May. 29, 2014, 9:34 AM
- Seagate (STX) is expanding its flash storage lineup - generally seen as a weakness as flash encroaches on hard drives - in a big way by acquiring LSI's PCIe server flash storage module/flash controller chip unit from new LSI parent Avago (AVGO) for $450M in cash.
- Seagate, which already offers SSDs, notes the LSI unit is the #2 player in the PCIe flash market - Fusion-io (FIO +1%) is the largest - and that its offerings in the space are optimized for cloud/hyperscale deployments - Fusion-io also has a keen interest in this area. The unit's SandForce controllers have a number of SSD design wins.
- Seagate expects its enterprise SSD and controller ops to produce at least $150M in revenue in FY15 (ends June '15), albeit with an op. margin headwind of $30M-$40M. Better profitability is expected in FY16.
- The deal follows a string of flash storage acquisitions from archrival Western Digital: PCIe flash vendor Virident, SSD vendor sTec, and SSD caching software startup Velobit.
- It appears to remove one more potential suitor for Fusion-io, long the subject of M&A speculation.
May. 28, 2014, 5:35 PM
May. 15, 2014, 4:39 PM
- After cutting its Yahoo (YHOO) stake in half to 8M shares in Q4, Dan Loeb's Third Point LLC fully liquidated its position in Q1. (13F).
- Loeb, whose fund once owned 60M Yahoo shares, resigned from the company's board last July as part of a deal to sell back 40M shares to the company. His decision to exit Yahoo comes ahead of Alibaba's much-anticipated IPO.
- Loeb also liquidated the 10M-share BlackBerry (BBRY) position he established in Q4. BBRY -1.6% AH.
- A 4M-share position in Activision (ATVI) and a 1M-share position in NXP (NXPI) were also unloaded. A 2M-share position was taken in Avago (AVGO), as was a 2.55M-share position in Citrix (CTXS) and a 1.6M-share position in Brazilian carrier TIM Participacoes (TSU).
May. 5, 2014, 6:45 PM
Apr. 28, 2014, 11:09 AM
- Skyworks (SWKS - unchanged) and Panasonic (PCRFY) are forming a JV to develop SAW filters for mobile devices and other products.
- Skyworks will pay $148.5M in cash for a 66% stake in the JV, which will be have 590 employees and facilities in Japan and Singapore. The deal is expected to close by the end of calendar Q3, and be immediately accretive to margins and EPS.
- Rival Avago (AVGO -1.4%) is trading lower. Avago has differentiated its RF modules (particularly for 4G designs) partly through the use of FBAR filters (a type of BAW filter) offering better performance than SAW alternatives
- Morgan Stanley estimated last fall Avago has a ~70% share of the premium filter market, and predicted the market will grow to $1.75B in 2015 from slightly over $800M in 2013. TriQuint (TQNT -0.2%), about to merge with RF Micro (RFMD +0.8%), was estimated to have the remaining 30%.
- Skyworks asserts the JV is complementary to its ongoing BAW filter investments, and that Panasonic is the leader in the growing market for high-performance TC SAW filters - typically more expensive than traditional SAW filters, but cheaper than BAW filters. The company predicts the deal will allow it to "develop customized solutions for any band configuration where filter technology is applicable."
Apr. 22, 2014, 4:46 PM
- In addition to beating FQ2 estimates, Skyworks (SWKS) is guiding for FQ3 revenue of $535M and EPS of $0.73, well above a consensus of $488.2M and $0.63.
- Gross margin rose 250 bps Y/Y to 44.7%. While revenue rose 13% Y/Y, opex only grew 2% to $109.8M. 2M shares were repurchased.
- Rival RF Micro (RFMD) is up in sympathy ahead of its April 29 FQ4 report. Others that might get a lift: TQNT, AVGO, ANAD.
- FQ2 results, PR
Apr. 22, 2014, 2:28 PM
- The ITC has issued a final ruling clearing Mellanox's (MLNX +4.2%) optical cables and VCSEL laser drivers of infringing an Avago (AVGO +2.8%) laser driver patents. An administrative law judge (ALJ) had ruled in Mellanox's favor in January.
- At the same time, the ITC has upheld an ALJ ruling declaring Mellanox infringes another Avago VCSEL-related patent, and has issued cease-and-desist orders related to covered products (supplied to Mellanox by third parties).
- Mellanox insists the latter ruling won't affect its ability to supply optical cables, or otherwise affect its product line.
- Mellanox and Avago are both rallying on a good day for tech stocks. Mellanox's Q1 report is due on Thursday.
Apr. 7, 2014, 9:35 AM
- Analog Devices (ADI +0.8%) has been upgraded to Neutral by Goldman. The firm cut ADI to Sell on Jan. 2, when shares were moderately lower.
- Avago (AVGO -1.1%) has been pulled from Goldman's Conviction Buy list, but remains rated a Buy.
- FireEye (FEYE +1.9%) has been started at Outperform by FBN.
- Calix (CALX +2.3%) has been started at Buy by Craig-Hallum.
- Inphi (IPHI +2.7%) has been started at Buy by CRT Capital.
- Align Technology (ALGN +1%) has been upgraded to Outperform by Barrington Research.
