Thu, Apr. 23, 7:17 PM
- Arguably providing more ammo for those disgruntled shareholders pushing for an Intel (NASDAQ:INTC) deal, Altera (NASDAQ:ALTR) forecasts Q2 revenue will be down 4%-8% Q/Q. That implies a range of $400.6M-$418M, far below a $492.1M consensus.
- Telecom/wireless revenue (-12% Y/Y, 42% of total revenue) was a soft spot in Q1. As was industrial automation, military, & automotive (21% of revenue -7%). Networking, computer, & storage (17% of revenue, +2%) and other products (20% of revenue, +7%) were healthier. FPGAs were 84% of revenue, and CPLDs 8%. Book-to-bill was below 1.
- Shares have dropped to $40.45 AH, after having fallen 1.6% in regular trading in response to Xilinx's numbers, which were blamed to a large extent on soft mobile infrastructure demand. For those keeping score, Altera is now 26% below Intel's rumored $54/share offer price.
- Q1 results, PR
Wed, Apr. 22, 9:45 AM
- ASML has "signed an agreement with one of its major US customers to deliver a minimum of 15 ASML EUV lithography systems to support increased development activity and pilot production of future-generation manufacturing processes."
- The first two systems (NXE:3350B units) will be delivered by year's end, complementing existing systems owned by the customer. The customer "intends to use EUV lithography for multiple processing steps in future process technology nodes." Financial terms are undisclosed.
- The client is most likely Intel (NASDAQ:INTC), which invested $4.1B in ASML in 2012 to bolster its EUV efforts but has been non-committal on when it will begin using EUV for commercial production. Intel stated last year it won't use EUV for 10nm chip production - its 10nm Cannonlake platform launches in 2016.
- Today's announcement suggests Intel might use EUV for 7nm production; Intel has previously suggested it could even get to 7nm without EUV. TSMC has said it will use EUV at 7nm.
- ING thinks the order will "put pressure on other chip manufacturers, especially logic clients, to also consider bulking up orders for EUV." It comes shortly after ASML struck a cautious tone about 10nm EUV adoption, but added R&D advances are making the technology more viable for 10nm pilot production.
- Yesterday: ASML, others rally following Lam's results/guidance
Wed, Apr. 15, 2:32 PM
- InfiniBand and Ethernet adapter/switch/controller vendor Mellanox (MLNX +4.8%) is up strongly after Intel reported 19% Y/Y server CPU division growth. Fibre Channel and Ethernet adapter/switch/controller vendor QLogic (QLGC +2.4%) is also having a good day.
- On its CC (transcript), Intel (NASDAQ:INTC) stated its Grantley Xeon E5 CPUs (launched last September, used in HPC deployments featuring Mellanox hardware) now account for over half of its 2-socket server CPU volume. Not surprisingly, the company also reported seeing strong cloud and telco server CPU demand.
- Mellanox reports on April 21. QLogic hasn't set a calendar Q1 earnings date yet.
Wed, Apr. 15, 1:29 PM
- RBC and Wedbush have upgraded Intel (NASDAQ:INTC) to Outperform after the company slightly missed Q1 revenue estimates (while posting in-line EPS) thanks to weak PC sales, offered light sales guidance (as expected), cut its capex budget, and provided healthy gross margin and server CPU division (DCG) figures. Canaccord and Topeka have hiked their targets; Cowen, Deutsche, and Nomura have cut theirs.
- RBC: "Our upgrade is about double-digit [DCG] growth driving a 25% increase in cash flow over the next 2 years. It sees DCG revenue rising 13.2% in 2015 and 12.3% in 2016 - Intel has forecast a 15% CAGR through 2018 - and in doing so helping cash flow/share rise to $2.56 from 2014's $2.04.
- Also: RBC (like others) thinks PC weakness is priced in, sees "optionality" in IoT, memory, and mobile chip growth. It thinks Intel's relatively light implied 2H15 gross margin guidance is due to the accounting treatment of inventory charges.
- Wedbush notes Intel's light Q2 guidance is due to another quarter of PC CPU inventory drain, and argues this sets the stage for better 2H15 sales as Windows 10 and Intel's 14nm Skylake platform (the successor to Broadwell) launch. It also observes Intel expects mobile losses to drop by $800M in 2015 as contra revenue payments to OEMs subside.
