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  • Fri, Mar. 4, 5:51 PM
    • Following a rough 2015 in which weak PC demand, slowing smartphone growth, plunging memory prices, and a late-year inventory correction all weighed, Wells Fargo's David Wong thinks a chip industry recovery is on the way.
    • His rating for the sector has been upped to Overweight from Market Weight, and his ratings for Micron (NASDAQ:MU), Analog Devices (NASDAQ:ADI), and Microsemi (NASDAQ:MSCC) in particular have been raised to Outperform. Outperform ratings are reiterated for Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM), Linear (NASDAQ:LLTC), AMD, Xilinx (NASDAQ:XLNX), and SunEdison Semi (NASDAQ:SEMI).
    • Wong argues 2016 chip industry growth could be as high as 7%
      (with growth reaching double-digits by year's end), and that 8%-14% growth is possible in 2017. Gartner estimates industry revenue fell 1.9% in 2015 to $333.7B.
    • Wong: "Over the last 5 years 2010-2015, semiconductor industry growth has tracked below global GDP for the most part. We think this has created significant pent-up demand created by the deferral of electronics goods purchases and aging of the installed base of electronics systems ... We think that there could well be the first signs of improvement in the year/year comparisons at some point in the June 2016 quarter in the many of the broader chip markets, including the industrial, communications infrastructure and PC markets."
    • Some expectations for a recovery might already be priced in: The Philadelphia Semi Index (NASDAQ:SOXX) is up 18% from a February low of $74.80. However, it's still down 13% from a June high of $101.80.
    • Earlier today, Broadcom (the company produced by the Avago/Broadcom merger) posted big gains after beating January quarter estimates and issuing healthy April quarter guidance. On its earnings call, Broadcom forecast solid April quarter growth for its wired infrastructure (telecom/networking chip) segment, and a 2H16 recovery for its mobile chip segment (recently hurt by soft iPhone-related demand). More cautious outlooks were provided for Broadcom's storage and industrial segments.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Fri, Mar. 4, 5:51 PM | 20 Comments
  • Tue, Feb. 2, 2:42 PM
    • On a day the Nasdaq is down 2.1%, many chip stocks are seeing outsized losses (SOXX -3.1%) after IDT (IDTI -28.3%), a mixed-signal chipmaker selling into the server, networking/telecom infrastructure, and wireless charging markets (among others), offered soft FQ4 (calendar Q1) guidance to go with an FQ3 sales beat.
    • Major decliners include diversified European chipmakers NXP (NXPI -4.7%) and STMicroelectronics (STM -7%), microcontroller maker Cypress Semi (CY -6.9%), RF chipmaker Qorvo (QRVO -6.4%), motion sensor developer InvenSense (INVN -6%), chip packaging/testing firm Amkor (AMKR -6.1%), and analog/mixed-signal chipmakers MagnaChip (MX -9.8%), Inphi (IPHI -9.1%), Silicon Labs (SLAB -5%), Microsemi (MSCC -4.4%), Semtech (SMTC -5.4%), and Power Integrations (POWI -5.5%). Previously covered: Pixelworks, ON Semi.
    • IDT reported Chinese telecom infrastructure demand is "normalizing to slightly less than the peak levels seen in late calendar 2014," that data center customer growth rates have slowed slightly, and that consumer demand has been affected by increased "customer smartphone shipment volatility." Both Apple and Samsung's sales have been under pressure.
    • BofA/Merrill has downgraded IDT to Neutral, while Wedbush's Betsy Van Hees has gone contrarian and upgraded to Outperform. Van Hees argues IDT is still positioned to see strong FY17 growth, aided by the ramp of LRDIMM DRAM chipsets for Intel's Broadwell server CPU launch and the ramp of wireless charging IC programs at tier-1 OEMs.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Tue, Feb. 2, 2:42 PM | 5 Comments
  • Thu, Jan. 21, 4:17 PM
    • Chip stocks fared well (SOXX +1.5%) on a day the Nasdaq was nearly flat. The gains came after FPGA maker Xilinx (XLNX +8.6%) beat calendar Q4 sales estimates, issued solid Q1 guidance, and published an 8-K filing that has fueled hopes the company will join the ranks of chip firms to be acquired during the industry's M&A wave.
    • Also: Microcontroller and SRAM/NOR flash memory maker Cypress Semi (CY +7.6%) affirmed its Q4 guidance against a backdrop of low expectations.
    • Seeing the biggest gains was AMD (AMD +16.1%), which is two days removed from providing weak Q1 guidance to go with a Q4 sales beat. In spite of the guidance and the largely downbeat analyst commentary that has followed, AMD is now up 7% since the Q4 report arrived. Short-covering is likely helping - 120.4M shares (19% of the float) were shorted as of Dec. 31.
    • Small-cap Xilinx rival Lattice Semi (LSCC +10.8%) was also a standout. Lattice (like Xilinx) has seen its share of M&A speculation, and CEO Darin Billerbeck has suggested he's open to a sale.
