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Broadcom Corporation (BRCM)

  • May 2, 2014, 9:28 AM
    • Having previously believed Broadcom (BRCM) would either scale its baseband processor ops to profitability or exit the business, Nomura's Romit Shah thinks "more recent data" suggests neither is happening, and as a result is downgrading the chipmaker to Neutral.
    • Shah argues Broadcom, which bought Renesas' 4G baseband unit last year for $164M and reportedly has scored design wins with Samsung and another OEM, is only making "incremental" 4G baseband progress in a market dominated by Qualcomm. Meanwhile (as discussed recently by OTR Global), 3G baseband sales have been pressured amid competition from Qualcomm and MediaTek.
    • Shah had already cut his baseband revenue forecast by $200M to $600M following last week's Q1 report. He also noted management believes slowing high-end smartphone sales will make it tough for Broadcom's market-leading connectivity (combo chip) business to grow this year  - it faces growing competition from Qualcomm's Atheros unit - and that its Mobile & Wireless unit posted an op. loss for the first time since '09.
    • In contrast with Nomura's take, CLSA thinks management remarks suggest Broadcom is "preparing to make a call" on its baseband unit, and believes an exit by year's end is "highly likely." Prior to Broadcom's report, the firm argued the baseband market has turned into a two-horse race between Qualcomm and MediaTek (76% combined 2013 share, per Strategy Analytics), leaving Broadcom, Intel, Nvidia, and Marvell out of luck.
    | May 2, 2014, 9:28 AM | 2 Comments
  • Apr. 24, 2014, 4:36 PM
    • Pandora (P) expects Q2 revenue of $213M-$218M and EPS of $0.00-$0.03, below a consensus of $219.3M and $0.05. Full-year guidance is for revenue of $880M-$900M (up $10M from prior guidance) and EPS of $0.14-$0.18 (up $0.01) vs. a consensus of $892.3M and $0.16. Shares -5% AH. (Q1 results, PR)
    • SunPower (SPWR) expects Q2 revenue of $575M-$625M and EPS of $0.15-$0.35, largely below a consensus of $628.3M and $0.30. Full-year guidance is stronger: revenue of $2.5B-$2.65B and EPS of $1.10-$1.40 vs. a consensus of $2.55B and $1.21. Shares +0.9% AH. (Q1 results, PR)
    • Broadcom (BRCM) expects Q2 revenue of $2B-$2.1B vs. a $2.07B consensus. Gross margin is expected to rise 75-175 bps Q/Q. Shares -0.2% AH. (Q1 results, PR)
    | Apr. 24, 2014, 4:36 PM | Comment!
  • Apr. 24, 2014, 4:07 PM
    • Broadcom Corporation (BRCM): Q1 EPS of $0.51 beats by $0.05.
    • Revenue of $1.98B (-1.0% Y/Y) beats by $20M.
    • Press Release
    | Apr. 24, 2014, 4:07 PM | Comment!
  • Apr. 24, 2014, 12:10 AM
  • Apr. 23, 2014, 5:35 PM
  • Apr. 2, 2014, 4:35 PM
    • As part of a change of coverage for chip stocks, Piper is upgrading Intel (INTC) to Overweight, and downgrading Broadcom (BRCM) to Neutral.
    • The firm thinks Intel will benefit from stabilizing PC sales, and is worried about Broadcom's mobile customer concentration (presumably with Apple and Samsung).
    • IDC still expects PC shipments to fall another 6% in 2014. But Y/Y decline rates have been narrowing in recent quarters.
    • OTR Global recently reported Broadcom's 3G baseband chip sales to Samsung have fallen sharply. Samsung has also taken steps to increase its use of in-house Wi-Fi and Bluetooth chips, though that hasn't stopped Broadcom from continuing to secure combo chip design wins.
    • Apple bought Bluetooth chipmaker Passif Semi last year (possibly for iWatch R&D), but hasn't yet done anything to suggest it's working on Wi-Fi chips.
    • INTC +0.4% AH. BRCM -0.8%.
    | Apr. 2, 2014, 4:35 PM | Comment!
  • Mar. 31, 2014, 6:52 PM
    • An early teardown (translation) of Samsung's (SSNLF) Galaxy S5 has turned up the same 6-axis InvenSense (INVN) motion sensor found in the Note 3. The InvenSense part displaces the STMicroelectronics (STM) motion sensor found in the S4.
    • Multiple Maxim (MXIM) power ICs were also uncovered. Though Barclays thinks Maxim lost the gesture IC slot it had in the S4 to rival AMS, it nonetheless thinks its dollar content grew ~10% (previous).
    • An NXP (NXPI) NFC controller/secure element displaced the Broadcom (BRCM) NFC chip that went into the S4; Barclays estimates the design win will be worth $50M-$60M to NXP, assuming average content of $1. Broadcom is still expected to get $4/unit for supplying the S5's Wi-Fi/Bluetooth combo chip.