- Mentioned on the CC (transcript): 1) NAND flash sales (grouped within the "Other" segment) were up 14% Y/Y. 2) Desktop CPU volumes were down 16% (business weakness), while notebook volumes rose 3% and tablet volumes 45%. 3) Intel now expects a mid-single digit 2015 PC decline vs. prior guidance for flat growth. 4) Intel's cautious full-year GM forecast is attributed to 10nm startup costs (ramping in Q3/Q4) and declining 22nm utilization rates as 14nm production ramps.
- Q1 results/guidance, details
Tue, Apr. 14, 4:42 PM
- Intel (NASDAQ:INTC) had a Q1 gross margin of 60.5%, -540 bps Q/Q and +90 bps Y/Y, and slightly above a guidance midpoint of 60%. Q2 GM guidance is at 62% (+/- 2%); full-year GM guidance has been cut by 1% to 61% (+/- 2%).
- Also: Intel has slashed its 2015 capex budget by $1.3B to $8.7B (+/- $500M). 2014 capex was $10.1B.
- In its CFO commentary (.pdf), Intel notes higher ASPs provided a 50 bps Q/Q GM boost in Q1, and are expected to provide a 150 bps Q2 boost; a mix shift towards server CPUs appears to be helping. Lower factory startup costs are expected to provide a 100 bps Q/Q Q2 boost, while lower platform volumes and higher platform unit costs will respectively provide 150 bps and 100 bps headwinds.
- Client Computing Group (CCG - PC/mobile processors) ASPs rose 1% Q/Q and fell 13% Y/Y in Q1 (mix shift towards Atom); unit volumes fell 18% Q/Q (seasonality and PC weakness) and rose 6% Y/Y. Data Center Group (DCG - server/networking CPUs) ASPs fell 3% Q/Q and rose 5% Y/Y; unit volumes fell 7% Q/Q and rose 15% Y/Y (the Grantley Xeon launch and Web/cloud demand).
- Segment Performance: CCG revenue -8% Y/Y to $7.42B; op. profit -24% to $1.41B. DCG revenue +19% to $3.68B; op. profit +27% to $1.7B. IoT Group revenue +11% to $533M; op. profit -24% to $87M. Software/services revenue -3% to $534M; op. profit falls to $3M from $19M. All other (flash memory, one-time expenses) revenue +13% to $615M; op. loss falls to $586M from $749M.
- $750M was spent on buybacks, down from Q4's $4B (saving cash for an Altera deal?). GAAP R&D/MG&A spend rose just 1% Y/Y to $4.95B. Intel ended Q1 with $14.1B in cash/investments ($10.7B offshore), and $13.2B in debt.
- INTC +3.1% AH. Q1 results, PR.
Tue, Apr. 14, 4:09 PM
- Intel (NASDAQ:INTC): Q1 EPS of $0.41 in-line.
- Revenue of $12.8B (+0.3% Y/Y) misses by $100M.
- Expects Q2 revenue of $13.2B (+/- $500M) vs. a $13.51B consensus.
- Expects 2015 revenue to be flat Y/Y vs. prior guidance for mid-single digit growth; consensus is for -0.3% growth.
- Shares +3.2% AH.
- Press Release, CFO commentary (.pdf)
Mon, Apr. 13, 5:35 PM
Mon, Apr. 13, 5:00 PM
- In what might be one of the most predictable acts of shareholder activism in recent memory, many large Altera (NASDAQ:ALTR) investors have sent letters to the company urging it to resume buyout talks with Intel (NASDAQ:INTC), sources tell Bloomberg. Cadian Capital (2.8% Altera stake) and TIG Advisors (1.5% stake) are said to be among the disgruntled parties.
- The letters followed reports Altera had rejected an Intel buyout offer in the low-to-mid $50s (Bloomberg reported $54/share). Altera closed at $34.58 the day before Intel buyout reports first broke, and at $43.86 today. They briefly tumbled on reports of Altera's rejection, but soon erased their losses as investors bet a deal would eventually occur.
- Altera +1.8% AH to $44.65. Intel's Q1 report arrives tomorrow afternoon; Altera's arrives on April 23.
Thu, Apr. 9, 6:03 PM
- As Intel's (NASDAQ:INTC) March 12 warning led many to expect, PC sales were weak in Q1: IDC estimates shipments fell 6.7% Y/Y to 68.5M, a much sharper drop than Q4's 2.4% and Q3/Q2's 1.7%. Gartner estimates shipments fell 5.2% to 71.7M. With IDC also reporting of price pressure, revenue declines might be larger.
