Mon, Feb. 1, 4:59 AM
- After much hype and anticipation, Nokia (NYSE:NOK) has settled a lengthy patent dispute with Samsung (OTC:SSNLF), but investors were disappointed by the financial terms of the deal.
- The agreement will lift sales of the company's patent division to around €1.02B ($1.1B) in 2015, including catch-up payments, from €578M in 2014.
- The annualized run-rate for the unit, which will become a smaller part of Nokia after its proposed €15.6B takeover of Alcatel-Lucent (NYSE:ALU), is now about €800M.
- NOK -12.5%; ALU -12.7% premarket
- Previously: Nokia-Samsung patent verdict expected within days (Jan. 31 2016)
Fri, Jan. 15, 2:26 PM
- Up strongly yesterday as markets rallied and TSMC set a 2016 capex budget of $9B-$10B (up from 2015 capex of $8.12B), a slew of chip equipment makers are seeing big losses amid a 3.3% Nasdaq drop after Intel (NASDAQ:INTC) used its Q4 report to disclose its 2016 capex budget has been cut by $500M to $9.5B (+/- $500M). That's still up by $2.2B at the midpoint from 2015's $7.3B, but lower than the $10.1B-$11B spent annually from 2011-2014.
- On Intel's earnings call (transcript), CEO Brian Krzanich indicated the budget cut is related to logic (i.e. CPU) capex, and insisted no specific major factor was responsible. "As we went from the investor meeting into the actual firm forecast for 2016, the team has just sharpened down all the numbers and went through it in more detail."
- Major decliners: Applied Materials (AMAT -4.3%), Lam Research (LRCX -6.5%), KLA-Tencor (KLAC -3.8%), ASML (ASML -6.3%), MKS Instruments (MKSI -3.9%), Ultratech (UTEK -4.9%), Teradyne (TER -3.1%), Advantest (ATE -4.6%), and Ultra Clean (UCTT -5.2%).
- Stifel's Patrick Ho argues the selloff is a buying opportunity. "[W]e have already seen positive preannouncements with two of our names (Ultra Clean, Axcelis) and we expect more upside surprise than those on the downside ... We believe 3D NAND momentum continues to build while there has been some initial buying for 10nm logic (Intel) and foundry (TSMC). We maintain our industry thesis that 3D NAND spending will be the largest incremental driver for spending in 2016, with upside potential from the foundries in 2H16 related to 10nm investments." He likes Applied, Lam, Teradyne, and MKS.
- Credit Suisse's Farhan Ahmad notes Applied, ASML, and Lam have relatively low Intel exposure, and that a Korea Times report indicates DRAM/NAND flash maker SK Hynix's capex might increase in 2016. On the other hand, he's worried current expectations for EUV system shipments (important for ASML) are too optimistic.
- Samsung (OTC:SSNLF), another top-3 chip equipment buyer, reports after the Jan. 21 close. Citi's Atif Malik sees Samsung cutting capex due to lower DRAM-related spending. "We think Samsung moderating memory spend, particularly DRAM, would improve memory supply-demand balance and sustainability of memory equipment spend in C16."
Dec. 30, 2015, 10:02 AM
- Korea's Electronic Times reports Samsung (OTC:SSNLF) and LG Display (LPL -0.6%) are close to final deals with Apple (NASDAQ:AAPL) to supply OLED displays for iPhones.
- It adds the companies plan to spend a combined KRW15T ($12.8B) in capex over the next 2-3 years to expand their OLED capacity, and that (in-line with past deals with suppliers) Apple will likely provide some funding to help the companies with their investments. Samsung will likely get bigger order volumes than LG.
- The report follows one from Japan's Nikkei a month ago stating Apple will launch iPhones featuring OLEDs in 2018, and that the company will work with suppliers "over the next year or so" to see if it can obtain enough displays and eliminate technical issues such as performance degradation.
- OLED IP/materials supplier Universal Display (OLED +5.1%) is rallying once more, after having previously done so on the Nikkei report. Shares are within $3 of a 52-week high of $57.93, and up 99% YTD.
Nov. 19, 2015, 9:03 AM
- Netlist (NASDAQ:NLST) is partnering with DRAM/NAND flash giant Samsung (OTC:SSNLF) to create server memory modules (under the NV-P name) that pair Samsung's NAND and DRAM with Netlist's HyperVault unified memory architecture (uses NAND as a low-cost, always-on, DRAM alternative).
