Mon, Apr. 27, 10:37 AM
- KLA-Tencor (KLAC +3.1%), ASML (ASML +3.3%), Photronics (PLAB +2.5%), Ultratech (UTEK +1.4%), Xcerra (XCRA +1.9%), and Rudolph Technologies (RTEC +2%) are moving higher after Applied Materials (down 7.4%) abandoned its plans to merge with fellow chip equipment giant Tokyo Electron amid tough antitrust scrutiny. The Nasdaq is up 0.5%.
- Not counting divestments, Applied/Tokyo were expected to have ~1/4 of the chip equipment market post-merger, far above #2 ASML's ~15% and #3 Lam Research's ~9%. The unraveling of the deal could be fueling speculation Applied will turn its sights on another target.
- Rudolph reports after the close. KLA is 4 days removed from beating FQ3 estimates, reporting orders ($692M) near the high end of a $500M-$700M guidance range, and announcing plans to lay off ~10% of its workforce. FQ4 guidance was somewhat light: Revenue of $710M-$790M and EPS of $0.78-$1.02 vs. a pre-earnings consensus of $782.7M and $0.99. Orders are expected to total $550M-$750M.
Fri, Apr. 24, 6:52 AM
- KLA-Tencor (NASDAQ:KLAC) is planning to cut about 10% of its workforce by the end of the first quarter as part of a realignment that includes scaling back its investment in extreme ultraviolet lithography.
- The announcement comes after the company reported lower profits but better-than-expected results for the third quarter.
- FQ3 results
- KLAC +0.3% premarket.
Thu, Apr. 23, 4:19 PM
Wed, Apr. 22, 5:35 PM
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Mon, Apr. 20, 4:52 PM
- In addition to beating FQ3 estimates, Lam Research (NASDAQ:LRCX) is guiding for FQ4 revenue of $1.46B (+/- $50M) and EPS of $1.46 (+- $0.07), above a consensus of $1.39B and $1.35.
- Shipments are expected to rise to $1.6B (+/- $50M) from FQ3's $1.497B (+20% Q/Q and topping a guidance midpoint of $1.45B). CEO Martin Anstice sings a well-known refrain. "Our differentiated products and services are directly addressing the market driving technology inflections of multi-patterning, 3D device architecture and advanced packaging."
- The deferred revenue balance rose 30% Q/Q to $485.2M. Gross margin (non-GAAP) fell 70 bps Q/Q and 80 bps Y/Y to 44.7%. Operating expenses rose 11% Y/Y to $355M. $124.9M was spent on buybacks.
- Shares have risen to $77.52 AH; the all-time high is $85.70. Goldman's table-pounding was well-timed.
- Peers are getting a lift: Applied Materials (NASDAQ:AMAT) is up 1.6% AH to $22.11, and KLA-Tencor (NASDAQ:KLAC) is up 1.1% to $59.20. KLA reports on Thursday.
- FQ3 results, PR
Tue, Apr. 14, 7:15 PM
- Goldman Sachs offers three criteria on how to pick stocks to short: Look for individual stocks with high valuations that have a tendency to underperform; take hints from mutual funds as they do a good job of selecting shorts; and look for stocks that are likely to move on company-specific factors and are less prone to moving with general market and sector trends.
- Among the overvalued stocks Goldman thinks could drop are CELG, ORLY and RHT; stocks underweight by mutual funds that could fall are HST, CTL and EQR; and likely to deviate from the broad market and their sectors are KLAC, JEC and COH.
- Rounding out Goldman's 19 stock recommendations that could reward short sellers: ARG, DO, DISCA, FLS, KSS, MOS, NDAQ, NVDA, TDC, WU.
Tue, Apr. 14, 5:23 PM
- Intel has used its Q1 report to cut its 2015 capex budget by $1.3B to $8.7B (+/- $500M). The midpoint of the guidance range implies a 14% drop from a 2014 level of $10.1B, which itself was below 2011-2013 levels of $10.7B-$11B.
- Several chip equipment makers are lower AH in response. Applied Materials (NASDAQ:AMAT) -1.4%. KLA-Tencor (NASDAQ:KLAC) -1.5%. Lam Research (NASDAQ:LRCX) -1.4%. Kulicke & Soffa (NASDAQ:KLIC) -0.8%.
- In January, TSMC set an aggressive 2015 capex budget of $11.5B-$12B; Samsung is also expected to spend heavily this year. Between them, Intel, TSMC, and Samsung account for roughly half of all chip equipment capex.
Wed, Mar. 25, 12:03 PM
- Chip stocks are particularly hard-hit (SOXX -3.6%) on a rough day for tech. The Nasdaq is down 1.3%, and the S&P 0.7%. Going into today, good earnings reports and ongoing M&A activity had led the Philadelphia Semi Index to rise 10% from its Jan. 30 close; the index remains up nearly 2x from its fall 2012 lows.
- AMD (AMD -7.2%) is a major decliner following a UBS downgrade. AMD rival/GPU giant Nvidia (NVDA -5.2%) and memory giant Micron (MU -3.7%) are also selling off, as are merger partners NXP (NXPI -3.8%) and Freescale (FSL -3.4%), RF chipmakers Avago (AVGO -5.2%), Skyworks (SWKS -5.3%), and Qorvo (QRVO -7.1%), LED/RF chipmaker Cree (CREE -4.1%), and high-flying video processor developer Ambarella (AMBA -4.3%).
