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Jan. 27, 2014, 7:14 PM
- Apple suppliers aren't responding well to the tech giant's FQ1 report. Though Apple beat estimates on the back of higher iPhone ASPs (the result of a mix shift towards the 5S), iPhone units (51M) fell short of Street expectations (56M-57M), and the company's FQ2 revenue guidance is below consensus.
- Unsurprisingly Cirrus Logic (CRUS) is the biggest decliner: its shares are down 6.7% AH. Other decliners: QCOM -1.6%. BRCM -2.3%. SWKS -2.9%. AVGO -1%. TQNT -3.4%.
- Cirrus, believed to get over 70% of its sales from Apple, reports tomorrow. Qualcomm reports on Wednesday, and Broadcom on Thursday.
- Nasdaq-100 (QQQ) futures are down 0.8% in response to Apple's numbers.
Dec. 12, 2013, 11:51 AM
- Cisco (CSCO -2.3%) is now targeting annual revenue growth of 3%-6% over the next 3-5 years, down from a prior 5%-7%, says CFO Frank Calderoni states at the networking giant's analyst meeting. In addition, Calderoni says Cisco's FY14 (ends July '14) revenue growth outlook is "basically" in-line with a Street forecast for a 4% decline.
- Cisco is now aiming for services revenue growth of 7%-10% over the next 3-5 years, down from 9%-11%; services accounted for 22% of Cisco's Oct. quarter revenue. Businesses related to "enabling the cloud" (a somewhat nebulous term) are expected to show a 12%-18% growth rate.
- Cisco, already pressured by John Chambers' macro comments, continues to trade lower. Many networking equipment peers and component/chip suppliers are also selling off; in addition to Cisco, Ciena's mixed FQ4 results and slightly soft FQ1 guidance could be playing a role here.
- Notable networking equipment/component/chip decliners: JNPR -3.1%. BRCM -2.5%. PKT -2.8%. FFIV -2.2%. ERIC -2.1%. JDSU -1.9% (getting pulled from the S&P 500). AFOP -5.5%. CAVM -1.7%. AMCC -1.8%. BRCD -1.8%. MRVL -1.6%. ARUN -1.7%. CALX -1.7%.
Dec. 10, 2013, 9:22 AM
- Two months after providing disappointing Q4 guidance, Broadcom (BRCM) has upped its revenue guidance range for the quarter to $2B-$2.05B from a prior $1.975B (+/- 3%). (PR)
- In addition, the chipmaker now expects it Q4 gross margin to be down 50-75 bps Q/Q (prior guidance was for a 50-100 bps drop), and for its R&D/SG&A expenses to be up only $30M-$50M Q/Q (prior guidance was for a $30M-$50M increase). The guidance hike comes as Broadcom's analyst day gets going (webcast).
- Broadcom attributes the improved top-line guidance to "better-than-expected revenue in each reportable segment, particularly in Infrastructure & Networking." It's worth noting optical component vendor Finisar recently provided strong guidance, thanks in large part to healthy data center-related sales. The major investments being made by Web/cloud service providers in their data center infrastructures could be playing a role.
- Broadcom's guidance could have positive implications for networking chip rivals Marvell (MRVL), Cavium (CAVM), and LSI.
Dec. 5, 2013, 6:43 PM
- JPMorgan reports Broadcom (BRCM +1.6%) will ramp shipments of 4G baseband chips to Samsung in Q1 for use in mass-market phones, and has also scored 4G baseband wins with another top smartphone vendor.
- The report comes as Broadcom gets ready to begin selling its BCM21892 4G baseband (first announced in February), and works to integrate Renesas' 4G baseband ops (acquired for $164M).
- Any 4G share gains by Broadcom would likely come at Qualcomm's (QCOM +0.1%) expense. Qualcomm had a 97% 4G baseband share earlier this year (per Strategy Analytics), and just announced a new baseband modem that leverages TSMC's next-gen 20nm manufacturing process.
- Investors have already expected Qualcomm's 4G baseband share to fall some in 2014, thanks to fresh competition from Broadcom, Intel, and Nvidia.
- The JPMorgan report is a breath of fresh air for Broadcom investors, given the company's disappointing Q4 guidance was partly due to baseband weakness.
