Thu, Jan. 22, 2:54 PM
- Amazon (AMZN +4.3%) has acquired Annapurna Labs, an Israeli chipmaker that has provided few details about the silicon it's working on. The NYT reports the purchase price is $350M. The WSJ previously reported of a $350M deal price, while adding the final tab could be $375M if certain conditions are met.
- According to the WSJ's sources, Annapurna is developing "midrange networking chips for data centers, offering improvements over existing products in terms of information-transmission rates and power consumption." Israel's Calcalist reports the company is developing "microprocessors that allow fast data traffic for low-power computing servers and storage servers." It also notes CPU core giant ARM (NASDAQ:ARMH) is an investor.
- AWS' data centers contain hundreds of thousands of servers running Intel (NASDAQ:INTC) x86 CPUs. Though Amazon has downplayed the efforts of 3rd-party ARM server CPU vendors, it has also hired several key engineers from defunct ARM CPU vendor Calxeda, a move that has fueled speculation Amazon is prepping its own ARM server chips. Annapurna could assist with the effort.
- The news comes on a day in which Piper has assigned AWS a ~$32B valuation.
- Earlier: Amazon rallies following eBay's earnings
Wed, Jan. 21, 12:12 PM
- Citi's Amit Harchandani has upgraded ARM (ARMH +1.9%) ahead of its Feb. 11 Q4 report, and upped his target by £3.50 to £12 (shares currently go for £10.43 in London).
- Harchandani thinks ARM's CPU cores will maintain a 75%+ tablet share and a 90%+ smartphone share in the face of Intel's efforts to gain ground, and forecasts a ~33% free cash flow CAGR from 2014-2017. He also sees room for ARM to "optimize the balance sheet and enhance capital allocation."
- ARM, long afforded steep multiples on account of its near-monopoly position in the CPU core IP space, currently trades for 33x 2015E EPS. The 2015 revenue growth consensus is at 16.9%.
Tue, Jan. 6, 1:36 PM
- Up 30% in 2014, the Philadelphia Semi Index (SOXX -2.2%) has fallen over 4% thus far in 2015. Today's decline comes as the Nasdaq drops 1.6%.
- Many names are posting 3%+ losses. SWKS -4.2%. QRVO -5.8%. AMAT -3.4%. KLAC -3.1%. SYNA -5.4%. IPHI -9%. ARMH -5.4%. SIMO -4.5%. MCRL -3.9%. AMCC -3.9%. CODE -5.1%. CY -4.6%. QUIK -7.9%.
- This morning, Gartner estimated global chip sales rose 7.9% in 2014 to $339.8B, a little less than the 9.4% recently estimated by IHS. Sell-side firms have forecast industry growth will fall to the ~5% range in 2015.
- Gartner thinks memory sales rose 16.9%, fueled by a 31.7% increase in DRAM sales. All other chip markets rose by 5.4%, a marked improvement from 2013's 0.8%. Intel (15% share) and Samsung (10.4%) claimed over a quarter of industry sales between them. Qualcomm (5.6%), Micron (4.9%), and SK Hynix (4.7%) rounded out the top-5.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Dec. 30, 2014, 6:05 PM
- French carrier Iliad's (OTC:ILIAF) Online.net unit plans to launch a cloud infrastructure service next month that runs on servers featuring ARM-based (NASDAQ:ARMH) CPUs supplied by Marvell (NASDAQ:MRVL). Making good on ARM's promise of high densities, 18 servers - each sporting one quad-core CPU - can fit onto a blade, and 16 blades can fit within a chassis.
- Though it's no Google or Amazon, Iliad provides a useful reference win for ARM server CPU vendors as they try to take share from Intel (NASDAQ:INTC), whose Xeon CPUs claim the lion's share of the server market, including most Web/cloud data center deployments.
- Canaccord has forecast ARM server CPUs, still in their infancy, will grab a 20% share by 2018. Hyperscale data centers and application-specific server appliances are seen as areas where ARM-based solutions could stand out.
- Intel is looking to head off the ARM threat both by developing low-power Atom server CPUs, maintaining a manufacturing process edge, and (notably) providing a variety of custom CPUs to Internet giants such as Amazon, Google, Facebook, and eBay; the latest offerings are packaged with Altera (NASDAQ:ALTR) FPGAs to provide on-the-fly programmability.
- Nonetheless, Facebook's Open Compute Project supports both ARM and x86 CPUs, and Google has been reported to be thinking of building its own ARM chip. An Amazon VP recently stated ARM vendors aren't keeping pace with Intel. But Amazon might simply be opting to create its own ARM designs, given it has hired several key engineers from defunct ARM vendor Calxeda.
