Oct. 14, 2014, 9:15 AM
Oct. 10, 2014, 9:59 AM
- Microchip's (MCHP -12.5%) calendar Q3 warning, which was accompanied by a declaration that it believes "another industry correction has begun and that this correction will be seen more broadly across the industry in the near future," is taking a heavy toll on chip stocks (SOXX -5.5%).
- Intel (INTC -4.2%) and many other chipmakers have joined the several firms that sold off AH yesterday in going in the same direction as Microchip: MU -5.8%. FSL -8.5%. BRCM -3.6%. SWKS -7.5%. RFMD -6.2%. XLNX -4.9%. MXIM -5%. AMBA -5.5%. IDTI -6.7%. CAVM -7.4%. AVGO -10.2%. SMTC -4.3%. SYNA -4.1%. POWI -6.9%.
- Chip equipment makers are also getting hit: AMAT -3.5%. KLAC -3.3%. LRCX -2.3%. UTEK -2.5%. KLIC -2%.
- As Microchip noted in yesterday's warning, the company's very diversified customer base, together with its recognition of distributor revenue on a customer sell-through basis rather than a distributor sell-in basis, often allow it to see industry changes before peers.
- The microcontroller vendor added its warning was driven by a September decline in sales to Chinese clients, and observed it has typically "returned to sequential revenue growth after two quarters" during past downturns.
- Chip stocks have had a good run over the last 12 months, aided by healthy mobile demand and the industry's consolidation wave.
Sep. 19, 2014, 9:36 AM
- iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
- In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), and envelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
- In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor - specifically, a 6-axis gyroscope/accelerometer - was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
- Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) can claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
- Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC. Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
- As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor, and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
- Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.
Sep. 4, 2014, 9:07 AM
Aug. 29, 2014, 11:03 AM
- Avago (AVGO +8.1%) has received a slew of target hikes after beating FQ3 estimates, reporting strong margins, and issuing healthy FQ4 guidance. RF component peers Skyworks (SWKS +1.6%), RF Micro (RFMD +4.5%), and TriQuint (TQNT +5.2%) are also higher.
- "We believe Street continues to under-appreciate this self-help story where mgmt has a proven record of cutting costs, paying down debt, and executing on multiple secular growth cycles," says BofA/Merrill. Its FY14 and FY15 EPS forecasts have respectively been raised by 20% and 25%.
- Credit Suisse: "Avago's leverage to structural growth drivers including content increases in the Industrials/autos end-mkts and accelerating demand for bandwidth, as well as, product cycles (4G/LTE wireless ramps at Apple and China) should allow the company to outperform peers." The diversification provided by the LSI deal is seen providing "further stability."
- Morgan Stanley expresses "high conviction in management's ability to execute on driving LSI's [operating margin] from 17% to 30% over the next few years," given Avago has doubled its op. margin to 30% since its 2005 LBO.
- On the CC (transcript), CEO Hock Tan mentioned wireless sales are expected to rise over 60% Q/Q thanks to "the ramp of a new phone model and a North American smartphone customer" (a clear iPhone 6 reference). Demand for FBAR filters and related products in 4G phones remains strong.
- Wired infrastructure is expected to grow at a low-single digit rate (switch/router ASIC growth offsetting flat optical component demand), and enterprise storage is expected to see mid-single digit growth excluding the PLX acquisition.
Aug. 29, 2014, 9:07 AM
Aug. 28, 2014, 5:00 PM
- Though Avago's (NASDAQ:AVGO) revenue from continuing ops of $1.29B was below consensus, the figure excludes sales from its flash storage product unit (to be sold to Seagate) and its Axxia network processor unit (to be sold to Intel). With flash/Axxia included, revenue was $1.39B, above a $1.35B consensus.
- FQ4 guidance, which excludes flash/Axxia but includes just-acquired PLX Technology, is for revenue from continuing ops to be up 18%-22% Q/Q. The consensus is at $1.42B.
- FQ3 gross margin for continuing ops was 57%, up from 54% in FQ2 and 51% a year ago. Opex was 23.9% of revenue vs. 21.2% a year ago. GM is expected to be at 56% (+/- 1%) in FQ4, and opex is expected to be flat Q/Q at $307M.
- Thanks to LSI's products, enterprise storage made up 32% of revenue. Wireless was 28%, wired infrastructure 27%, and industrial 13%. Strong 4G RF component demand helped wireless sales rise 26% Y/Y.
