Dec. 3, 2014, 1:48 PM
- The Philadelphia Semi Index (SOXX +1.7%) is making fresh highs after Microchip (MCHP +4.1%) slightly upped its calendar Q4 guidance, and stated it continues to "see an improvement in our bookings and billings since our earnings call on October 30, 2014."
- Chip stocks had also jumped following that earnings call, during which Microchip said it believed the inventory correction that triggered an Oct. 9 warning (and a major chip stock selloff) was mostly over. While a slew of chipmakers provided soft Q4 guidance after Microchip's warning, fears of a major correction didn't pan out.
- The group outperformed a bit yesterday after Cypress (CY +2.9%) announced it's merging with Spansion (CODE +2.5%), continuing the chip industry's consolidation wave. Several firms have upgraded Cypress and/or Spansion in response, praising the deal's cost synergies.
- Notable gainers include not only chipmakers, but also chip equipment, test/assembly, and IP licensing firms: ARMH +3.8%. AMBA +3%. MX +9%. MXIM +4.2%. AMCC +3.5%. ADI +3.1%. SIMG +3.7%. AMKR +4.2%. SPIL +3.3%. SYNA +2.7%. ATML +3.7%. ENTR +3.8%. AMAT +2.7%. KLAC +2.5%.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Last week: Chip stocks rally after ADI's earnings
Nov. 19, 2014, 2:32 PM
- After previously hinting it would do so, Qualcomm (QCOM -2%) has confirmed it plans to enter the budding ARM server CPU market. The company estimates the opportunity will be worth $15B by 2020, thanks in part to strong demand from Internet giants.
- AMD, Marvell, Texas Instruments, Cavium (CAVM -1.7%), and AppliedMicro (AMCC -4.1%) have already unveiled ARM server CPUs. CEO Steve Mollenkopf argues Qualcomm's ability to quickly adopt next-gen manufacturing processes will give it an edge. For now, Intel, which maintains a process lead over the foundries relied upon by ARM vendors, still controls the lion's share of the server CPU market.
- Qualcomm has also used its analyst day to unveil the Gobi 9x45, its 5th-gen LTE baseband modem. With the help of carrier aggregation, the 9x45 (due in 2015) supports max speeds of 450Mbps; the prior-gen 9x35 tops out at 300Mbps.
- The 9x45 is also said to deliver improved power consumption, and require less board space. A new version of Qualcomm's complementary envelope-tracking IC (lowers power draw) has been announced as well.
- Qualcomm still dominates the LTE baseband market, and is generally viewed as maintaining an edge in performance and frequency band support. But competition has picked up in recent quarters, thanks to new baseband launches from Intel, Samsung, and Nvidia.
- Earlier: Qualcomm lower after setting long-term targets
Nov. 13, 2014, 3:28 PM
- Though Cisco is higher after beating FQ1 estimates and issuing soft FQ2 guidance, many telecom equipment and component/chip names are going in the opposite direction.
- At issue: Cisco reported a 10% Y/Y drop in service provider orders (-18% in the U.S.), while stating on its CC (transcript) it "saw dramatically reduced spend at several large U.S. service providers." The networking giant also suggested demand will remain weak during the next couple of quarters.
- The remarks came just a few days after AT&T set a 2015 capex budget of $18B (down from 2014's $21B), prompting a Monday selloff in equipment vendors and their suppliers.
- Today's decliners: ALU -3.8%. CIEN -2.8%. JDSU -3.1%. FNSR -3.7%. JNPR -1.7%. INFN -3.8%. RKUS -3.4%. ZHNE -3.2%. AMCC -4.1%. CALX -2.7%. CYNI -1.8%. ADTN -3.5%. ALLT -2.4%. FN -1.9%.
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 29, 2014, 12:45 PM
Oct. 29, 2014, 11:43 AM
- Applied Micro (NASDAQ:AMCC) guided on its FQ2 CC (transcript) for FQ3 revenue of $34M-$38M and EPS of -$0.06 to -$0.10, well below a consensus of $45.5M and -$0.01. FQ2 book-to-bill was nonetheless 1.2, due to orders for both FQ3 and FQ4.
- While sales of AMCC's X-Gene ARM server CPUs (closely watched) met expectations in FQ2, the company is "experiencing headwinds" in its core telecom/networking chip ops; plenty of peers and customers have been hurt by weak telecom capex (especially within North America).
- A "secular migration" away from PowerPC network processors is also taking a toll. AMCC plans to "make appropriate adjustments to move [its] base business towards breakeven until X-Gene revenue breaks out."
- AMCC plans to ship at least 10K X-Gene CPUs in FY15 (ends March '15), and says it has also "secured a number of flagship tier-1 design wins" for its newer HeliX ARM CPUs (meant for embedded/networking products). H-P (via its Moonshot servers) is among AMCC's X-Gene clients.
