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
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
Jul. 21, 2014, 5:30 PM
Jun. 24, 2014, 6:29 PM
- Nvidia's (NVDA) Project Denver (involves CPUs based on custom ARM cores) is only aimed at the mobile market for now, though the chipmaker is keeping its server options open, says a spokesman.
- Nvidia announced its first Denver CPU - a dual-core mobile chip expected in 2H14 - under the Tegra K1 moniker in January. CEO Jen-Hsun Huang has previously said Nvidia is "seeing a lot of interest in putting something like Tegra in micro servers." This week, Nvidia showed off a solution that pairs its Tesla HPC GPUs with 3rd-party ARM (ARMH) server CPUs.
- Meanwhile, a source tells the WSJ Samsung has decided to drop its ARM server CPU efforts. The company was previously reported to be working on ARM server parts with the help of AMD-poached talent.
- AppliedMicro (AMCC) and Cavium (CAVM) must be pleased. Each has bet big on the budding ARM server CPU market, hoping to tap into growing interest in using them in microservers, application-specific hardware (e.g. networking or security gear), and hyperscale data centers. AMD, Marvell, and TI have also announced or launched parts.
- The WSJ also reports Qualcomm (QCOM) is "working on [ARM] server chips," though no announcements have been made yet.
- CEO Steve Mollenkopf hinted at CES Qualcomm, which has a huge R&D budget at its disposal, could go after the market. "I think there's going to be a tremendous amount of growth in computing and resources dedicated to supporting the cloud ... We look at that as an opportunity."
Jun. 17, 2014, 6:58 PM
- The consolidation wave that has hit the semi industry could soon yield tax inversion deals for foreign firms similar to deals seen in the healthcare industry, says FBR's Christopher Rolland.
- Inversion deals allow U.S. companies buying foreign firms to see lower tax rates if less than 80% of the equity in the new company is owned by legacy U.S. shareholders, and the post-merger company has substantial foreign ops.
- Rolland thinks ARM (ARMH), NXP (NXPI), Mellanox (MLNX), and Taiwan's MediaTek could be among the foreign companies targeted by U.S. chipmakers. Worth noting: Mellanox sells more than just chips, and ARM's business model depends on the company maintaining a neutral status within the industry.
- Meanwhile, Nomura's Romit Shah names 15 potential M&A candidates, and divides them into 3 groups: "Sub-scale companies" with high margins and strong IP; "strategic companies" with compelling product lines; and "undervalued companies."
- Shah's "sub-scale companies:" IDTI, ISIL, MTSI, MCRL, SMTC, SLAB.
- "Strategic companies:" ALTR, AMCC, ATML, CAVM, MPWR, BRCM ($22.5B market cap could make it tough to digest).
- "Undervalued companies:" DIOD, IRF, MSCC.
Jun. 10, 2014, 12:02 PM
- Canaccord's Matthew Ramsay has launched coverage of AppliedMicro (AMCC) with a Buy and $16 PT, and on fellow ARM (ARMH) server CPU play Cavium (CAVM) with a Buy and $62 PT.
- Ramsay sees ARM designs grabbing 20% of a 2018 server CPU market he expects will be worth $19B (up from a current $12B).
- Though software support and the dominance of Intel's x86 CPUs act as challenges, there's plenty of optimism about the ability of ARM designs to address demand for low-power CPUs for hyperscale deployments, as well as to cater to application-specific niches better than general-purpose Intel CPUs.
- Cavium is going after the latter opportunity with its Project Thunder CPUs - Ramsay expects strong sales growth starting in 2H15. In the near-term, he expects a 50% 2013 increase in Cavium's core network processor design wins to drive 20%+ revenue growth.
- As for AppliedMicro, he sees the early lead for the company's X-Gene ARM CPUs - parts have been sampling for nearly a year, and plenty of software testing has been done - allowing AppliedMicro to hit its target of doubling quarterly sales by the end of 2016.
- Cavium recently unveiled ThunderX, a next-gen solution supporting up to 48 home-grown ARM cores (requires a costly architectural license) - chips meant specifically for networking, storage, and security hardware will be offered. AppliedMicro is prepping next-gen X-Gene CPUs supporting up to 16 cores.
May 29, 2014, 6:57 PM
- ARM (ARMH) is acquiring Duolog Technologies, developer of a software platform (Socrates) meant to help SoC designers to configure and integrate chip IP Terms are undisclosed.
- ARM, whose CPU and GPU cores are used in plenty of advanced SoCs (especially in mobile), cites an interest in helping licensees deal with "increasing SoC integration complexity" as a reason for making the deal.
- Prior acquisitions: Sensinode, Geomerics, display controller IP,
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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