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.
Jul. 23, 2014, 10:44 AM
- After "testing the market" to find a buyer for its money-losing baseband chip unit (previous), Broadcom (BRCM +0.8%) has decided to simply wind it down, CEO Scott McGregor stated on the Q2 CC (transcript).
- The chipmaker plans to cut 2.5K jobs (~1/5 of its workforce), and record $230M in charges (mostly cash-based) over the next 12 months. $164M worth of impairment/inventory charges were recorded in Q2.
- Broadcom's baseband ops are only expected to account for $50M-$60M of expected Q3 revenue of $2.1B-$2.25B. In Q2, they accounted for $84M of the company's $781M in mobile/wireless chip sales (combo chip-dominated).
- While mobile/wireless sales fell 8% Q/Q due to baseband weakness, infrastructure/networking sales grew 10% to $635M, aided by healthy Ethernet switching chip demand for data center and carrier hardware - heavy spending by Internet giants has bolstered the former market - and the displacement of internally-developed ASICs at switch OEMs.
- Broadband chip sales rose 12% Q/Q to $625M, thanks to healthy modem and set-top IC sales. Broadcom says it's gaining emerging markets set-top share, and also benefiting from the adoption of advanced features (multi-stream transcoding, extra tuners, the adoption of MoCA home networking).
- Prior Broadcom earnings coverage
Jul. 22, 2014, 5:26 PM
- Broadcom (NASDAQ:BRCM) expects Q3 revenue of $2.1B-$2.25B, in-line with a $2.19B consensus.
- Q2 product gross margin was 55%, +280 bps Q/Q and +290 bps Y/Y, and above guidance of 53.95%-54.95%.
- Q3 product GM is expected to be at 55% (+/- 75 bps), and opex is expected to decline $40M-$60M Q/Q (job cuts related to the baseband exit?).
- Q2 results, PR
Jul. 22, 2014, 4:10 PM| Comment!
Jul. 21, 2014, 5:35 PM
Jul. 9, 2014, 11:48 AM
- Citing the margin and cash flow benefits that will come from its planned baseband processor exit, Oppeheimer has upgraded Broadcom (BRCM +1.5%) to Outperform, and set a $45 PT.
- Broadcom is up 20% since announcing on June 2 it's exploring a sale or wind-down for its money-losing baseband ops, which had only a 4% share in 2013 thanks to tough competition from Qualcomm/MediaTek.
- Street commentary on the move has generally been positive, though some concerns exist about its impact on Broadcom's Wi-Fi/Bluetooth combo chip sales. Digitimes has reported the Chinese government could acquire in Broadcom's baseband unit in an attempt to lower the dependence of local OEMs on Qualcomm and other foreign suppliers.
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.
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. 17, 2014, 11:08 AM
- Benchmark's Gary Mobley has cut Broadcom (BRCM -0.5%) to Hold, albeit while keeping his $40 PT.
- Like others on the Street, Mobley is worried about low-end/mid-range combo chip share loss as Broadcom exits the baseband market - as it is, Qualcomm's Atheros unit has been pressuring Broadcom in this space. Nonetheless, he sees the baseband exit providing a $0.40 2015 EPS boost.
- The downgrade comes a day after Broadcom made new 52-week highs.
Jun. 6, 2014, 2:27 PM
- Broadcom (BRCM +0.6%) has bought a unit of India's Ittiam Systems that specialized in improving Wi-Fi transfer speeds, the Economic Times reports.
- The purchase comes as Broadcom faces tougher competition in its Wi-Fi/Bluetooth/GPS combo chip business from Qualcomm and others, particularly in the low-end/mid-range smartphone market.
- The company still dominates the less cost-sensitive high-end segment, thanks in large part to major design wins with Apple and Samsung. Broadcom had an estimated 39% of the 2013 mobile connectivity market.
- Shares +19% on the week due to enthusiasm about Broadcom's planned baseband exit.
Jun. 4, 2014, 1:40 PM
- Drexel Hamilton's Richard Whittington has joined the list of analysts praising Broadcom's (BRCM +2%) plans to exit the baseband chip market, upgrading shares to Buy and lifting its PT by $15 to $45.
- Whittington has upped his 2014 EPS estimate by $0.18 to $2.58 (above a $2.54 consensus). He also sees Broadcom benefiting from Apple, Google, and Samsung's home/auto connectivity initiatives - the company was one of many partners mentioned by Apple when the company unveiled its HomeKit automation platform on Monday.
- Stifel downgraded Broadcom to Hold yesterday; like Wells Fargo, it's worried a baseband exit could lead to combo chip share losses.
- Separately, Taiwan's Economic Daily News states MediaTek is "likely" to buy Broadcom's baseband unit, which many think will be shut down rather than sold. It's worth noting MediaTek already has an extensive lineup of 3G basebands, and is getting ready to ramp shipments of a 4G part.
Jun. 2, 2014, 12:50 PM
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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