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Yesterday, 12:29 PM
- Chipmakers NXP (NXPI -9.3%) and STMicroelectronics (STM -5.6%), CPU/GPU core developer ARM (ARMH -5.5%), and ad tech firm Criteo (CRTO -9%) are down sharply after European indices closed with big losses. France's CAC-40 fell 3.4%, Germany's DAX 3.3%, and the Euro Stoxx 50 3.3%. The Nasdaq is down 2.1%, and the S&P 1.8%.
- NXP has more than given back the Thursday gains seen after the company posted a Q4 beat and issued in-line Q1 guidance. Today's losses come in spite of an OTR Global note stating NXP could gain NFC chip share with Samsung's Galaxy S7 relative to the S6; the S6 heavily relied on Samsung NFC radios.
- STMicro is two weeks removed from announcing (with its Q4 report) job cuts and plans to discontinue set-top/home gateway chip R&D. ARM and Criteo report on Wednesday morning.
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
Wed, Jan. 27, 10:24 AM
- Along with its Q4 results, Q1 guidance, and restructuring plans, STMicroelectronics (STM +4%) says it's cutting 1,400 jobs - 430 in France through a voluntary departure plan, 670 in Asia, and 120 in the U.S. The company expects $170M/year in savings and $170M in restructuring costs.
- Along with the job cuts, STMicro says it's discontinuing "the development of new platforms and standard products" for its set-top and home gateway IC lines. 600 employees will be redployed from the company's set-top chip ops to "support principally ST's growth ambitions in digital automotive and microcontrollers."
- STMicro: "The slower than expected market adoption of leading-edge products and increasing competition on low-end [set-top] boxes, combined with the required high level of R&D investment, has led this business to generate significant losses in the course of the last years." Broadcom (BRCM -0.1%), which is due to officially be acquired by Avago (AVGO -3.1%) on Feb. 1, has been STMicro's top rival in the set-top/home gateway IC space, and stands to benefit from STMicro's move.
- The French government has responded to the news by stating STMicro needs a new strategy. Spokesman Stephane Le Foll: "We want a new strategy put in place to allow this company to create value and recover."
- STMicro continues trading higher post-earnings. Avago is joining other iPhone/iPad suppliers in selling off following Apple's earnings/guidance. the Nasdaq is down 1.2%.
Wed, Jan. 27, 9:22 AM
Wed, Jan. 27, 9:22 AM
- In addition to slightly beating Q4 sales estimates (while slightly missing on EPS), STMicroelectronics (NYSE:STM) is guiding for Q1 revenue to be down 3% Q/Q (+/- 3.5%). At the midpoint, that implies revenue of $1.62B, above a $1.61B consensus. That's going over well in light of low expectations - STMicro sold off in October after providing weak Q4 guidance partly blamed on China, and other chipmakers have also seen top-line pressures.
- STMicro also discloses it has restructured into three business units (each reporting to CEO Carlo Bozotti) to "align with the company's strategic focus on Smart Driving and on Internet of Things applications": An Automotive & Discrete Group, a Microcontrollers & Digital ICs Group, and an Analog & MEMS Group.
- Carmelo Papa, previously the head of STMicro's Industrial & Power Group, is retiring. Also: COO Jean-Marc Chery is now in charge of the company's Technology & Manufacturing organization.
- Product line performance: Analog & MEMS chip sales (possibly hurt by Apple share loss) -22% Y/Y in Q4 to $207M. Automotive -6% to $408M. Industrial & Power Discrete -15% to $392M. Digital Product Group (affected by set-top weakness and the ST-Ericsson wind-down) -18% to $212M. Microcontroller, Memory & Secure MCU +14% to $442M.
- Financials: Gross margin was 33.5%, -130 bps Q/Q and -30 bps Y/Y; Q1 GM guidance is at 33% (+/- 2%). SG&A spend fell by $4M Y/Y to $231M; R&D spend fell by $24M to $352M. STMicro ended Q4 with $2.1B in cash/investments and $1.6B in debt.
- Shares have risen to $6.80 premarket.
