) has divested its defense/aerospace chip business to Jariet Technolgies, a newly-formed company in which Semtech will have a minority stake. The company previously said it was looking divest/shut down the business due to concerns about time-to-revenue.
- In tandem with the move, chief strategy officer Charles Harper has resigned to become Jariet's CEO.
Mar. 4, 2015, 5:07 PM
- Though Semtech (NASDAQ:SMTC) beat FQ4 estimates, it's guiding for FQ1 revenue of $130M-$136M and EPS of $0.27-$0.30, below a consensus of $136.4M and $0.37.
- The analog/mixed-signal chipmaker also announces it's buying Triune Systems, a maker of wireless charging, power management, and battery charger chips, for $45M in cash + performance earn-outs. The deal is expected to be financed via Semtech's credit line, and be slightly accretive in FY16 (ends Jan. '16).
- Shares have fallen to $28.00 AH.
- FQ4 results, PR
Aug. 20, 2014, 11:51 AM
- Fairchild (FCS +2.5%), Intersil (ISIL +1.3%), Semtech (SMTC +2.6%) and Power Integrations (POWI +3.3%) have all given back a chunk of their early gains. Peer International Rectifier, which also rallied, has been halted.
- All 5 companies had jumped on a Bloomberg report stating Infineon is nearing a deal to buy a U.S. chipmaker for ~$2B.
Aug. 20, 2014, 10:15 AM
- Bloomberg reports Infineon (OTCPK:IFNNF) "nearing an agreement to acquire a U.S.- based semiconductor company for about $2 billion," and that a deal could be announced as soon as today.
- No word on whom Infineon is looking to buy. Bloomberg notes it reported last month analog/mixed-signal chipmakers Fairchild (FCS +5.6%), Power Integrations (POWI +11.3%), and Semtech (SMTC +8%) are considered M&A targets, as the chip industry continues to consolidate.
- Shares of all three companies are up sharply, as are those of peers International Rectifier (IRF +5.8%) and Intersil (ISIL +4.4%). FCS and IRF are currently worth $2B; POWI is worth $1.9B; ISIL is worth $1.8B; and SMTC is worth $1.7B.
- "[Infineon] would like to build a stronger presence in power management," says Liberum Capital's Janardan Menon. He adds the market has "high barriers to entry and strong growth prospects," a fact that also hasn't been lost on Texas Instruments and other industry players.
Jun. 17, 2014, 6:58 PM
- The consolidation wave that has hit the semi industry could soon yield tax inversion deals for foreign firms similar to deals seen in the healthcare industry, says FBR's Christopher Rolland.
- Inversion deals allow U.S. companies buying foreign firms to see lower tax rates if less than 80% of the equity in the new company is owned by legacy U.S. shareholders, and the post-merger company has substantial foreign ops.
- Rolland thinks ARM (ARMH), NXP (NXPI), Mellanox (MLNX), and Taiwan's MediaTek could be among the foreign companies targeted by U.S. chipmakers. Worth noting: Mellanox sells more than just chips, and ARM's business model depends on the company maintaining a neutral status within the industry.
- Meanwhile, Nomura's Romit Shah names 15 potential M&A candidates, and divides them into 3 groups: "Sub-scale companies" with high margins and strong IP; "strategic companies" with compelling product lines; and "undervalued companies."
- Shah's "sub-scale companies:" IDTI, ISIL, MTSI, MCRL, SMTC, SLAB.
- "Strategic companies:" ALTR, AMCC, ATML, CAVM, MPWR, BRCM ($22.5B market cap could make it tough to digest).
- "Undervalued companies:" DIOD, IRF, MSCC.
Jan. 23, 2012, 7:32 PM
Semtech (SMTC) acquires Gennum (GNUMF.PK) for approximately $494M. Gennum designs and sells products that enable video, data and multimedia content to be transmitted at high speed over long distances, while maintaining signal integrity and eliminating the potential for errors in transmission.| Jan. 23, 2012, 7:32 PM