Stephen Simpson, CFA
Paulo Santos • 30 Comments
Nov. 21, 2014, 5:47 PM
- Qualcomm (NASDAQ:QCOM) has sold its Taiwanese Mirasol display plant to TSMC (NYSE:TSM) for $85M, per a TSMC regulatory filing.
- Taiwanese media previously reported Qualcomm was set to sell the plant, which it once planned to invest up to $975M in, and that TSMC wanted to use it to expands its chip assembly/testing ops.
- Meanwhile, the sell-side has been busy debating Qualcomm's analyst day guidance and commentary, with much of the attention on focused on the company's China remarks. Cowen's Tim Arcuri is somewhat encouraged. "The company provided no new substantive regulatory (NDRC/FTC/EU) updates, but seemed to strike a more definitive tone about ultimately collecting royalties on 'substantially all LTE devices.'"
- That, in turn, makes Arcuri think the most likely outcome for the China dispute is "some combination of a fine, potential changes in the royalty rate structure for all of [Qualcomm's] licensees operating in China, and/or increased investment in the local China semiconductor supply chain."
- Bernstein's Stacy Rasgon is less positive. "We do not believe the near-term regulatory issues (particularly China) are truly the primary issue anymore ... The bigger issue being how the rise of China, at scale, is changing the overarching market dynamics that Qualcomm plays."
Nov. 10, 2014, 3:55 PM
- Taiwan's Economic Daily News reports Qualcomm (QCOM +0.1%) is set to sell a plant in Longtan, Taiwan to top foundry partner TSMC (TSM +2%) for "several billion [Taiwanese] dollars." One U.S. dollar is equal to 30.59 Taiwanese dollars.
- Back in 2011, Qualcomm announced plans to invest up to $975M to build a plant in Longtan to manufacture Mirasol color e-ink displays. But the following year, the company declared it was ending Mirasol production due to manufacturing challenges. TSMC reportedly wants to use the plant to expand its chip packaging/testing ops.
- Separately, TSMC has reported its October sales: With the help of strong Apple A8 CPU orders, revenue rose 7.9% M/M and 55.9% Y/Y to NT$80.74B ($2.64B). The company previously forecast total Q4 sales of NT$217B-$220B, good for 4%-5% Q/Q growth.
Jun. 11, 2014, 11:22 AM
- Bloomberg's report follows an April WSJ report calling Globalfoundries "the lead candidate" to buy IBM's (IBM -0.6%) chip manufacturing/foundry ops. Notably, Globalfoundries is said to be more interested in Big Blue's chip engineers and IP than its relatively old wafer fabs.
- A source states the unit has been losing as much as $1.5B/year. Its Q1 sales fell 16% Y/Y amid continued share losses to Globalfoundries, Samsung, and foundry giant TSMC (TSM -0.5%).
- Nonetheless, the business claims high-profile foundry clients such as Cisco and Juniper, and has a history of leading the way in mass-producing new chip technologies/materials, such as silicon-on-insulator (SOI) and silicon germanium (SiGe).
- That could help Globalfoundries as it tries to gain ground against TSMC, which has a long list of blue-chip mobile processor, GPU, and FPGA clients.
- The WSJ's report stated the unit has received $1B+ bids - less than the $2B+ IBM was initially seeking.
Apr. 3, 2014, 4:43 PM
- Private Globalfoundries is "the lead candidate" to acquire IBM's (IBM -0.4%) struggling chip manufacturing/foundry ops, sources tell the WSJ. Market leader TSMC (TSM -0.5%) is said to have dropped out of talks, and though Intel is said to be involved, Globalfoundries is showing more interest.
- Sources add a deal isn't imminent, and that price remains an issue: IBM originally wanted $2B+ for the business, whose sales tumbled 33% Y/Y in Q4 (evidence of share loss) and is in the midst of seeing layoffs, but initial bids have only been north of $1B.
- The business was first reported to be on the block in early February. Bernstein has estimated it had 2013 revenue of $1.75B, and an op. loss of $130M.
- Though presenting integration challenges, acquiring IBM's chip unit would give Globalfoundries more scale as it battles against TSMC, which is estimated to have nearly 50% of the foundry market and claims a long list of blue-chip clients.
- TSMC shares slipped yesterday after Globalfoundries announced a wafer supply deal with ex-parent AMD that includes GPU and console processor manufacturing (thus far handled by TSMC). Nonetheless, Digitimes has reported TSMC's capacity is booked through the end of Q3 thanks to strong mobile/PC chip demand.
Mar. 20, 2013, 12:24 PM
Panasonic (PC +0.6%) is in talks with TSMC (TSM +0.8%) and HTC to sell its mobile phone business, Japan's Sankei Shimbun reports. TSMC seems an odd choice to buy the unit, given the world's biggest chip foundry hasn't shown any interest in being a phone manufacturer (either as an OEM or ODM). HTC is a little more plausible, but the company has its own problems to deal with. Panasonic, which last year took a $3B write-down partly tied to its phone ops, has already said it's exploring options for its TV and healthcare units.| Mar. 20, 2013, 12:24 PM
Jul. 27, 2012, 3:15 AM
Jul. 18, 2012, 10:26 AM
Privately-owned chip foundry Globalfoundries will probably buy IBM's chip division, says industry consultant Mike Bryant, citing rumors his firm has heard. IBM's chip division has been struggling, and saw a 13% Y/Y revenue drop in Q1. Acquiring it would give Globalfoundries additional scale to compete against top foundry TSMC (TSM), though integrating IBM's various plants and manufacturing processes wouldn't be a picnic.| Jul. 18, 2012, 10:26 AM | 3 Comments
Jul. 2, 2012, 4:02 PM
Renesas (RNECY.PK) will announce a restructuring plan this week that will include laying off 1/3 of its work force and shuttering half of its chipmaking plants, Reuters reports. In exchange, Renesas will receive ¥100B ($1.26B) worth of loans from shareholders Hitachi (HIT), Mitsubishi, and NEC, along with four banks. A Saturday report from The Nikkei claimed Renesas was looking to sell or close 10 plants. TSMC (TSM - previous) could be interested in some of them.| Jul. 2, 2012, 4:02 PM
Apr. 16, 2012, 1:16 PM
TSMC (TSM) is looking to buy a chipmaking facility from DRAM vendor ProMOS, reports Digitimes. Such a deal would be further evidence of the shakeout taking place in the DRAM industry (one that's bolstering prices for MU and Samsung), and also of the chip industry's changing dynamics: ProMOS and other DRAM makers have been slashing output due to soft PC demand, while TSMC recently raised its 2012 capex forecast due to strong mobile chip orders.| Apr. 16, 2012, 1:16 PM