    • Other notable gainers include Cavium (CAVM +3.6%), Silicon Motion (SIMO +3.7%), and Knowles (KN +6.5%) - Cavium is exposed to some of the same end-markets as Xilinx. MagnaChip (MX +13.9%) jumped two days after making a positive Q4 pre-announcement. Beaten-down Micron (MU +8%) also rallied strongly, possibly aided by a bullish Morgan Stanley note.
    • On its earnings call (transcript), Xilinx mentioned the automotive market (a strong point for many chip companies, as chip content within cars steadily grows) is expected to see record sales in calendar Q1, and deliver 30% sales growth for FY16 (ends in March). Mobile infrastructure-related sales are expected to rise Q/Q, but deemed unlikely to reach a March 2014 peak anytime soon. CEO Moshe Gavrielov: "[E]verything until 2020 is likely to be of a smaller scale and the next big surge will be driven by 5G."
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Thu, Jan. 21, 4:17 PM | 8 Comments
  • Nov. 6, 2015, 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
    | Nov. 6, 2015, 4:47 PM | 1 Comment
  • Oct. 29, 2015, 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
    | Oct. 29, 2015, 12:29 PM | 7 Comments
  • 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. 22, 2015, 12:24 PM
  • Oct. 19, 2015, 4:38 AM
    • Slowing growth and rising costs are driving a historic wave of consolidation in the semiconductor industry as firms look to streamline their organizations and product lines.
    • "It's buy or be sold," summed up Alex Lidow, chief executive of Efficient Power Conversion Corp.
    • Chip companies have so far announced $100.6B in mergers and acquisitions this year, exceeding the $37.7B in 2014, and totals could go even higher.
    • Bloomberg reported last week that four chip companies - Analog Devices, Maxim Integrated Products, SanDisk, and Fairchild Semiconductor - were in talks concerning different deal options.
    • ETFs: SOXL, USD, SMH, SOXX, XSD, SOXS, PSI, SSG
    • Previously: Bloomberg: Analog Devices, Maxim in merger talks (Oct. 14 2015)
    • Previously: More on SanDisk: Company reportedly talking with Micron, Western Digital (Oct. 13 2015)
    | Oct. 19, 2015, 4:38 AM
  • 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. 14, 2015, 3:10 PM | 4 Comments
  • Oct. 6, 2015, 5:23 AM
    • Making a big ruckus in this morning's news is the European Court of Justice's ruling that deemed a 15-year-old data-sharing pact between the EU and U.S. invalid. The decision cannot be appealed.
    • "Legislation permitting...access on a generalized basis to the content of electronic communications must be regarded as compromising the essence of the fundamental right to respect for private life," Europe's highest court said in a statement.
    • The ruling has significant implications on how internet groups can operate in the 28-member bloc, and will likely force thousands of companies to overhaul their businesses to avoid breaking the law.
    • ETFs: XLK, VGT, SOXL, SOCL, FDN, GGT, TECL, USD, SMH, SKYY, IYW, IYZ, PNQI, IPK, SOXX, ROM, XSD, VOX, IXP, SOXS, FTEC, TECS, RYT, PBS, IST, IXN, PSI, IGV, QTEC, IGM, FXL, SSG, IGN, PSCT, MTK, REW, XTL, PXQ, EMQQ, FCOM, XSW, PSJ, XT, LTL, ARKW, ARKQ, BST
    | Oct. 6, 2015, 5:23 AM | 3 Comments
  • 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
    | Oct. 1, 2015, 2:01 PM | 26 Comments
  • Sep. 30, 2015, 1:33 PM
    • The Philadelphia Semi Index (SOXX +2.9%) is easily outpacing the Nasdaq's 1.5% gain after Mellanox announced it's buying network processor vendor EZchip for $811M, and Bloomberg reported Synaptics turned down a $110/share buyout offer from a Chinese investment group.
    • In addition, hard drive giant Western Digital has announced it's selling a 15% stake to a Chinese firm at a 32% premium to yesterday's close, news that has given a lift to memory giants Micron and SanDisk.
    • After surging over the prior two years with the help of an industry M&A wave, SOXX is still down 21% from a June peak of $101.80. A broader market selloff, a chip inventory correction, and China-related concerns have weighed.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Sep. 30, 2015, 1:33 PM
  • Sep. 14, 2015, 1:55 PM
    • With the Philadelphia Semi Index (SOXX +0.4%) down ~20% from its June highs - an inventory correction and concerns about PC/smartphone sales have contributed - Evercore's C.J. Muse thinks "now is the time" to buy into the group. He sees 20%-25% potential upside over the next 3+ months, and 5%-10% potential downside.
    • NXP (NASDAQ:NXPI), Micron (NASDAQ:MU), Analog Devices (NASDAQ:ADI), and Maxim (NASDAQ:MXIM) are Muse's top picks among chipmakers. Applied Materials (NASDAQ:AMAT), Lam Research (NASDAQ:LRCX) , and ASML are his top picks among chip equipment firms. Along with the call, Muse has upgraded Analog Devices (ADI +1.9%) to Buy.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Last week: Chip stocks jump as markets rally, Microchip improves guidance, Taiwan reports
    | Sep. 14, 2015, 1:55 PM | 4 Comments
  • Sep. 8, 2015, 3:25 PM
    • The Philadelphia Semi Index (SOXX +3.9%) has risen to its highest levels since mid-August on a day the Nasdaq is posting a 2.3% gain.