Apr. 2, 2014, 7:06 PM
- A Chipworks teardown of Samsung's Galaxy S5 has turned up six Qualcomm (QCOM) chips: Two power management ICs, two RF transceivers, an audio codec IC, and the previously-disclosed Snapdragon 801 baseband/app processor.
- One of the power management ICs is part of Qualcomm's much-hyped RF front end, and improves 4G battery life via envelope tracking. Google/LG's Nexus 5 also contains the chip.
- Three Avago (AVGO) RF components are also inside the S5, including a 2G/3G/4G module. It's worth noting a phone's RF circuitry can vary depending on the particular market it's being sold into.
- Other components include an Audience (ADNC) voice processor, a Lattice Semi (LSCC) FPGA, an RF Micro (RFMD) antenna control chip (the company has strong Galaxy S4 exposure), and a Silicon Image (SIMG) MHL video transmitter IC.
- A previous teardown from a Russian site revealed components from Maxim, Synaptics, NXP, InvenSense, and Skyworks (SWKS). Aside from the Skyworks components (apparently swapped out for Avago parts in Chipworks' S5 model), the Chipworks teardown largely turns up the same parts.
- Earlier: Snapdragon 600 inside Amazon's Fire TV set-top
Mar. 28, 2014, 9:50 AM
- InvenSense (INVN +3%) has been upgraded to Buy by Roth.
- Ciena (CIEN -1.4%) and JDS Uniphase (JDSU -0.4%) have been cut to Sector Perform by RBC. MKM upgraded JDS a week ago.
- Veeco (VECO +4.6%) has been upgraded to Buy by CLSA. UBS upgraded shares earlier in March.
- Avago (AVGO +1.9%) has been started at Outperform by Pac Crest.
- Telecom Italia (TI +2.2%) has been upgraded to Buy by Berenberg.
- Integrated Silicon (ISSI +3.4%) has been started at Buy by B. Riley.
Mar. 17, 2014, 2:32 PM
- China Mobile's decision (officially announced on Friday) to require all 4G phones sold by the company as of May 31 to support five air interfaces should bolster Qualcomm's (QCOM +3.4%) 4G baseband chip sales and Chinese royalty collections, thinks Goldman's Simona Jankowski.
- Jankowski observes Qualcomm "has the most mature and broad portfolio" of 5-mode mobile SoCs, and that the company could have an easier time collecting royalties from Chinese OEMs on sales of phones supporting the globally-adopted 4G FDD-LTE and 3G W-CDMA standards. Qualcomm has had trouble collecting on sales of phones supporting China Mobile's 3G TD-SCDMA standard (but not W-CDMA).
- She also points out China Mobile is hoping to sell 100M 4G phones this year, after having launched commercial 4G services in late 2013. The Chinese government's antitrust probe remains an overhang, though as Jankowski notes, that's tied to royalty rates rather than Qualcomm's right to collect.
- Previous: Qualcomm could benefit from China Mobile 5-mode requirement
- Update: SA commenter Philip Marlowe notes RF component makers (RFMD, TQNT, SWKS, AVGO, ANAD) should also benefit from the policy change, as 5-mode phones require more RF circuitry than 3-mode phones.
Mar. 5, 2014, 5:21 PM
Feb. 26, 2014, 11:24 AM
- Chip stocks are outperforming (SOXX +1.1%) after Avago (AVGO +5.1%) posted an FQ1 beat and strong margin numbers (albeit while guiding light, as many expected), and STMicroelectronics (STM +3.9%) exec Paul Grimme states his company's European sales are stabilizing, with Germany leading the way.
- Notable winners: AMBA +5.4%. AMCC +5.2%. CRUS +3.3%. SWKS +3%. QUIK +4.1%. INVN +2.7%. RFMD +3.5%. TQNT +3%. SIMO +2.7%. CAVM +3.6%. Nearly all of the aforementioned names have strong mobile and/or telecom equipment exposure.
- RBC has hiked its Avago PT to $66 from $64, and says the chipmaker remains its "top play on China and global LTE deployments." With LSI in tow, the firm thinks FY15 (ends Oct. '15) EPS will top $5.
- Morgan Stanley ($68 PT) is confident Avago can raise LSI's op. margin to 30% from 17% over the next few years, much as the company has doubled its own op. margin to 30% post-LBO.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Feb. 25, 2014, 5:21 PM
- Avago (AVGO) expects FQ2 sales to be down 3%-6% Q/Q; that's worse than a consensus for a 2% drop. But with several other chipmakers with strong Apple exposure having already provided soft guidance (I, II), investors are taking the forecast in stride.
- FQ1 gross margin was 52%, +100 bps Q/Q and Y/Y, and above a guidance range of 49.5%-51.5%. FQ2 GM is expected to be in a range of 51.5%-53.5%.
- Wireless chip sales +13% Y/Y and 49% of revenue, wired industructure (boosted by CyOptics) +59% and 32% of revenue, industrial/other +6% and 19% of revenue.
- AVGO -0.5% AH. FQ1 results, PR.
Feb. 25, 2014, 4:08 PM| Comment!
Feb. 25, 2014, 12:10 AM
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