- Other decliners include telecom chipmakers/ARM server CPU vendors Cavium (CAVM -4.8%) and AppliedMicro (AMCC -4.4%), microcontroller vendors Atmel (ATML -3.5%), Cypress (CY -5.5%), and STMicroelectronics (STM -3.5%), voice processor developer Audience (ADNC -3.7%), analog/mixed-signal chipmakers Linear (LLTC -3.7%), Maxim (MXIM -3%), and Intersil (ISIL -3.5%), FPGA maker Lattice (LSCC -3.9%), and mixed-signal/wireless charging IC developer IDT (IDTI -5.4%).
- Chip equipment, IP, and foundry providers are also underperforming. Big decliners include ARM (ARMH -4.4%), KLA-Tencor (KLAC -4.2%), Lam Research (LRCX -5.4%), ASML (ASML -4.1%), TowerJazz (TSEM -4.3%), Mattson (MTSN -4.5%), Ultratech (UTEK -4.7%), and Tessera (TSRA -6.1%). ASML has been downgraded to Hold by Banco Santander.
- TSMC (TSM -4.6%) is among the decliners in spite of a Digitimes report stating the foundry giant's sales are expected to rise 0%-5% Q/Q in Q2 - consensus is for a 2% drop - with strong Apple A8 CPU orders offsetting soft Qualcomm Snapdragon 810 orders.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Feb. 5, 4:51 PM
Tue, Jan. 27, 1:24 PM
- BNP Paribas has downgraded KLA-Tencor (KLAC -2.3%) to Neutral in the wake of last week's soft FQ3 outlook, which was blamed on order push-outs from foundry and logic clients.
- The chip equipment maker is now within $5 of a 52-week low of $59.44, and trades for 15x estimated FY16 (ends June '16) EPS. There's $3.2B of debt on the balance sheet following last year's leveraged recap, to go with $2.4B in cash/marketable securities.
Fri, Jan. 23, 2:25 PM
- Applied Materials (AMAT -1.7%) and ASML (ASML -1.5%) are off moderately after chip equipment peer KLA-Tencor (KLAC -7.1%) offered soft guidance (for the third quarter in a row) to go with an FQ2 beat. The Nasdaq is up 0.3%
- On the CC (transcript), CEO Rick Wallace stated KLA has seen orders from both foundry and logic clients for sub-20nm manufacturing equipment "pushed to later in the calendar year." KLA thinks the delays "reflect yield and process stability issues associated with bringing these advanced device architectures to market."
- In July and October, KLA primarily referenced foundry clients when explaining its light guidance. The logic client reference could be about Intel (by the far the biggest of them), which provided a conservative 2015 capex budget last week.
- Wallace also mentioned some orders related to "trailing-edge" manufacturing processes have been "a bit elusive," and that (notably) KLA thinks this is due to "some competitive dynamics in terms of second source strategies and so on."
- Analysts pressed KLA regarding its foundry-related issues, given TSMC is spending heavily and ASML reported strong Taiwanese foundry bookings (presumably from TSMC) earlier this week. On the other hand, memory was a strong point for both KLA and ASML in calendar Q4, respectively accounting for 44% and 27% of the companies' bookings.
Thu, Jan. 22, 5:36 PM
Thu, Jan. 22, 5:35 PM
- KLA-Tencor (NASDAQ:KLAC) guides on its FQ2 CC for FQ3 revenue of $685M-$762M and EPS of $0.63-$0.87, below a consensus of $790.5M and $0.98. Orders are expected to be in a $500M-$700M range (suggests book-to-bill will likely be below 1).
- Shares have fallen to $67.10 AH. KLA also provided light guidance in October and July, each time blaming delayed orders from a major foundry client for FinFET (3D transistor) process investments.
- FQ2 results, PR
Thu, Jan. 22, 4:16 PM
Wed, Jan. 21, 5:35 PM
Fri, Jan. 16, 7:17 PM
- A day after some industry names outperformed modestly following news TSMC (NYSE:TSM) set a high 2015 capex budget of $11.5B-$12B, chip equipment makers generally traded in-line with a rising tech sector after another one of their big-3 customers, Intel, set a conservative 2015 capex budget of $9.5B-$10.5B.
- TSMC's 2015 budget is well above a 2014 capex level of $9.52B; the world's biggest foundry is both trying to keep up with rising mobile chip orders, and investing heavily to roll out its 16nm FinFET/FinFET+ processes to counter Samsung and Globalfoundries' 14nm FinFET rollouts.
- The midpoint of Intel's 2015 budget is slightly below 2014 spending of $10.1B, which itself was below prior guidance of $10.5B-$11.5B. It's also below 2011-2013 spending of $10.7B-$11B.
- Some cautiousness from Intel might have been expected: Gartner recently forecast industry capex would rise just 0.8% this year to $65.8B, albeit with wafer fab spend rising a healthier 6.7% to $33.7B. Gartner forecast memory capex would rise 13.5% and foundry capex 4.8%, but predicted logic capex (much of it from Intel) would decline 5.3%.
- Also: TSMC has disclosed it sold the 21M-share stake it took in ASML in 2012 for $1.5B, booking a $660M profit along the way. TSMC, Intel, and Samsung each invested in ASML with the goal of accelerating its EUV lithography R&D efforts (viewed as necessary to maintain Moore's Law long-term).
- Between them, Intel, TSMC, and Samsung account for over half of industry capex.
- Chip equipment firms: AMAT, KLAC, LRCX, TER, KLIC, ACLS, UTEK, RTEC, MTSN, ATE, XCRA, OTCPK:TOELF
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