    • Synaptics (SYNA) is believed to have the S5's touch controller slot and (though not revealed in the teardown) its fingerprint/swipe sensor slot. The company's S4 touch controller win delivered a windfall.
    • Though a Skyworks (SWKS) power amplifier module and discrete amplifier were found, and a Wi-Fi filter is believed to be present, Barclays thinks Skyworks' content share likely fell, thanks to the absence of Wi-Fi switch/LNA content. It also thinks the total value of the S5's Wi-Fi RF content is lower due to Broadcom's use of internal power amplifiers (possibly a negative for S4 supplier ANAD).
    • Separately, DisplayMate calls the S5's OLED display "the best-performing smartphone display we have ever tested," after doing an in-depth analysis. The display's color accuracy, brightness, ambient lighting performance, and power efficiency all receive high marks. OLED materials/tech supplier Universal Display (OLED) will be happy to hear that.
    | Mar. 31, 2014, 6:52 PM | 10 Comments
  • Mar. 27, 2014, 10:16 AM
    • OTR Global reports Broadcom's (BRCM -2.2%) 3G baseband processor sales to top customer Samsung have fallen 50% Y/Y.
    • Broadcom has faced tough competition in the baseband market from Qualcomm (64% 2013 share, per Strategy Analytics), as well as MediaTek and Spreadtrum, who have been growing quickly in the low-end and mid-range segments with the help of aggressive pricing. The company partly blamed its weak Q4 guidance on baseband softness.
    • Broadcom is counting on sales of its recently-launched M320 4G baseband/app processor, a variation of a product acquired through the Renesas deal, to help offset 3G weakness.
    • The Linley Group offered a mixed review for the M320, stating it "combines a leading-edge LTE baseband with a mediocre application processor." Qualcomm has dominated the 4G baseband market to date with the help of solutions that combine powerful app processors with advanced modems.
    • Nonetheless, Samsung has designed the M320, aimed at sub-$300 phones, into its mid-range Galaxy Core LTE phone. JPMorgan reported in December Broadcom had scored 4G baseband wins with Samsung and another top OEM.
    | Mar. 27, 2014, 10:16 AM | 1 Comment
  • Mar. 5, 2014, 6:06 PM
    • After growing ~60% in 2013 (and fueling global shipment growth of 39%), IDC expects Chinese smartphone shipment growth to slow to ~20% in 2014 and just ~10% in 2015.
    • Though only 40% of China's 1B+ mobile users now use a smartphone, IDC's Kiranjeet Kaur notes most users who can comfortably afford a smartphone have already bought one. Plunging low-end Android prices could expand the addressable market in a country whose nominal per capita GDP is around $6K.
    • India, which has a sub-10% smartphone penetration rate, still presents a major growth opportunity. But with a nominal per capita GDP of ~$1,500, the country is even more cost-sensitive than China.
    • With China slowing down and developed markets living up to their name, IDC expects global smartphone growth to slow to 19% in 2014; that still spells total volumes of 1.2B. Tough competition and the ongoing mix shift towards emerging markets is expected to lead the industry's ASP to fall $27 to $308.
    • Smartphone OEMs with strong Chinese exposure: AAPL, SSNLF, LNVGY, ZTCOY
    • Chip suppliers: QCOM, BRCM, CRUS, SWKS, RFMD, MRVL
    • Chinese carriers: CHL, CHU, CHA
    | Mar. 5, 2014, 6:06 PM | 26 Comments
  • Feb. 24, 2014, 3:05 PM
    • Samsung's (SSNLF, SSNGY) Galaxy S5 is the first smartphone to support 802.11ac 2x MIMO, a technology that doubles theoretical peak download speeds to 867Mbps compared with regular 802.11ac (supported by the Galaxy S4).
    • MIMO support is likely a positive for Samsung combo chip supplier Broadcom (BRCM +0.6%). Broadcom just happened to announce its first 802.11ac 2x2 (antenna) MIMO smartphone combo chip this morning.
    • The S5 is also the first smartphone to support phase-detection autofocus (found in SLRs), and among the first to support on-the-fly HDR processing. Samsung claims the S5's auto-focus time (0.3 seconds) is unmatched.
    • Along with the S5, Samsung is launching a companion fitness tracker called the Gear Fit. The device can receive notifications from Samsung smartphones, and will compete in a crowded market headlined by Nike's FuelBand.
    • The Verge isn't impressed by the S5's fingerprint scanner, calling it "quite unreliable and virtually impossible to activate when holding the phone in one hand." It offers a more positive take on the device's heart monitor.