- Cavium (NASDAQ:CAVM) and AppliedMicro (NASDAQ:AMCC) are often viewed as ARM server CPU plays. AMD, Qualcomm, and Texas Instruments are also competing in this space.
Dec. 9, 2014, 6:14 PM
- The Intel IoT Platform (NASDAQ:INTC), launched today, aims to provide a "reference model" for Web-connected embedded devices (the proverbial Internet of Things), along with related software and services.
- The solution includes: 1) An updated version of the Intel IoT Gateway (launched last year), which provides Web connectivity and data sharing for embedded devices. The gateways will be offered by 20 ODMs by early 2015. 2) Management software from Intel's Wind River (embedded software) unit. 3) Security tools from McAfee. 4) An API and traffic management tools for developers (enabled by the Mashery acquisition).
- Intel is also partnering with Dell, Accenture, SAP, Wipro, and others to create solutions that "provide a repeatable foundation" for the IoT Platform that developers can build customer-specific solutions on top of.
- The chip giant's main goal, of course, is to drive CPU sales - partly for gateways, but primarily for the devices they interact with. Intel offers Atom CPUs for more powerful embedded devices, and Quark CPUs for smaller, low-power products.
- The Intel IoT Platform will face off against ARM's (NASDAQ:ARMH) mbed IoT platform (launched in October). ARM, whose CPU cores claim a large and growing share of the microcontroller market, has provided mbed with an OS, device server software, and developer tools. The solution is meant to run on ARM's low-power Cortex-M CPU cores.
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. 13, 2014, 6:36 AM
- Makers of chips that use ARM's (NASDAQ:ARMH) technology aren’t keeping up with Intel's (NASDAQ:INTC) pace of innovation, announced James Hamilton, vice president of Amazon Web Services. "It’s just not quite moving fast enough."
- As a result, Amazon (NASDAQ:AMZN) isn’t ready to start using alternatives to Intel’s chips in its servers.
- Data-center operators are also looking for more efficient components, not just cheaper ones, due to the price of powering and cooling warehouses. "Any time I work out the cost models, it’s not quite there," said Hamilton.
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. 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. 21, 2014, 9:14 AM
Oct. 21, 2014, 5:57 AM
- ARM Holding's (NASDAQ:ARMH) Q4 guidance is "underwhelming," SocGen says, given previous expectations of a strong H2.
- The drop in value per new license sold implies that most of ARM's larger deals have been completed, firm says.
- Any positive aura from Apple's iPhone strength is "more than offset" by ARM's weakness in the broader smartphone market.
- SocGen maintains Sell rating with implied 18% downside.
- Shares -3.7% in London.
Oct. 21, 2014, 5:48 AM| Comment!
Oct. 20, 2014, 5:30 PM
Sep. 30, 2014, 11:14 AM
- Bernstein has downgraded ARM (ARMH -1.7%) to Underperform. The firm thinks forward estimates are too optimistic.
- After entering the year trading at steep multiples, ARM has underperformed the Nasdaq by a large margin; shares now trade at 29x 2015E EPS. Investors have historically granted ARM a premium on account of its near-monopoly position in the CPU core IP space.
Sep. 24, 2014, 6:50 AM
- ARM (NASDAQ:ARMH) has unveiled its new Cortex-M7 processor design aimed at the growing wave of Internet-connected industrial and household devices.
- "The day the refrigerator talks to the milk carton, that's in a gimmicky category. But to have the dishwasher and refrigerator coordinate their cycles to reduce the electricity load - that becomes useful," says CEO Simon Segars.
- ARM is increasing its offerings for connected devices, as the electronics industry moves further into the "Internet of Things".
Jul. 22, 2014, 5:38 AM
- ARM (NASDAQ:ARMH) has announced a large increase in Q2 profit due to heavy growth from higher chip shipments and licensing revenue.
- Net income climbed to £55.5M ($94.8M) from £10.5 Y/Y.
- Revenue rose 9% to £187.1M ($319.6M). ARM's revenue often trails the market since half of its business comes from royalties. It earns the royalties and licensing fees from chip manufacturers on every chip shipped.
- The company raised its interim dividend 20% to 2.52 pence per share.
- ARMH +5.6% premarket
ARMH vs. ETF Alternatives
ARM Holdings PLC designs microprocessors, physical IP and related technology and software, and sells development tools to enhance the performance and energy-efficiency of high-volume embedded applications.
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