- The companies will "work to create a standardized product interface to facilitate rapid market adoption," and target "a large group of customers in cloud computing, big data, and server and storage markets."
- As part of a patent cross-licensing deal, Netlist will receive $8M in cash and a $15M investment. The deal also calls for "additional exchange of consideration as progress is made" towards a product launch.
- Netlist has jumped to $1.12 premarket. The deal comes as Samsung rivals Intel and Micron partner to commercialize 3D XPoint, a next-gen non-volatile memory that's much faster than NAND and cheaper/denser than DRAM. SanDisk and HP are working to develop something similar. Target applications include high-speed processing for large big data/analytics datasets.
Nov. 18, 2015, 10:17 AM
- The staff of South Korea's Fair Trade Commission (KFTC) allege some of Qualcomm's (NASDAQ:QCOM) IP licensing practices are illegal, and recommends a fine and business practice changes.
- Qualcomm insists its practices are in-line with global norms, and plans to challenge the staff's findings before the KFTC commission. The company has also been dealing with probes from the U.S. FTC and EU regulators; its Chinese dispute was settled in February. EU regulators have been examining the links between Qualcomm's chip and licensing ops; the FTC has been probing the potential violation of obligations to license patents under FRAND terms.
- The allegations come at a time when Qualcomm's relationship with major customer/Korean IT giant Samsung (OTC:SSNLF) has become quite complicated. Samsung opted to exclusively use its Exynos app processors in the Galaxy S6 and Note 5, and also used its own baseband modems in many versions. Qualcomm's Snapdragon 820 baseband/app processor (next-gen flagship, expected to be manufactured by Samsung) will reportedly go into at least some Galaxy S7 models. However, Samsung recently unveiled the Exynos 8890, a baseband/app processor with custom ARM cores and support for 600Mbps peak 4G download speeds.
- Qualcomm recently officially launched the 820, while promising 30% lower power consumption than the Snapdragon 810 (believed to have overheating issues), significantly improved performance via its custom Kryo CPU cores and Adreno 530 GPU, and up to 600Mbps download speeds via an integrated X12 modem. A recent FierceWireless article (has been taken down) indicated the X16, a modem delivering 1Gbps peak download speeds, would arrive in the summer of 2016.
- Shares have fallen to new 52-week lows.
- Update: Bernstein's Stacy Rasgon notes only some of the allegations made in a 2009 KFTC staff report regarding Qualcomm wound up being accepted by the commission. "At this point, we have no idea what the Commission will determine, nor what remedies might be imposed, and we would expect years of appeals before anything concrete (beyond fines) would occur. Nevertheless, the nature of the charges outlined in the Examiner’s report is likely going to cause additional angst among investors who are already worried about the long-term sustainability of Qualcomm’s licensing business..."
Aug. 3, 2015, 2:29 PM
- Taiwan's Economic Daily News reports Samsung (OTC:SSNLF) plans to cut standard DRAM production by 30%, and shift capacity to mobile DRAM ahead of the iPhone 6S launch. Rival Micron (NASDAQ:MU) is up strongly on a day the Nasdaq is down 0.7%.
- The paper also reports Samsung has notified OEMs it won't be cutting DRAM prices as of August - a move that could lead to higher prices - and (in-line with past reports) that the iPhone 6S will have 2GB of DRAM, up from the 1GB found in the iPhone 6.
- PC DRAM price pressure (caused in no small part by weak PC sales) has been weighing on Micron: The company's DRAM ASP fell 10% Q/Q in FQ3 (the May quarter); FQ4 guidance is for a mid-to-high single-digit drop.
- JPMorgan reported today PC DRAM contract prices fell 15% in July, more than it expected. The industry is hoping Windows 10 (launched last Wednesday to fairly good reviews) will help boost demand.
- Related ticker: OTC:HXSCF
Mar. 12, 2015, 12:45 PM
- Universal Display (NASDAQ:OLED) has rallied to new 52-week highs today. Its move has come on volume of 1.26M shares, well above a 3-month daily average of 662K.
