Mon, May 18, 9:15 AM
Mon, May 18, 7:25 AM| 16 Comments
Tue, May 12, 7:33 PM
- Intel (NASDAQ:INTC) is partnering with programmable ASIC maker eASIC (EASI - recently filed for an IPO) to create custom Xeon CPU products that (per the companies) can deliver up to 2x the performance acceleration of a solution using an FPGA for programmability. Web/cloud service providers (major buyers of custom Xeon parts) are targeted, as are security and big data/analytics workloads.
- eASIC, whose customers include Seagate, Ericsson, and Huawei, argues ASICs designed by its clients deliver the programmability, development cost, and deployment time advantages of FPGAs (to a large extent, at least), while maintaining the size, unit cost, performance, and power draw advantages of standard ASICs. 60%-120% and 50%-80% performance and power advantages are respectively claimed over comparable FPGAs.
- The alliance could act as a hedge against reported acquisition target Altera (NASDAQ:ALTR), whom Intel has partnered with to create solutions that put a Xeon CPU and Altera FPGA in the same package. Web/cloud providers looking to use FPGAs to accelerate processing for algorithms they've developed are among the intended clients. FPGAs can still deliver a level of on-the-fly programmability that eASIC's offerings can't.
- For those interested, eASIC filed its latest IPO prospectus last week. The company had 2014 revenue of $67.4M (+126% Y/Y), and a net loss of $1.1M. As of March 31, eASIC had enabled over 200 custom IC designs and shipped over 21M chips.
- Last week: Intel launches new high-end Xeon CPUs
Fri, May 1, 9:13 AM
Thu, Apr. 30, 4:32 PM
- Intel (NASDAQ:INTC) signed a standstill agreement with Altera (NASDAQ:ALTR) amid M&A talks, Reuters reports. However, the agreement is said to expire on June 1, after which Intel would be free to launch a hostile bid if it wishes. Sources state it's "unclear" whether Intel will make such a move (through a public tender offer) once the standstill expires.
- The news service adds Intel discussed a $58/share bid for Altera in February, but lowered its offer after signing an NDA and poring through Altera's books - Altera's Q1 results and Q2 guidance appear to explain Intel's thinking. Bloomberg previously reported of a $54/share offer.
- ALTR +5% AH to $43.78. Earlier this week, major Altera investor TIG Advisors demanded the FPGA maker resume Intel buyout talks.
- Prior Intel/Altera coverage
Mon, Apr. 27, 5:34 PM
- Arguing "stockholders should have right to choose between Intels reported $54 cash offer and [the] uncertain future of standalone Altera (NASDAQ:ALTR)," TIG Advisors (1.5% stake) is urging Altera investors to vote against lead independent director T. Michael Nevens' reelection at the FPGA maker's May 11 annual meeting. It's too late for investors to submit alternate candidates.
- TIG argues rejecting Nevens will "send a strong signal to the Board to immediately re-engage with Intel." It also thinks the company's reported decision to reject a $54/share Intel offer is unsurprising given "Altera has had a history of overestimating its growth rate."
- The firm thinks Altera would need to produce annual EPS of $2.70 to justify a $54/share valuation, something it thinks is "unlikely to happen over the next few years given the outlook for a secular decline in worldwide base station deployments in 2016-2019 until 5G starts ramping." The 2015 EPS consensus is at $1.31.
- Bloomberg reported two weeks ago TIG, Cadian Capital, and other investors were pushing Altera to restart Intel talks. The company posted a Q1 miss and provided light Q2 guidance last Thursday.
Fri, Apr. 24, 2:03 PM
- Though the Nasdaq is up 0.7% thanks to market-pleasing earnings from Google, Microsoft, and Amazon, chip stocks (SOXX -2.1%) are adding to their Thursday losses after Freescale, Altera, Microsemi, and Maxim joined the ranks of chipmakers offering soft Q2 guidance; Texas Instruments, Xilinx, and Qualcomm did so on Wednesday afternoon.