- STMicro's Q4 results, earnings release
Wed, Jan. 27, 1:31 AM
Tue, Jan. 26, 5:30 PM
Nov. 11, 2015, 5:37 PM
- "Our priority is No. 1: growth, and No. 2: resolve the problem in our digital products group," said Carlo Bozotti at a Morgan Stanley conference talk. Though he wouldn't rule out the possibility of STMicroelectronics (NYSE:STM) engaging in M&A in the future, he declared it's "not on the table today."
- A long list of peers, including microcontroller rivals such as NXP, Freescale, Infineon, and Microchip, have been party to large mergers or acquisitions. Bozotti recently denied STMicro is interested in analog chipmaker Fairchild, after a report to the effect popped up.
- Bozotti also suggested the industry inventory correction that contributed to STMicro's weak Q4 guidance could continue into Q1. "We did not expect such a material correction of inventory in the fourth quarter and maybe first quarter of next year ... Frankly in the last few weeks it (the global semiconductor market) was not that great."
Oct. 29, 2015, 3:58 PM
- On his company's Q3 earnings call, STMicroelectronics (STM -5.7%) CEO Carlo Bozotti denied the French/Italian chipmaker is interested in acquiring analog/power management IC vendor Fairchild Semi (FCS -5.7%). Bloomberg reported on Tuesday STMicro is weighing a bid for Fairchild, two weeks after having reported Infineon and ON Semi have held talks with the company.
- Both STMicro and Fairchild are down sharply, the former due to its soft Q4 guidance. Many other chip stocks are in the same boat.
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, 9:40 AM
- In addition to missing Q3 revenue estimates (while beating on EPS), STMicroelectronics (NYSE:STM) is guiding for Q4 revenue to be down 6% Q/Q (+/- 3.5%). That implies revenue of $1.59B-$1.72B, below a $1.81B consensus.
- Echoing remarks rival/fellow European chipmaker NXP made in its Q3 report yesterday evening, STMicro says it experienced "softer market demand as we progressed through the quarter." It adds a manufacturing issue at a sub-contractor affected microphone sales, and that "lower consumer spending in China is impacting the dynamics of the distribution channel in the region and the industry more globally, particularly in automotive."
- Analog/MEMS, automotive, industrial & power discrete, and digital product group (DPG) revenue all fell Y/Y. Microcontroller, memory & secure MCU revenue rose. STMicro says it's "making progress in narrowing the options" for DPG (previous), and plans to announce a final decision by early 2016.
- Q3 results, PR
- Two days ago: STMicro reportedly mulling bid for Fairchild
- Three days ago: French/Italian governments reportedly pressuring STMicro to cut dividend
Oct. 29, 2015, 9:13 AM| Oct. 29, 2015, 9:13 AM
Oct. 29, 2015, 5:05 AM
- STMicroelectronics (NYSE:STM): Q3 EPS of $0.12 beats by $0.03.
- Revenue of $1.76B (-6.9% Y/Y) misses by $40M.
Oct. 28, 2015, 5:30 PM
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Oct. 27, 2015, 11:34 AM
- Bloomberg reports STMicroelectronics (STM -2.1%) is weighing a bid for U.s-based analog/power management IC vendor Fairchild Semi (FCS +4.8%). Sources caution STMicro might decide against such a move in favor of focusing on bottom-line improvement.
- Two weeks ago, Fairchild was rumored to be talking with ON Semi and Infineon about potential deals. Yesterday, Bloomberg reported the French and Italian governments want STMicro to cut its dividend in order to have more flexibility to up its R&D spend.
Oct. 26, 2015, 2:20 PM
- Bloomberg reports the French and Italian governments, which collectively own 27.5% of STMicroelectronics (NYSE:STM), want the chipmaker to cut its dividend to give it more flexibility to up its R&D spend.
- STMicro currently sports a 5.1% yield, well above that of most dividend-paying chip stocks. Meanwhile, the company is expected by the Street to see revenue drop 4.5% in 2015. Sales have been pressured by the ST-Ericsson JV wind-down, weak PC sales, set-top IC competition from Broadcom, and microcontroller competition from a variety of rivals.
- Shares have fallen towards $7.50. In addition to Bloomberg's report, a weak Q3 report from fellow European chipmaker Dialog Semi could be weighing. STMicro's Q3 results arrive on Thursday morning.
STMicroelectronics NV designs, develops, manufactures and markets semiconductor products used in different microelectronic applications, including automotive products, computer peripherals, telecommunications systems, consumer products, & control systems.
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