    • Likely helping out: Microchip (MCHP +8.4%), still often seen as an industry bellwether (though its commentary accompanying last fall's warning sparked criticism), has adjusted its FQ2 (calendar Q3) revenue and EPS guidance to $545M-$563M ($554M midpoint) and $0.60-$0.66 from a prior $$532M-$569M ($550.5M midpoint) and $0.58-$0.66. The outlook comes after many chipmakers (Microchip included) offered below-consensus calendar Q3 guidance amid an inventory correction, weak PC demand, and slowing Chinese smartphone growth.
    • Microchip's core ops are said to be tracking in-line with prior expectations, and recently-acquired Micrel's above expectations. The 8.6M shares issued in the Micrel deal have been repurchased.
    • Also: Various Taiwanese chipmakers and supply chain firms have reported August sales. Chip packaging/testing firms ASE (ASX +5.9%) and Siliconware (SPIL +4.1%) respectively reported sales were up 5.8% and 5.7% M/M, and up 9.5% and down 4.2% Y/Y.
    • Big gainers include Microchip peers NXP (NXPI +6.8%), Freescale (FSL +5.8%), Silicon Labs (SLAB +4.4%), and Cypress (CY +4.4%). Others include Avago (AVGO +5.8%), Xilinx (XLNX +5.7%), Cavium (CAVM +5.5%), Analog Devices (ADI +6.3%), Synaptics (SYNA +5.4%), Linear (LLTC +4.6%), Cirrus Logic (CRUS +4.7%), IDT (IDTI +4.6%), Sigma Designs (SIGM +4.9%), and chip equipment maker Axcelis (ACLS +8%).
    • SanDisk, ON Semi, and Silicon Motion are benefiting from upgrades/bullish coverage. Apple holds its iPhone event at 1PM ET tomorrow.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Sep. 8, 2015, 3:25 PM | 1 Comment
  • Aug. 24, 2015, 8:03 AM
    • Tech stocks in the U.S. are sharply lower in early action after the sector fell just as hard as broad market averages in China and Japan. Tech heavyweights aren't getting spared amid the carnage.
    • Google (NASDAQ:GOOG) -4.1% premarket to $587.31.
    • Apple (NASDAQ:AAPL) -5.1% to $100.38.
    • Microsoft (NASDAQ:MSFT) -3.9% to $41.41.
    • Facebook (NASDAQ:FB) -3.4% to $83.05.
    • Yahoo (NASDAQ:YHOO) -6.6% to $30.75 and Alibaba (NYSE:BABA) is down 8.7% to $62.26 as concerns over growth in China mount.
    • The Nasdaq 100 futures contract is off 4.8%.
    • Related ETFs: XLK, VGT, HACK, SOXL, FDN, GGT, TECL, USD, SMH, IYW, TDIV, IYZ, SOXX, ROM, XSD, VOX, SOXS, FTEC, TECS, RYT, PBS, PSI, IGV, QTEC, IGM, FXL, SSG, PSCT, IGN, MTK, REW, XTL, PXQ, FCOM, XSW, PSJ, PTF, LTL, TLL
    | Aug. 24, 2015, 8:03 AM | 45 Comments
  • 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. 18, 2015, 2:23 PM | 29 Comments
  • Aug. 7, 2015, 12:12 PM
    • "We’re reducing ratings and/or price targets on Avago, Fairchild, Infineon, Intel, Micron, Texas Instruments and Xilinx owing to industry reports key China-based mobile and comm. infrastructure suppliers are pushing out orders," writes Drexel Hamilton's Rick Whittington. For now, Micron (NASDAQ:MU) is the only name in the group seeing a 2%+ decline. The Nasdaq is down 0.7%.
    • Whittington, a long-time chip stock bull, argues "the chip industry has overbuilt and overstocked for a China OEM community that is struggling to work off inventories," and that OEMs such as Huawei, ZTE, and Xiaomi are pushing out orders. A slew of chipmakers have reported seeing high Chinese inventories this earnings season.
    • Nonetheless, Whittington thinks macro conditions in the U.S., Europe, Japan, Korea, and India remain healthy. He also notes the iPhone 6S and other major phone launches could absorb some excess inventory.
    • Regarding Micron, which Whittington upgraded to Buy just 10 days ago (in response to the 3D XPoint reveal), he reports seeing further DRAM spot price declines and reports of new contract price cuts in August, something which leads him to think PC demand remains soft. Micron rallied earlier this week on a report Samsung is slashing PC DRAM output and shifting capacity towards mobile DRAM, and has notified OEMs it won't be cutting prices in August.
    • Some of Whittington's concerns about chip demand/inventories have arguably been priced in: The Philadelphia Semi Index (NASDAQ:SOXX) is down 16% from a June peak of $101.80.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Aug. 7, 2015, 12:12 PM | 27 Comments
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