- IDC: [T]he Q1 market faced multiple headwinds – including inventory build-up of Windows Bing based notebooks, commercial slow down following the [Windows] XP refresh and constrained demand in many regions due to currency fluctuations and unfavorable economic indicators." Gartner thinks sales of "mobile PCs" (notebooks, convertibles, and Windows tablets) rose, while desktop sales fell sharply. "PC replacements will be driven by thin and light notebooks with tablet functionality."
- Both Gartner and IDC report U.S. PC shipments fell only ~1% Y/Y. On the other hand, IDC thinks Japan (another high-ASP market) saw shipments fall 44%; strong Q1 2014 spending prior to a tax hike made for tough comps.
- Market leaders Lenovo (OTCPK:LNVGY) and HP (NYSE:HPQ) continued taking share from firms with less scale: IDC estimates Lenovo's share rose to 19.6% from 17.6% a year ago (3.4% unit growth), and HP's to 19% from 17.1% (3.3% unit growth).
- #3 Dell's share rose to 13.5% from 13.4%; #4 Asus (OTC:ASUUY) was flat at 7.1%, and #5 Acer (OTC:ASIYF) rose to 7% from 6.3%. Everyone else collectively fell to 33.9% from 38.4%.
- Unlike in Q4 and Q3 (seasonally stronger quarters for the company), Apple (NASDAQ:AAPL) wasn't in the global top-5. IDC estimates the company's US. unit share rose to 10.9% from 10.6%, good for fourth place (revenue share is higher).
- Other PC industry names: MSFT, AMD, NVDA, MU, STX, WDC, HTCH
Thu, Apr. 9, 2:45 PM
- Intel (NASDAQ:INTC) has awarded Cray (CRAY +0.7%) a subcontract to integrate/deliver two next-gen supercomputers and related storage for a facility at the DOE's Argonne National Laboratory (located in Illinois).
- One of the systems, known as Theta, will be based on Cray's existing XC supercomputer line, have a peak performance of more than 8 petaflops, and is expected to be delivered in 2016. The other, known as Aurora, is based on Cray's next-gen supercomputer line (codenamed Shasta), and will have a peak performance 180 petaflops; delivery is expected in 2018.
- Cray adds Shasta will feature a next-gen architecture that can be "configured to address a broad range of compute and data-intensive workflows." It will run on Intel Xeon server CPUs, and also leverage the chip giant's Xeon Phi HPC co-processors and Omni-Path high-speed interconnect (an alternative to the widely-used InfiniBand).
- Cray cautions "a range of positive financial outcomes exist with this contract due to multiple options associated with the various deliverables and funding including a separate R&D contract." Aurora delivery depends on the "anticipated" exercising of a contract option.
Thu, Apr. 9, 11:32 AM
- After initially seeing double-digit losses in response to a CNBC report (later backed up by Bloomberg) stating Intel (NASDAQ:INTC) has broken off buyout talks due to price disagreements, Altera (ALTR +0.1%) is now near breakeven.
- With the FPGA vendor's shares still 22% below the $54/share offer price reported by Bloomberg, investors/traders are betting a deal will eventually happen.
- Altera is currently up 21% from where it traded before the WSJ reported of deal talks on March 27. Q1 results arrive on April 23.
Thu, Apr. 9, 9:52 AM
- CNBC's David Faber has reported Intel (NASDAQ:INTC) has ended talks to acquire FPGA vendor Altera due to a failure to agree on price. That has fueled speculation Intel will make a bid for Broadcom (NASDAQ:BRCM), which competes with Intel in several telecom/networking chip markets and complements the chip giant's offerings in many others.
- Also possibly helping Broadcom: Ladenburg Thalmann has launched coverage with a Buy rating and $51 target.
- With a current $26.3B market cap - a buyout price would likely have to be over $30B - Broadcom would be a big fish to swallow. Q1 results arrive on April 21.
Thu, Apr. 9, 9:11 AM
- CNBC's David Faber reports Intel (NASDAQ:INTC) has ended talks to buy Altera (NASDAQ:ALTR) due to a failure to agree on price.
- Intel reportedly made an all-cash offer in the "low $50s" (sharply above Altera's Wednesday close of $42.00), and was rejected. Talks are said to have been going on for months.
- Intel -2.3% premarket to $30.60. Altera -10.6% to $37.65. Altera archrival Xilinx (NASDAQ:XLNX) -1.9% to $41.75.
- Previously: Intel reportedly in talks to buy Altera; shares soar
- Previously: Intel/Altera seen yielding many synergies, sparking more M&A
- Update: Bloomberg reports Intel offered ~$54/share.
- Update 2 (11:35AM ET): Altera has erased its losses, and Intel has mostly done the same. Xilinx is up slightly.