- FQ3 results, PR
Aug. 28, 2014, 4:05 PM| 3 Comments
Aug. 27, 2014, 5:35 PM
Aug. 13, 2014, 6:10 PM
- Intel (NASDAQ:INTC) is buying Avago's (NASDAQ:AVGO) Axxia network processor unit for $650M in cash. The deal is expected to close in Q4.
- The unit was obtained by Avago through the LSI merger. It had 2013 revenue of $113M, and employs 650 people.
- The acquisition broadens Intel's product line within a competitive network processor market that also features Broadcom, Marvell, Cavium, and Freescale, among others.
- The chip giant bought Ethernet switch processor startup Fulcrum Microsystems in 2011, and (thanks to the Fulcrum deal) counts data center switch vendor Arista Networks among its clients. The adoption of software-defined networking (SDN - shifts network intelligence to software-based controllers) is expected to boost demand for off-the-shelf silicon relative to proprietary ASICs.
- Notably, the Axxia line relies on ARM and IBM PowerPC CPU cores rather than x86 cores. However, the processors are often used in PCIe cards within servers running Intel x86 CPUs.
- Back in May, Avago agreed to sell LSI's flash product unit to Seagate for $450M.
Jul. 18, 2014, 2:51 PM
- "We believe Skyworks’ (SWKS +13.5%) diverse analog portfolio is enabling content share gains in its handset customer base," writes Canaccord after taking in the RF component giant's FQ3 beat and very strong FQ4 guidance.
- Canaccord thinks the FQ4 outlook is due to a mixture of strong iPhone 6 content share, growing sales of higher dollar-content integrated solutions to Chinese/emerging markets OEMs (gaining Android share), and "growing traction" for the company's non-phone analog IC business.
- 802.11ac Wi-Fi, mobile infrastructure, and embedded products (the proverbial "Internet of Things") are some of the non-mobile RF markets Canaccord sees Skyworks growing its sales to. Needham, for its part, also sees the smart grid, automotive, and medical markets providing a boost.
- On the CC (transcript), CEO David Aldrich declared broader mobile RF demand is benefiting from the need to support a larger number of spectrum bands - Avago (AVGO +4.3%) also benefits from this - as well as growing system complexity (driving a shift towards integrated solutions) and OEM efforts to improve signal performance.
- RF component peers Avago, RF Micro (RFMD +6.7%), TriQuint (TQNT +6.8%), and Resonant (RESN +7%) are outperforming amid a tech rally, as are several other mobile suppliers. INVN +3.9%. HIMX +2.9%. OLED +5.3%. CRUS +2.9%.
Jun. 25, 2014, 6:22 PM
- Black Sand Technologies, based out of Austin, was founded in '05 and has raised $28.2M in funding over its history.
- Notably, the product page on Black Sand's site only shows 3G amplifiers, and the most recent PR on its news page is from 2012. All signs suggest Qualcomm (QCOM) is buying the company to strengthen its power amplifier IP and/or engineering talent, as it encroaches on the turf of established vendors such as Skyworks (SWKS), TriQuint (TQNT), RF Micro (RFMD), and Avago (AVGO) with system-level solutions.
- Qualcomm, estimated to have 64% of the 2013 baseband processor market, made a dramatic entry into the amplifier market last year by announcing an RF front end solution (amplifiers included) that promised superior 3G/4G multi-band support and (via technologies such as envelope tracking) power efficiency. Skyworks, TriQuint, and RF Micro all tumbled following the announcement.
Jun. 23, 2014, 7:19 AM
Jun. 5, 2014, 9:21 AM
May. 29, 2014, 6:35 PM
- With newly-acquired LSI in tow, Avago (AVGO) expects FQ3 revenue of $1.3B-$1.4B. The consensus, which might not fully account for LSI, is at $1.24B.
- FQ2 gross margin was 54%, up from FQ1's 52% and the year-ago period's 51%, and above guidance of 51.5%-53.5%. Moreover, FQ3 GM is expected to be in a range of 54%-56%.
- Wireless chip sales (boosted by 4G component/FBAR filter demand) +25% Y/Y and 50% of revenue. Wired infrastructure (lifted by CyOptics) +43% and 31% of revenue. Industrial & Other +3% and 19% of revenue.
- Opex was 21% of revenue, down from 23% a year ago.
- Shares are making new 52-week highs AH, and are up 37% YTD.
- FQ2 results, PR
May. 29, 2014, 4:07 PM| Comment!
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