- Signs of strong early demand for Samsung's (OTC:SSNLF) Galaxy S6 and S6 Edge (unveiled on March 1, going on sale on April 10) could be giving the OLED materials/IP provider a lift. Samsung has announced S6 pre-orders have topped 20M, and Korea's Electronic Times has reported Samsung has upped its April S6/S6 Edge production target by 1M to 8M.
- The S6 sports a quad-HD OLED display that requires more materials than the S5's 1080p display. Its use of a metal/glass body (as compared with the plastic bodies of its predecessors) has been well-received.
- Samsung's shares have already benefited from S6 enthusiasm: Though they fell overnight in Seoul, they're still up 7% since the March 1 launch event.
Feb. 24, 2015, 9:44 AM
- The Korea Times reports Samsung (OTC:SSNLF) has struck deals with Apple and LG to supply DRAM for upcoming phones, with Samsung handling "at least half" of Apple's DRAM needs for the iPhone 6S. Micron (NASDAQ:MU), a major iPhone DRAM supplier, has sold off in response.
- The paper adds the deals are estimated to be worth billions, and that Apple could "ask more from Samsung" depending on the situation. The report comes amid expectations Samsung will manufacture Apple's A9 CPU (expected to go into the 6S), using its 14nm manufacturing process.
- DRAMeXchange recently estimated Samsung had a 46.1% Q4 DRAM share, down from 50.7% in Q3. With the help of iPhone-related orders, Micron's share rose to 23.3% from 19%; SK Hynix's share rose to 28% from 27.6%. Samsung is generally seen as the most aggressive of the big-3 DRAM vendors in terms of growing production.
Jan. 21, 2015, 7:29 PM
- Though both companies have issued statements denying M&A talks, Samsung (OTC:SSNLF) is "actively pursuing a plan to take over or buy a significant stake in BlackBerry (NASDAQ:BBRY)," Canada's Financial Post reports.
- The paper has obtained a document prepped for Samsung by i-bank Evercore that "outlines the case for, and the potential structure of a possible purchase of BlackBerry." Though the doc was created in Q4 2014, a source says Samsung remains interested. “I can tell you Samsung is contemplating a purchase. It’s still being pursued right now. Samsung is still evaluating their options."
- BlackBerry soared a week ago after Reuters reported Samsung had proposed buying the company for a price between $13.35-$15.49/share. Shares quickly gave back most of their gains after BlackBerry denied having talked with Samsung about a buyout offer. Samsung later provided its own denial.
- BlackBerry has jumped in AH trading to $10.65.
Jan. 16, 2015, 5:27 PM
- SamMobile (pretty accurate with Samsung scoops) reports Samsung (OTC:SSNLF) is "ditching the swipe-based fingerprint sensor" found on the Galaxy S5 and Note 4 (among other products) in favor of a touch-based sensor similar to Apple's Touch ID.
- Like Samsung's existing sensors, the touch area sensors will be built into home buttons. "You wouldn’t have to swipe your finger on the sensor anymore; instead, you would just place your fingertip on the home key – at any angle – then lift it off, and that’s it."
- Synaptics (NASDAQ:SYNA) supplies the fingerprint sensors for S5/Note 4; the company could get an ASP boost from Samsung's adoption of a touch area sensor. During its FQ1 CC (transcript), Synaptics mentioned it expected to start initial production of a touch area sensor in FQ2 (calendar Q4), and "to see phones in the market in early calendar 2015," customer launch timings permitting.
- Synaptics' FQ2 report arrives on Jan. 29.
- Update: It's possible Synaptics rival Fingerprint Cards (FPC - recently partnered with Atmel) has the S6 design win. In September, FPC said it had won a fingerprint sensor design win for "a home button by a Global Tier 1 OEM customer in a flagship model with a target launch date in Q1 2015."
Jan. 14, 2015, 5:38 PM
- In response to Reuters' report, BlackBerry (NASDAQ:BBRY) says it "has not engaged in discussions with Samsung (OTC:SSNLF) with respect to any possible offer to purchase BlackBerry."
- BBRY -11.2% AH. Shares are still up 15% from yesterday's close.
- Update: The Globe and Mail reports BlackBerry has "shunned a handful of takeover overtures in recent months as its board of directors and largest investor continues to support a restructuring strategy that they expect will deliver greater shareholder value than current acquisition offers."
