Dec. 2, 2014, 12:33 PM
- Atmel (ATML +2%) and Synaptics (SYNA +2.8%) are seeing healthy gains after touch controller rival Cypress announced it's merging with NOR flash vendor Spansion, the latest in a series of big M&A deals to hit the semi industry. Cypress and Spansion have both soared.
- Atmel also squares off against Cypress in other microcontroller markets. Synaptics, which has been gaining touch controller share, recently closed a $465M deal to buy LCD driver IC vendor Renesas SP Drivers.
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, 6:34 PM| Comment!
Oct. 29, 2014, 4:07 PM
Oct. 28, 2014, 5:35 PM
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Oct. 9, 2014, 5:44 PM
- Several microcontroller and analog/mixed-signal IC vendors are lower AH after Microchip warned of weak calendar Q3 sales. TXN -2.2%. ADI -2.2%. LLTC -2.5%. ATML -1.6%. ONNN -1.4%.
- Notably, the microcontroller maker said it believes "another [chip] industry correction has begun and that this correction will be seen more broadly across the industry in the near future."
- Microchip's diversified customer base and recognition of distributor revenue based on sell-through rather than sell-in (unlike many peers) lead it to be seen as a canary in the coal mine for the industry.
Sep. 2, 2014, 10:18 AM
- "The Street's average price target is around $100 ... I think there's potential for more, depending on how fast the adoption of fingerprint technology goes," analyst Steve Jue is quoted as saying in a bullish weekend Barron's column on Synaptics (SYNA +5.2%).
- The paper observes sales of Synaptics' fingerprint sensor modules (obtained through the Validity Sensors acquisition) have grown much faster than expected with the help of a Galaxy S5 design win, and now make up 22% of revenue (the Renesas SP deal could lead that figure to drop some).
- With Android OEMs hungry to counter Apple's integration of a proprietary fingerprint sensor module within iDevices, Synaptics expects industry fingerprint sensor sales soaring to 530M in 2016 from a mere 30M in 2013.
- Barron's also observes Synaptics respectively has 40% and 65% of the touch controller and notebook touchpad markets, and notes shares (going into today, anyway) trade for only 13x forward EPS (exc. cash).
- Shares now +67% YTD. Touch controller rival Atmel (ATML +1.2%) is also higher.
Aug. 7, 2014, 11:29 AM
- Atmel (NASDAQ:ATML) guided on its Q2 CC (transcript) for Q3 revenue of $364M-$382M, unfavorable at the midpoint to a $379M consensus. Recently-acquired Newport Media is expected to contribute $7M.
- When asked about Atmel's guidance, CEO Steven Laub noted touch controller sales are expected to be down by a low-to-mid single-digit % Q/Q - he blames tablet weakness and "customer transitions" in Asia (likely a reference to Samsung's challenges).
- Atmel has also been facing tough touch controller competition from Synaptics.
- Other segments are faring better: Microcontroller and automotive sales are forecast to rise by a low-to-mid single-digit %, memory by double digits, and multi-market/other sales high single-digits.
- Q2 gross margin was 45.3%, up from 44% in Q1 and 42.6% a year ago. Q3 GM is forecast to be at 47% (+/- 100 bps), and Q4 GM around 49%. 3.6M shares were repurchased in Q2 at an average price of $8.
- Q2 results, PR
Aug. 7, 2014, 9:21 AM
Aug. 6, 2014, 4:07 PM
Aug. 5, 2014, 5:35 PM
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Aug. 1, 2014, 6:55 PM
- In addition to beating FQ1 estimates, Microchip (MCHP +2.3%) guided for FQ2 revenue of $560M-$575.9M and EPS of $0.70-$0.74, largely above a consensus of $547.6M and $0.71.
- Microchip, often viewed as a bellwether for the chip industry, says it's "seeing a seasonally normal business environment with strengths in many of our end markets like industrial, automotive, housing, consumer electronics and personal computing."
- Microcontroller revenue rose 5.3% Q/Q and 14.5% Y/Y, with all 3 of the company's microcontroller lines - 8-bit, 16-bit, and 32-bit - posting Q/Q growth. Analog revenue (not counting the Supertex deal) rose 2.6% Q/Q and 6.8% Y/Y. Counting Supertex, analog was 24% of total revenue.
- Gross margin +50 bps Q/Q and +180 bps Y/Y to 59.8%. Microchip expects an FQ2 GM of 59.2%-59.6%.
- Microcontroller rival Atmel (ATML +2.3%) has followed Microchip higher. Atmel's Q2 report is due on Aug. 6.
- FQ1 results, PR
Jul. 23, 2014, 12:25 PM
- Among the year's best tech performers, chip stocks are selling off (SOXX -1.8%) on an up day for the Nasdaq following weak numbers from FPGA giant Xilinx (XLNX -14.5%).
- Xilinx missed FQ1 revenue estimates by over $18M, and also guided for FQ2 revenue to be well below consensus. The company blamed the FQ1 shortfall on soft defense and wireless sales. BMO and BofA/Merrill have downgraded Xilinx; the former thinks Xilinx's 28nm share might be peaking.
- Xilinx stated on its CC (transcript) the wireless weakness was mostly due to soft 28nm chip sales to Chinese 4G base station vendors; Chinese 4G rollouts have long been viewed as a catalyst for both Xilinx and Altera (ALTR -4.7%). Aerospace/defense sales were hurt by program timing issues.
- Meanwhile, switch/router vendor Juniper offered light Q3 guidance to go with a Q2 beat. The company noted on its CC (transcript) "market dynamics" for U.S. carriers, including M&A activity, are affecting project rollouts.
- Also: Analog/mixed-signal IC vendor Linear (LLTC -4.1%) is selling off in spite of beating FQ4 estimates and guiding in-line (8%-11% Y/Y FQ1 rev. growth vs. 9.1% consensus).
- Notable decliners: FSL -5.3%. IDTI -6.4%. EZCH -3.3%. PMCS -4.3%. LSCC -6.8%. CAVM -4.7%. SMTC -4.1%. ATML -3.2%. TQNT -3.1%. RFMD -2.9%. IRF -2.9%.
- Qualcomm, NXP, TriQuint, and Cirrus Logic report after the bell.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Jul. 8, 2014, 4:40 AM
- Samsung (SSNLF), Intel (INTC) and Dell have teamed up to create a standard by which household gadgets communicate with each other, called the Open Interconnect Consortium. The partnership also includes chipmakers Broadcom (BRCM) and Atmel (ATML).
- The new consortium will rival the AllSeen Alliance, a similar framework supported by Qualcomm (QCOM), LG (LGEIY), Microsoft (MSFT) and other companies.
Jul. 7, 2014, 10:41 AM
- Atmel (ATML -1.1%) is acquiring Newport Media, a maker of TV broadcast and Wi-Fi/Bluetooth chips, for $140M in cash + up to $30M in performance earn-outs over the next 2 years.
- With NMI having posted 2013 sales of $43M, Atmel is paying 3.3x-4x trailing sales. The deal will be financed with a mixture of cash on hand and credit facility borrowings, and is expected to become accretive in 2H15.
- Atmel declares Newport's low-power Wi-Fi and Bluetooth ICs complement Atmel's microcontrollers, and suggests they're well-suited for embedded/wearables applications (i.e. the proverbial Internet of Things) requiring small form factors and low power draw.
- Broadcom, CSR, and Qualcomm's Atheros unit are among the key players in the Wi-Fi/Bluetooth IC market. Microchip recently bought Taiwanese Bluetooth chipmaker ISSC; Apple bought low-power Bluetooth chipmaker Passif Semi last year.
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.
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