Dec. 4, 2013, 12:54 PM
- Looking to profit from the nascent wearable computing market and stay a step ahead of Bluetooth chip rivals, Broadcom (BRCM -0.1%) has unveiled a Bluetooth SoC that both supports the low-power Bluetooth Smart standard and (more interestingly) has built-in wireless charging support. (PR)
- The SoC, called the BCM20736, supports wireless charging via the A4WP standard. It also contains a low-power ARM Cortex-M3 CPU core (often found in microcontrollers).
- Rival Qualcomm recently launched its Toq smartwatch, which contains a Bluetooth Smart chip (presumably its own) and wireless charging support. Meanwhile, Samsung (a major buyer of Broadcom's Bluetooth/Wi-Fi combo chips) acquired U.K.-based CSR's Bluetooth chip ops last year, and Apple, widely reported to be working on an iWatch, recently bought low-power Bluetooth chipmaker Passif Semi.
Nov. 20, 2013, 12:30 PM
- Qualcomm (QCOM -0.1%) CEO Paul Jacobs has promised his company will return 75% of its free cash flow to shareholders.
- The announcement comes shortly after Qualcomm announced a new $5B buyback program, and promised to spend $4B on buybacks in FY14. It also follows years of criticism about the huge sums of cash Qualcomm has lost over the years on investments (made possibly by its chip/licensing cash flows) such as Mirasol and FLO TV.
- Qualcomm also says it's looking to enable the use of 4G in unlicensed spectrum, with the help of carrier aggregation. If viable, that could open the door to additional 4G services competition, and allow existing carriers to offer faster download speeds.
- In its analyst day slides, Qualcomm notes 25 carriers are currently investing in LTE aggregation (where the company has had a baseband chip lead), and that it has scored 150+ smartphone design wins for its 802.11ac Wi-Fi chips; that suggests share gains against market leader Broadcom (BRCM -0.2%).
- Also: Qualcomm claims its app processors and 4G modems maintain sizable power consumption advantages over rival products, and that its has 55+ Chinese 4G licenses; the company has had trouble collecting royalties on some Chinese 3G TD-SCDMA phone sales.
- Previous: Qualcomm unveils new processors
Nov. 20, 2013, 12:04 PM
- Qualcomm (QCOM +0.1%) has used its analyst day to take the wraps off several new chips. Among them is the Snapdragon 805, a new flagship baseband/app processor sporting four cores running at up to 2.5GHz. (the Snapdragon 800 tops out at 2.3GHz.), as well as a next-gen GPU said to offer a 40% performance gain.
- Some other features: 25.6GB/s of memory bandwidth, support for the low-power H.265 4K video codec, and integrated motion sensor processing.
- A new 4G baseband modem, the Gobi 9x35, has also been launched. The 9x35 uses a next-gen 20nm manufacturing process (likely from TSMC), and can support (via LTE carrier aggregation) download speeds of up to 300Mbps, twice that of the current Gobi 9x25.
- Meanwhile, Qualcomm's Atheros unit is launching its IPQ processors, which combine a dual-core CPU with a packet-processing engine, for the router, home gateway, and media server markets. Qualcomm claims the IPQ line offers 70% lower power draw than rival products; it represents new competition for Broadcom (BRCM), Marvell (MRVL -0.5%), and Cavium (CAVM +0.1%).
- Qualcomm expects the Snapdragon 805 to be in commercial devices in 1H14, and for the 9x35 to begin sampling in early 2014. The company is counting on the chips to fend off intensifying baseband and app processor competition from Intel, Broadcom, MediaTek (just launched an 8-core CPU), and Nvidia. The company's lead in integrating powerful app processors with 4G modems still gives it an edge when competing for many designs.
Nov. 13, 2013, 8:34 PM
- Cisco's (CSCO) dispiriting Jan. quarter guidance and Oct. quarter order data has produced an AH selloff in enterprise IT and telecom equipment names, as well as a couple of the companies supplying them. NetApp's below-consensus guidance might not be helping either.
- HPQ -2.1% AH. IBM -1.1%. ALU -2%. FFIV -1.9%. CIEN -0.9%. CAVM -3%. BRCM -1.3%.
- Cisco's slumping FQ1 service provider (-13% Y/Y) and emerging markets (-12%) orders are bound to fuel concerns about carrier capex and macro trends. At the same time, it's worth noting Juniper and Alcatel-Lucent have been seeing better router sales to carriers (though not to Asia), and that Huawei has been doing better in emerging markets.