    • S5 event live blogs: I, II
    | Feb. 24, 2014, 3:05 PM | 2 Comments
  • Feb. 24, 2014, 4:14 AM
    • Chip makers such as Intel (INTC) and Broadcom (BRCM) are using the Mobile World Congress to demonstrate technology that will increase network speeds.
    • One new service is expected to provide download rates of up to 300 megabits a second, four to six times the top speeds of existing LTE networks.
    • The companies are out to chip away at the dominance of Qualcomm (QCOM), which holds 9% of the LTE market.
    • Other companies that are putting out decent LTE chips include Nvidia (NVDA), MediaTek, Marvell Technology (MRVL), and Spreadtrum Communications (SPRD).
    • More on the Mobile World Congress.
    | Feb. 24, 2014, 4:14 AM | 3 Comments
  • Feb. 18, 2014, 6:24 PM
    • QLogic (QLGC) is acquiring assets related to Broadcom's (BRCM) 10/40/100-gig Ethernet controller business, along with IP licenses related to Broadcom's NetXtreme II Ethernet controllers, for $147M in cash.
    • In addition, QLogic is licensing Broadcom patents related to QLogic's Fibre Channel (storage networking) hardware for $62M, and will rely on Broadcom ASICs for NetXtreme II controllers. The license allows QLogic to avoid the type of lengthy legal battle archrival Emulex has seen with Broadcom.
    • Broadcom says the deal will allow it to focus its "internal Ethernet controller efforts on strengthening its end-to-end data center platform." That suggests Broadcom is de-emphasizing the PC/workstation Ethernet controller market, where the company has long had a major position but has also faced stiff competition and price pressure.
    • QLogic, meanwhile, is lowering its dependence on a Fibre Channel business that has seen very little growth in recent quarters, and is gaining additional products to cross-sell to enterprise hardware OEMs
    • Both companies expect the deal to be accretive to EPS. QLGC +0.9% AH.
    | Feb. 18, 2014, 6:24 PM | Comment!
  • Feb. 14, 2014, 1:40 PM
    • Barclays' Blaine Curtis has upped his NXP (NXPI +4.4%) PT to $73, while reiterating an Overweight. Shares have made fresh highs in response.
    • Curtis expects Samsung's Galaxy S5 to rely on an NXP NFC chip; Samsung tapped Broadcom (BRCM) to supply the S4's NFC chip. He also talks about a strategic relationship with Apple for mobile payments, and predicts NXP will be aggressive in using its 25M-share buyback authorization.
    • Apple has been reported to be working on a mobile payments service, and NXP manufactures the M7 motion co-processor found in the iPhone 5S and iPad Air. However, Apple has thus far held off on including NFC chips within its hardware.
    • NXP shares rallied last week thanks to a Q4 beat.
    | Feb. 14, 2014, 1:40 PM | Comment!
  • Jan. 30, 2014, 7:04 PM
    • Broadcom (BRCM) expects Q1 revenue of $1.9B-$2B vs. a $1.97B consensus. Gross margin is expected to drop 50-100 bps Q/Q. Shares +2.2% AH; expectations were depressed following Apple and Samsung's earnings/guidance. (Q4 results, PR)
    • NetSuite (N) expects Q1 revenue of $119M-$121M and EPS of $0.01-$0.02 vs. a consensus of $119.7M and $0.06. The company expects 2014 revenue of $535M-$540M and EPS of $0.24-$0.26 vs. a consensus of $532.9M and $0.28. Shares +2.5% AH. (Q4 results, PR)
    • Computer Sciences (CSC) now expects FY14 (ends in March) EPS from continuing ops of $3.80-$3.90, above prior guidance of $3.50-$3.70 and a $3.68 consensus. Shares +1.5% AH. (FQ3 results, PR)
    • Microchip (MCHP) expects FQ4 revenue of $482.4M-$496.8M and EPS of $0.59-$0.63 vs. a consensus of $488.4M and $0.62. Shares -4.1% AH. (FQ3 results, PR)
    | Jan. 30, 2014, 7:04 PM | Comment!
  • Jan. 30, 2014, 4:54 PM
    • Broadcom Corporation (BRCM) declares $0.12/share quarterly dividend, 9.0% increase from prior dividend of $0.11.
    • Forward yield 1.64%
    • Payable March 3; for shareholders of record Feb. 14; ex-div Feb. 12.
    | Jan. 30, 2014, 4:54 PM | Comment!
  • Jan. 30, 2014, 4:09 PM
    • Broadcom Corporation (BRCM): Q4 EPS of $0.60 beats by $0.03.
    • Revenue of $2.06B (-1.0% Y/Y) beats by $40M.
    • Shares +5.1%.
    • Press Release
    | Jan. 30, 2014, 4:09 PM | Comment!
BRCM vs. ETF Alternatives
Company Description
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.