Nov. 19, 2014, 12:39 PM
Nov. 13, 2014, 8:47 AM
- "We expect product cycles in 2H15/16 to drive 5-10% upside to Street EPS," says Goldman's Mark Delaney, upgrading Broadcom (NASDAQ:BRCM) to Buy.
- Those product cycles include: 1) Strong expected sales of Broadcom's new 3.2Tbps Tomahawk switching chip, including for Web data center investments. 2) Growing sales of set-top ICs supporting HEVC encoding (to help enable 4K and HD Web video playback). 3) Connectivity (Wi-Fi/Bluetooth) chip growth in "connected devices, IoT, and access points" that can offset phone share loss.
- Delaney also thinks "there could be additional EPS upside from capital allocation," but expects it to be moderate, given much of Broadcom's cash is offshore.
- Shares are close to a 52-week high of $42.38. Delaney has also downgraded Broadcom rival Marvell to Sell this morning, while upgrading SanDisk to Buy.
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. 22, 2014, 11:02 AM
- Broadcom (NASDAQ:BRCM) is above $40 after soundly beating Q3 estimates and providing better-than-feared Q4 guidance. On its CC (transcript), the company noted its Q3 beat was fueled by 16% Q/Q growth for its broadband/wireless connectivity chip reporting segment (67% of revenue).
- Wireless connectivity sales almost certainly got a lift (given Apple's numbers) from strong iPhone-related orders. The iPhone 6/6 Plus feature a Broadcom combo chip containing an 802.11ac Wi-Fi radio; 802.11ac parts carry higher ASPs than chips sporting 802.11n Wi-Fi radios (such as the one in the iPhone 5S).
- Broadband connectivity sales benefited from strong HD set-top IC sales (aided by share gains) for emerging markets designs. That appears to be giving a lift to set-top vendor/Broadcom client Arris (NASDAQ:ARRS) ahead of its Oct. 29 Q3 report.
- The networking/infrastructure chip segment's sales were roughly flat Q/Q at $651M, in-line with expectations. Data center and carrier-related sales both fell - soft telecom capex has taken a toll on many firms - while enterprise and home product sales rose. "Some pickup" is expected in carrier-related sales next year.
- During the Q&A, CEO Scott McGregor hinted Broadcom could announce new capital return plans during its Dec. 9 analyst day, given it now has over $2.7B in U.S. cash. $277M was spent on buybacks in Q3.
Oct. 22, 2014, 9:19 AM| 1 Comment
Oct. 21, 2014, 4:32 PM| Comment!
Oct. 21, 2014, 4:12 PM
Oct. 20, 2014, 5:35 PM
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. 24, 2014, 6:46 PM
- Aimed at data centers shuffling huge amounts of traffic, Broadcom's (NASDAQ:BRCM) new StrataXGS Tomahawk chip delivers 3.2Tbps of Ethernet switching capacity - 32 100G ports, 64 40G/50G ports, or 128 25G ports. Dell, Juniper, Brocade, and Huawei are among the switch OEMs that furnished quotes for the PR.
- SDNCentral observes the Tomahawk isn't meant to replace Broadcom's flagship Trident II switching chip (can handle 100+ 10G ports), but instead aims for "an even higher-end market of hyperscale data centers and anything else requiring the highest port counts and lowest latency available."
- The chip also supports network visibility/analytics features that could make it well-suited for a budding software-defined networking (SDN) market. SDN is widely viewed as an opportunity for Broadcom, given deployments often rely on switches running off-the-shelf silicon rather than proprietary ASICs.
- Last week, Cavium's (NASDAQ:CAVM) newly-acquired Xpliant unit showed off a 3.2Tbps switching chip that supports a very high level of programmability (helpful for SDN). Broadcom's chip has begun sampling (mass-production could take some time), while Cavium's is expected to sample in Q4.
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. 11, 2014, 5:21 PM
- TiVo (NASDAQ:TIVO) jumped 7.3% today in its biggest gain in more than a year after Broadcom (NASDAQ:BRCM) announced a partnership to supply chips for TiVo's set-top boxes that could expand access to European cable operators.
- The new technology delivers 4x the resolution of a traditional 1080p60 HD screen, and displays life-like resolution speeds and richer color gradation.
- Two BRCM deals in two days - supplying new chips for TiVo’s set-top boxes which will support Ultra HD content, and supplying the same technology to the devices of Vodafone’s German business - may give TiVo access to Kabel Deutschland’s 8M subscribers, Brean Capital analyst Todd Mitchell says.
Sep. 5, 2014, 11:37 AM
- Broadcom's (BRCM +1.2%) 20%+ discount relative to chip peers (due to combo chip and stock compensation worries) is unjustified in light of its "leadership in attractive Networking and Broadband markets that account for 60%+ of sales and 80%+ of profits," says BofA/Merrill's Vivek Arya. His target has been upped by $5 to $50, courtesy of a sum-of-the-parts analysis.
- Arya declares Broadcom is worth $46/share even if the combo chip business is deemed worthless, and that it's worth $54/share is the business can stabilize. "At just 12x PE, 9x 2015E EV/EBTDA, solid 7-8% FCF yield, BRCM's assets look too attractive and transformation too impactful to ignore in a consolidating industry."
- The note shortly follows the launch of a new high-end smartphone/tablet combo chip that doubles 802.11ac Wi-Fi throughput (to 650Mbps) relative to existing parts. Improvements in simultaneous Wi-Fi/Bluetooth performance are also promised.
- Broadcom, which maintains a dominant share of the high-end combo chip market (Qualcomm has been exerting pressure elsewhere), says its new chip will be "shipping in mobile devices" in Q3. That could be a reference to the iPhone 6 and/or the Galaxy Note 4.
Aug. 29, 2014, 7:06 PM
- Broadcom's (NASDAQ:BRCM) WICED Sense kit contains a Bluetooth chip, five MEMS sensors (a gyroscope, an accelerometer, a compass, a barometer, and a temperature/humidity sensor), and related software. An iOS app meant to interact with the kit has been published in the App Store.
- Developers can use the kit to grab sensor data and add Web connectivity to a variety of embedded/wearable devices (the proverbial Internet of Things). Cited examples include sending a text alert if the temperature in an area of one's home rises above a certain level, and improving one's tennis stroke via sensor data obtained by attaching the kit to a racquet.
- Broadcom is hoping the kit sparks broader OEM design activity for its WICED platform, which (with the help of a Wi-Fi modem and Bluetooth bridging), aims to provide connectivity for products ranging from cameras to fridges to thermostats. Qualcomm, Intel, and Texas Instruments are some of the other companies hoping to aggressively grow their embedded chip sales.
Aug. 14, 2014, 2:59 PM
Jul. 24, 2014, 12:45 PM
- Broadcom (BRCM -1.2%) is selling senior notes due 2024 and 2044. It hasn't yet disclosed the offering's size. (prospectus)
- The company says it might use some of the proceeds to redeem up to $400M of its 2.375% 2015 notes. Broadcom had $2.36B in cash at the end of Q2, and $1.4B in debt.
- The offering comes as Broadcom gets set to wind down its baseband processor ops, and cut 2.5K jobs along the way.
BRCM vs. ETF Alternatives
Broadcom Corp is provider of semiconductors for wired and wireless communications. It provides a portfolio of SoCs that seamlessly deliver voice, video, data and multimedia connectivity in the home, office and mobile environments.
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