- NXP (NXPI -4.3%), set to merge with Freescale in a cash/stock deal, is selling off ahead of its April 29 Q1 report. RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.4%), and Avago (AVGO -5.2%) are also seeing steep declines.
- Other decliners include a slew of telecom/networking, microcontroller, and analog/mixed-signal chipmakers. The group includes Marvell (MRVL -3%), ON Semi (ON -6.9%), Atmel (ATML -3.3%), Cypress (CY -4%), Lattice (LSCC -3.9%), Semtech (SMTC -6.9%), Cavium (CAVM -6%), PMC-Sierra (PMCS -2.9%), InPhi (IPHI -3.8%), and Silicon Labs (SLAB -2.9%). Chip packaging/testing firm Amkor (AMKR -5.7%) is also off; its Q1 report arrives on Monday.
- As was the case with TI and Xilinx, soft telecom equipment chip demand was often blamed by those guiding light yesterday afternoon. Freescale (FSL -3.5%) stated it expects network processor division sales to be down Q/Q and RF (base station power amplifier) division sales to be flat. Microcontroller, automotive, and analog and sensor division sales are expected to rise.
- Altera (ALTR -3.3%) stated its "telecom and wireless business, and particularly our wireless business globally looks to be quite weak in [Q2], while the rest for our business will in aggregate be flat to slightly up." Regarding its Q1 miss, the company notes "Industrial, test, compute and storage, and to a lesser extent military, fell short of our forecast" (share loss to Xilinx?).
- Maxim reports seeing "broad-based softness in communications infrastructure demand" and soft industrial bookings to go with healthier mobile/auto demand. The Galaxy S6 appears to be giving a lift to Maxim's mobile sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Apr. 23, 7:17 PM
- Arguably providing more ammo for those disgruntled shareholders pushing for an Intel (NASDAQ:INTC) deal, Altera (NASDAQ:ALTR) forecasts Q2 revenue will be down 4%-8% Q/Q. That implies a range of $400.6M-$418M, far below a $492.1M consensus.
- Telecom/wireless revenue (-12% Y/Y, 42% of total revenue) was a soft spot in Q1. As was industrial automation, military, & automotive (21% of revenue -7%). Networking, computer, & storage (17% of revenue, +2%) and other products (20% of revenue, +7%) were healthier. FPGAs were 84% of revenue, and CPLDs 8%. Book-to-bill was below 1.
- Shares have dropped to $40.45 AH, after having fallen 1.6% in regular trading in response to Xilinx's numbers, which were blamed to a large extent on soft mobile infrastructure demand. For those keeping score, Altera is now 26% below Intel's rumored $54/share offer price.
- Q1 results, PR
Thu, Apr. 23, 4:20 PM
Wed, Apr. 22, 7:12 PM
- In addition to missing FQ4 revenue estimates (while beating on EPS), Xilinx (NASDAQ:XLNX) is guiding for FQ1 revenue to be flat to down 4% Q/Q. That implies a range of $544.2M-$566.9M, below a $584.8M consensus.
- Hurting FQ4 sales: Telecom/data center chip revenue (39% of total revenue) fell 7% Q/Q and 26% Y/Y; Texas Instruments just cited telecom infrastructure weakness (particularly for mobile gear) as a reason for its Q1 sales miss and soft Q2 guidance. Industrial, aerospace, & defense revenue (42% of total) fell 7% Q/Q (seasonality) but rose 13% Y/Y. Broadcast, consumer, & automotive (17% of total) rose 12% Q/Q and 6% Y/Y.
- Helping EPS beat estimates: Gross margin was 69.9%, up 230 bps Y/Y and above guidance of 68%-69%. FQ1 GM guidance is at 69%-70%. Also boosting EPS: $175M was spent on buybacks, even with FQ3.
- Xilinx has fallen to $42.89 AH. Archrival Altera (NASDAQ:ALTR), which reportedly rejected a $54/share Intel buyout offer, has dropped to $42.25 ahead of tomorrow's Q1 report. Piper downgraded Altera to Neutral earlier today, citing valuation.