- The rest of Cisco's order data for major regions and customer groups was relatively better, but not exactly encouraging. Americas orders -2%, EMEA -4%, Asia-Pac (hurt by emerging markets weakness) -9%. Enterprise orders +2%, commercial (SMBs) +1%, public sector -1%.
- Switch sales (31% of revenue) rose 3% Y/Y, while routers (17% of revenue) fell 1%. Collaboration rose 1%, and service provider video fell 14% due to set-top weakness. Cisco's ASR 9000 edge router line, which EZchip (EZCH) supplies network processors for, grew 20% in FQ1 vs. 43% in FQ4.
- Data center (UCS servers) had another strong quarter, growing 44%, but still only accounts for 5% of revenue. Wireless (dominated by Wi-Fi gear) grew only 8% after growing 32% in FQ4 (could be a negative for ARUN and RKUS).
- John Chambers was asked on the CC (transcript) if the NSA spying uproar was affecting Cisco. He admitted it's a problem in China, but denied it was a major issue elsewhere.
Nov. 13, 2013, 12:15 PM
Nov. 12, 2013, 2:29 PM
- Reuters reports Arista Networks, a maker of data center switches that has increasingly become a thorn in Cisco's (CSCO +1.3%) side, has hired Morgan Stanley, Citi, and Credit Suisse to handle a 2014 IPO.
- The high port densities and low latencies provided by Arista's switches have helped the company score dozens of blue-chip customers, many of which are in the financial services vertical (traders place a premium on low latency). Whereas Cisco relies heavily on proprietary ASICs, Arista relies on off-the-shelf network processors from the likes of Broadcom (BRCM) and Intel.
- Analysts think the company could see a $2.5B IPO valuation; with ISI estimating Arista will do $300M+ in 2013 sales, that could translate into an ~8x price/sales multiple.
- Cisco's recent Insieme switch launch was aimed partly at Arista. Cisco also launched a low-latency data center switch a year ago in an effort to better compete against Arista.
- Ahead of the Insieme launch, Arista unveiled new small-form-factor switches offering better programmability than their predecessors, and enabling simpler data center network architectures.
Oct. 25, 2013, 1:35 PM
- IBM (IBM -0.6%) is licensing four ARM (ARMH +2.1%) Cortex CPU cores to offer to clients of its custom ASIC business, as well as ARM's Mali GPU cores. (PR)
- The deal is notable both due to the size of IBM's custom ASIC ops - clients include Cisco and Juniper - and the fact the business has thus far relied on Big Blue's proprietary Power CPU cores.
- The deal comes shortly after Broadcom (BRCM +0.7%), which has traditionally relied on cores from Imagination's (IGNMF) MIPS unit, announced it would build 64-bit network processors (NPUs) based on ARM cores using a next-gen 16nm process. Broadcom has taken out a costly ARM architectural license to build custom cores, and promises unmatched performance.
- ARM-based cores have historically had a small presence in the NPU space, which has been dominated by Power, MIPS, and (largely Intel-based) x86 offerings. But the tide is turning: In addition to IBM and Broadcom, NPU vendors Cavium, Freescale, and LSI have embraced ARM.
- NPUs are bound to be a lower-volume business for ARM than mobile processors. But they also carry higher ASPs, and potentially (if 64-bit cores are widely used) higher royalty rates.
- IBM's chip unit, which faces tough competition from foundry rivals such as TSMC and GlobalFoundries, posted 1% Y/Y sales growth in Q3.
Oct. 23, 2013, 9:43 AM
- Cree (CREE -18.4%) has been cut to Hold by Needham, and to Underweight by Stephens, after the company posted mixed FQ1 results and provided FQ2 guidance that was largely below consensus.
- Broadcom (BRCM -8.5%) has been cut to Neutral by Wedbush after providing soft Q4 guidance to go with a Q3 beat, and announcing job cuts.
- Rackspace (RAX +1.8%) has been upgraded to Outperform by Oppenheimer; Q3 results arrive on Nov. 11.
- ARM (ARMH -4.3%) has been cut to Neutral by UBS a day after posting Q3 results.
- AOL (AOL +2.7%) has been started at Buy by BofA/Merrill.
- SeaChange (SEAC +4.2%) has been started at Strong Buy by BWS Financial.
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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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