Jan. 14, 2015, 4:14 PM
- Samsung (OTC:SSNLF) proposed acquiring BlackBerry (BBRY +29.8%) for a price between $13.35-$15.49/share, according to a Reuters source. BlackBerry closed yesterday at $9.71, and has closed today at $12.60. Shares are up another 3.2% AH to $13.02.
- According to documents, Samsung's proposed acquisition range implies an enterprise value of $6B-$7.5B, after factoring $1.25B in convertible debt. Execs from both companies reportedly met last week.
- Reuters states Samsung is interested in BlackBerry's patent portfolio. BlackBerry could also mesh with Samsung's efforts to grow its enterprise presence, strengthen its embedded/IoT offerings, and (though this is easier said than done) lower its Google dependence. The companies announced a BES12-focused enterprise partnership in November.
- Previously: Samsung reportedly approached BlackBerry about acquisition
- Update: BlackBerry denies having talked with Samsung about a buyout offer.
Jan. 14, 2015, 3:50 PM
Jan. 13, 2015, 2:20 PM
- Northland Securities reports Samsung (OTC:SSNLF) is purchasing more DRAM equipment, and plans to ramp capacity. The firm thinks Micron (MU -2.3%) is likely to see the most pressure from Samsung's move, since it's a high-cost producer. (source: Notable Calls)
- Micron is adding to the Monday losses it saw on account of SanDisk's Q4 warning. Shares also sold off in July in response to Samsung capacity expansion fears, but later recovered .
- Goldman has been voicing concerns about rising DRAM capex for a while. Micron, for its part, struck a positive tone during last week's FQ1 CC about DRAM supply/pricing, and has long been arguing the industry's consolidation has changed its dynamics.
- Samsung had an estimated 41.7% Q3 DRAM market share. SK Hynix (HKSCF) had 26.5% of the market, and Micron 23.7% (source: Statista).
Jul. 31, 2014, 11:18 AM
- Samsung's (OTC:SSNLF, OTC:SSNGY) memory sales were a strong point for the company in Q2: They rose 10% Q/Q and 21% Y/Y to KRW6.92T ($6.7B). But the company also hiked its 2014 DRAM industry bit supply forecast to low-30% growth from a prior high-20%. Samsung itself expects to grow bit production at a high-40% rate.
- Morgan Stanley notes Samsung once forecast mid-20% industry growth, and that it's increasing capex to make another production line DRAM-capable in 2015. MS reported earlier this month Samsung is planning to hike its DRAM output.
- Micron (MU -7.7%), whose shares have soared on expectations a favorable DRAM supply/demand balance will continue, isn't taking the news well. Samsung's production hike is also a negative for SK Hynix (OTC:HXSCL).
- Samsung fell 3.7% overnight in Seoul, though that arguably had more to do with the performance of its mobile ops than its chip ops. Weak high-end tablet sales and smartphone share losses to Chinese OEMs led mobile sales to fall 12% Q/Q and 21% Y/Y to KRW27.5T ($26.6B).
- The company expects 2H mobile sales to grow with the help of seasonality, but also (in what's at least a partial reference to the iPhone 6) cautions competition is set to intensify.
- Samsung's Q2 slides (.pdf)
Jul. 9, 2014, 10:18 AM
- Morgan Stanley reports Samsung (SSNLF, SSNGY) plans to hike its DRAM output. Micron (MU -3.5%), whose shares have risen over 6x from their fall 2012 lows, is selling off in response. Peer SK Hynix (HXSCL) fell 4.1% in Seoul.
- Digitimes recently reported Samsung is thinking of building a new DRAM fab in 2015, as industry consolidation and strong mobile and server-related demand keep prices high. The site also reported spot prices for 4Gb DDR3 DRAM chips could rise to $4.80-$5.00 in Q3, after rallying to an 18-month high of $4.35 in late June.
- TrendForce estimates Samsung had 35.5% of the global branded DRAM market in Q1, SK Hynix 28.2%, and Micron 28%.
- This morning, SA author David Alton Clark argued Micron investors should tread carefully at current levels, given the DRAM industry's historical cyclicality.
- Previous: Samsung reportedly planning to hike DRAM contract prices
Industry: Semiconductor - Broad Line
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