- Xilinx's FQ4 results, PR
Wed, Apr. 22, 5:35 PM
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Wed, Apr. 15, 2:19 PM
- Chip stocks are turning in a good day as Intel's Q1 report - it featured a revenue miss, in-line EPS, light Q2 guidance, solid margin and server CPU figures, and a capex budget cut - goes over well with a market that had low expectations following a March warning.
- Also: Analog/mixed-signal chipmaker Linear Technology is higher after beating FQ3 estimates, offering slightly soft guidance, and reporting healthy bookings
- After selling off in late March amid concerns about TSMC remarks and forex pressures, the Philadelphia Semi Index (SOXX +1.7%) is again within $4 of a high of $99.57. The Nasdaq is up 0.8%.
- Linear peers Texas Instruments (TXN +3.2%), Analog Devices (ADI +2.3%), Fairchild (FCS +3.4%), MagnaChip (MX +3.9%), Power Integrations (POWI +3.7%), InPhi (IPHI +4.2%), and ON Semi (ONNN +4%) are among today's standouts.
- Other gainers include Cree (CREE +3.9%), Audience (ADNC +8.5%), QuickLogic (QUIK +5.2%), Cavium (CAVM +3.1%), and reported Intel buyout target Altera (ALTR +2.4%). Audience (believed to supply a voice processor for the Galaxy S6) could be getting a lift from Samsung remarks about stronger-than-expected Galaxy S6 sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mon, Apr. 13, 5:00 PM
- In what might be one of the most predictable acts of shareholder activism in recent memory, many large Altera (NASDAQ:ALTR) investors have sent letters to the company urging it to resume buyout talks with Intel (NASDAQ:INTC), sources tell Bloomberg. Cadian Capital (2.8% Altera stake) and TIG Advisors (1.5% stake) are said to be among the disgruntled parties.
- The letters followed reports Altera had rejected an Intel buyout offer in the low-to-mid $50s (Bloomberg reported $54/share). Altera closed at $34.58 the day before Intel buyout reports first broke, and at $43.86 today. They briefly tumbled on reports of Altera's rejection, but soon erased their losses as investors bet a deal would eventually occur.
- Altera +1.8% AH to $44.65. Intel's Q1 report arrives tomorrow afternoon; Altera's arrives on April 23.
Thu, Apr. 9, 11:32 AM
- After initially seeing double-digit losses in response to a CNBC report (later backed up by Bloomberg) stating Intel (NASDAQ:INTC) has broken off buyout talks due to price disagreements, Altera (ALTR +0.1%) is now near breakeven.
- With the FPGA vendor's shares still 22% below the $54/share offer price reported by Bloomberg, investors/traders are betting a deal will eventually happen.
- Altera is currently up 21% from where it traded before the WSJ reported of deal talks on March 27. Q1 results arrive on April 23.
Thu, Apr. 9, 9:11 AM
Thu, Apr. 9, 9:11 AM
- CNBC's David Faber reports Intel (NASDAQ:INTC) has ended talks to buy Altera (NASDAQ:ALTR) due to a failure to agree on price.
- Intel reportedly made an all-cash offer in the "low $50s" (sharply above Altera's Wednesday close of $42.00), and was rejected. Talks are said to have been going on for months.
- Intel -2.3% premarket to $30.60. Altera -10.6% to $37.65. Altera archrival Xilinx (NASDAQ:XLNX) -1.9% to $41.75.
- Previously: Intel reportedly in talks to buy Altera; shares soar
- Previously: Intel/Altera seen yielding many synergies, sparking more M&A
- Update: Bloomberg reports Intel offered ~$54/share.
- Update 2 (11:35AM ET): Altera has erased its losses, and Intel has mostly done the same. Xilinx is up slightly.
ALTR vs. ETF Alternatives
Altera Corpdesigns and sells programmable logic devices, HardCopy application-specific integrated circuit devices, power system-on-chip devices, pre-defined design building blocks known as intellectual property cores, and associated development tools.
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