Oct. 29, 2014, 9:15 AM
Oct. 28, 2014, 5:48 PM
Oct. 28, 2014, 4:09 PM| 1 Comment
Oct. 27, 2014, 5:35 PM
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Oct. 27, 2014, 10:29 AM
- Bloomberg reports Microsoft (MSFT -0.7%) has a test version of Windows Server that runs on ARM (ARMH -0.9%) server CPUs. Currently, Windows Server only runs on x86 CPUs, primarily from Intel (INTC -0.7%).
- Windows Server support would provide a major boost to the fledgling ARM server CPU ecosystem; software support has remained a question mark for it even as the likes of Dell, H-P, and Facebook gave their backing. OS support would still need to be followed by app support.
- AMD (AMD +0.4%), Cavium (CAVM -1.3%), AppliedMicro (AMCC -1.8%), and Marvell (MRVL -0.6%) have each unveiled ARM server CPUs, while often promising better power efficiency than Intel's offerings. Supporters have also noted the potential for ARM-based parts to be optimized for specific tasks (security, storage, networking, etc.); Cavium is among the leaders here.
- Intel, for its part, is countering with both low-power Atom server CPUs, and more power-efficient versions of its mainstay Xeon server CPUs (such as the just-launched Grantley). IDC estimates x86 servers (largely running on Windows Server of Linux) accounted for 78% of Q2 server industry revenue.
- Providing ARM support for Windows Server would fit with Satya Nadella's strong interest in broadening the device/platform reach of Microsoft's software and services.
Oct. 15, 2014, 4:07 PM
- In an encouraging sign for beaten-down telecom equipment and chip/component stocks, Adtran (ADTN +5.7%) managed to rally even though it guided on its Q3 CC (transcript) for a low-to-mid teens Q/Q revenue drop. Consensus (doesn't appear to have fully accounted for Adtran's Q3 warning) was for revenue to drop 2% to $154.9M in Q4.
- Adtran attributed much of its Q3 weakness to "a decline in Europe as a large project there had a seasonal slowdown." Enterprise softness also took a toll.
- The company "[expects] to see an upturn in this business" in 2015, but European sales are expected to remain soft in Q4. Other equipment vendors, such as Juniper (JNPR +2%) and Ciena (CIEN +2.7%), have provided weak guidance blamed on U.S. wireline capex; AT&T is generally seen as a big culprit.
- In addition to Juniper and Ciena, many other industry names have closed with healthy gains. PKT +6.3%. INFN +3.4%. ZHNE +6.7%. ALLT +5.2%. AFOP +4.5%. AMCC +12.5%. CYNI +4%. CALX +3.3%. FNSR +3.1%. UBNT +4.2%. OPLK +3.4%. RKUS +3.3%.
Oct. 10, 2014, 10:58 AM
- Telecom equipment makers and their chip/component suppliers are seeing more pain after Juniper (JNPR -7.5%) and Procera (PKT -32%) issued Q3 warnings (I, II), the latest bad earnings news for an industry that has seen plenty due to soft wireline capex. A few enterprise-focused networking vendors are also having a rough day.
- Cisco (CSCO -3.1%) has fallen below $23.50, and Alcatel-Lucent (ALU -4.3%) below $2.50. Other decliners: CIEN -4.7%. JDSU -4.6%. FFIV -5.3%. ANET -7%. RKUS -5.7%. SONS -4.4%. INFN -2.4%. CYNI -3.5%. AMCC -10%. PMCS -3.4%. NPTN -7.7%.
- Analysts are defending Juniper, arguing (in remarks that also have implications for peers) bad news has been priced in and that telecom capex is likely to improve in 2015. Bulls have argued Web/mobile traffic growth and SDN/NFV investments will ultimately boost capex, in spite of industry service revenue pressures.
- The Nasdaq as a whole is down 1.2%. Chip stocks are off sharply following Microchip's warning and prediction of an industry correction.
- Yesterday: Telecom equipment stocks slump as capex worries persist
Aug. 12, 2014, 9:51 AM
- Citing near-term business weakness and a belief expectations for its X-Gene ARM server CPUs are too high, FBR has downgraded AppliedMicro (AMCC -3.8%) to Market Perform, and lowered its target by $1 to $10.
- Shares are near their 52-week low of $8.11. They plunged last month after AMCC missed Q2 revenue estimates and forecast Q3 revenue of $42M-$46M (down from $55.4M a year ago).
Jul. 29, 2014, 4:18 PM| 1 Comment
Jul. 28, 2014, 5:35 PM
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Applied Micro Circuits Corp is engaged in providing silicon solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long haul communications equipment.
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