Wed, Apr. 8, 2:55 PM
- The roadmap for Intel's (INTC -0.1%) Atom x3 processor line (formerly codenamed SoFIA) is being expanded to cover IoT hardware, the chip giant announces on day 1 of the Chinese Intel Developer Forum (IDF). Developer kits will arrive later this year.
- Like Atom x3 parts aimed at low-end Android devices (unveiled last month), the IoT chips will have integrated 3G or 4G modems. They'll complement Intel's tiny Quark CPUs (meant for less powerful IoT devices), as well as its button-sized Curie module (features a Quark CPU, among other things) and IoT Platform.
- Intel also states it has begun shipping its 14nm Braswell low-end PC CPUs under the Pentium and Celeron brands. Braswell, the PC successor for the 22nm Bay Trail architecture, is available in dual and quad-core parts, and delivers improved graphics and power draw; CPU performance isn't expected to change much. Bay Trail's 14nm tablet successor (Cherry Trail) ships later this year.
- Also announced: 1) Rockchip, one of 3 Chinese chipmakers Intel partnered with last year (along with Spreadtrum/RDA), has struck deals with multiple contract manufacturers for products sporting Rockchip's Atom x3 chip. 2) Intel is launching an RMB120M ($19.4M) accelerator program to fund Chinese entrepreneurs. 3) Beijing traffic information service firm TransWiseway is working with Intel to create a Quark-based vehicle telematics platform.
- SA author Bruce Burnworth offered a China IDF preview yesterday.
Tue, Apr. 7, 6:16 PM
- Though Juniper's (NYSE:JNPR) switches and routers often rely on home-grown ASICs, the company's new "compute-integrated" QFX5100-AA data center switch runs on an Intel (NASDAQ:INTC) Xeon server CPU. Meanwhile, a complementary "packet flow accelerator" module features an Altera (NASDAQ:ALTR) FPGA that can be programmed to run custom apps.
- Juniper claims the switch and module, which are aimed at financial services firms demanding high throughput and low latency, can eliminate the need for a separate server to handle data processing, along with the related network hops. Private Maxeler Technologies provides a programming environment for the FPGA.
- The switch and module begin shipping in Q3. Like Juniper's recently-launched QFX10000 data center spine switches, they take aim at fast-growing Arista (NYSE:ANET), whose low-latency switches have gained a strong following with HFT trading desks and other financial firms. Arista is no stranger to using x86 CPUs or Altera FPGAs in its hardware.
- Juniper rose 3.2% today; Arista rose 0.6%. Juniper's Q1 report arrives on April 23.
- An aside: Juniper's switch highlights the product synergies that could stem from an Intel acquisition of Altera; deal talks were reported two weeks ago.
Mon, Apr. 6, 6:36 PM
- Intel's (NASDAQ:INTC) Compute Stick (first unveiled at CES) is just slightly larger than a USB flash drive, and can turn any monitor/TV set with an HDMI port into a PC. Newegg has begun taking pre-orders for a $150 Windows 8.1 model, and a $110 Linux model; shipments begin on April 24.
- Intel manages to cram a Z3735F Atom CPU (22nm, quad-core, up to 1.83GHz.), 2GB of RAM, 32GB of storage, Wi-Fi/Bluetooth radios, a USB port, and a micro USB port (for power) into the stick. The product arrives as Google and Asus get set to launch a sub-$100 Chrome OS PC stick.
- Historically, Intel's goal with such hardware hasn't been to sell huge volumes, but to provide proof-of-concepts that compel OEMs to launch similar hardware (while using Intel silicon, of course). Aside from the Compute Stick, Intel has also launched a new mini PC (NUC) sporting a Core i7 CPU with Iris 6100 integrated graphics; it's expected to sell for ~$500.
- Separately, Intel has detailed a new reporting structure that will be used in its April 14 Q1 report. Sales will be reported via 5 operating segments: A Client Computing Group (PC CPUs, mobile chips, connectivity chips); a Data Center Group (server CPUs, networking/storage processors); an Internet of Things Group (embedded CPUs); software/services (McAfee, other software, various services); and All other (flash memory, new devices, various corporate expenses).
- The new structure allows Intel to avoid separately breaking out the top and bottom-line performance of its mobile chip ops, by merging them with those of its (very profitable) PC CPU ops. With tablet CPU marketing subsidies weighing on results, Intel's mobile chip reporting segment posted a $4.2B 2014 op. loss; losses are expected to narrow in 2015, but not evaporate.
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