Wed, Jan. 28, 5:35 PM
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Dec. 3, 2014, 1:48 PM
- The Philadelphia Semi Index (SOXX +1.7%) is making fresh highs after Microchip (MCHP +4.1%) slightly upped its calendar Q4 guidance, and stated it continues to "see an improvement in our bookings and billings since our earnings call on October 30, 2014."
- Chip stocks had also jumped following that earnings call, during which Microchip said it believed the inventory correction that triggered an Oct. 9 warning (and a major chip stock selloff) was mostly over. While a slew of chipmakers provided soft Q4 guidance after Microchip's warning, fears of a major correction didn't pan out.
- The group outperformed a bit yesterday after Cypress (CY +2.9%) announced it's merging with Spansion (CODE +2.5%), continuing the chip industry's consolidation wave. Several firms have upgraded Cypress and/or Spansion in response, praising the deal's cost synergies.
- Notable gainers include not only chipmakers, but also chip equipment, test/assembly, and IP licensing firms: ARMH +3.8%. AMBA +3%. MX +9%. MXIM +4.2%. AMCC +3.5%. ADI +3.1%. SIMG +3.7%. AMKR +4.2%. SPIL +3.3%. SYNA +2.7%. ATML +3.7%. ENTR +3.8%. AMAT +2.7%. KLAC +2.5%.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Last week: Chip stocks rally after ADI's earnings
Dec. 2, 2014, 4:33 PM
- Microchip (NASDAQ:MCHP) now expects FQ3 (Dec. quarter) revenue to be down 2% to 5% Q/Q, and EPS to be in a range of $0.60-$0.64. Prior guidance was for a 2%-7% revenue drop and EPS of $0.59-$0.64. Consensus is for revenue to fall 5% Q/Q to $520.7M, and for EPS to come in at $0.62.
- The microcontroller vendor adds it expects to "provide guidance of a low single digit sequential revenue increase" for FQ4 when it reports in late January. Consensus is for revenue to grow 3% Q/Q to $535.3M.
- "We have continued to see an improvement in our bookings and billings since our earnings call on October 30, 2014," says CEO Steve Sanghi. Microchip's early-October FQ2 warning and related commentary about an industry correction sparked a huge chip stock selloff; chip stocks rallied on Oct. 31 after Microchip said it believed most of the downturn was already behind it.
- Shares are unchanged AH for now.
Nov. 17, 2014, 9:46 AM
- A month after Qualcomm announced it's buying CSR (CSRE -0.3%) for $2.5B, Microchip (MCHP +0.4%) says it has ended discussions regarding a bid of its own.
- Microchip said in August it has held buyout talks with CSR, whose Bluetooth, GPS, and A/V chips target many of the same end-markets as Microchip's microcontrollers. But the company called the talks "very preliminary."
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 31, 2014, 9:06 AM
Oct. 30, 2014, 5:38 PM
Oct. 30, 2014, 5:23 PM
- Microchip (NASDAQ:MCHP) expects FQ3 revenue of $508M-$535.3M and EPS of $0.59-$0.64, in-line with a consensus of $525.4M and $0.62. That's better than feared, given the warning issued three weeks ago (sent shockwaves throughout the chip industry).
- The microcontroller vendor, known for experiencing industry swings ahead of many peers, says it saw "most" of its market correction in FQ2, and expects FQ3 revenue to be only "slightly below typical seasonal levels." Peers such as Atmel, STMicroelectronics, and Freescale have issued light Q4 guidance.
- Gross margin rose 10 bps Y/Y in FQ2 to 59.1%. It's expected to fall to 58%-58.2% in FQ3.
- Though officially below consensus, FQ2 revenue matched the guidance provided in Microchip's warning.
- FQ2 results, PR
Oct. 30, 2014, 4:16 PM
Oct. 10, 2014, 12:45 PM
Oct. 10, 2014, 9:59 AM
- Microchip's (MCHP -12.5%) calendar Q3 warning, which was accompanied by a declaration that it believes "another industry correction has begun and that this correction will be seen more broadly across the industry in the near future," is taking a heavy toll on chip stocks (SOXX -5.5%).
- Intel (INTC -4.2%) and many other chipmakers have joined the several firms that sold off AH yesterday in going in the same direction as Microchip: MU -5.8%. FSL -8.5%. BRCM -3.6%. SWKS -7.5%. RFMD -6.2%. XLNX -4.9%. MXIM -5%. AMBA -5.5%. IDTI -6.7%. CAVM -7.4%. AVGO -10.2%. SMTC -4.3%. SYNA -4.1%. POWI -6.9%.
- Chip equipment makers are also getting hit: AMAT -3.5%. KLAC -3.3%. LRCX -2.3%. UTEK -2.5%. KLIC -2%.
- As Microchip noted in yesterday's warning, the company's very diversified customer base, together with its recognition of distributor revenue on a customer sell-through basis rather than a distributor sell-in basis, often allow it to see industry changes before peers.
- The microcontroller vendor added its warning was driven by a September decline in sales to Chinese clients, and observed it has typically "returned to sequential revenue growth after two quarters" during past downturns.
- Chip stocks have had a good run over the last 12 months, aided by healthy mobile demand and the industry's consolidation wave.
Oct. 10, 2014, 9:07 AM
Oct. 9, 2014, 4:37 PM
- Microchip (NASDAQ:MCHP) expects FQ2 revenue of $546.2M, below prior guidance of $560M-$575.9M and a $567.9M consensus.
- CEO Steve Sanghi: "The month of September is usually a strong month for our revenue after the summer holiday period. This time, the September sales did not materialize to our expectations. The revenue miss was led by China where the September quarter is traditionally the strongest."
- Sanghi also highlights Microchip's status as a bellwether for the chip industry, due to its 80K+ customers and recognition of distributor revenue based on sell-through to customers rather than distributor sell-in. "We believe that another industry correction has begun and that this correction will be seen more broadly across the industry in the near future."
- MCHP -8.1% AH.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Aug. 28, 2014, 6:20 PM
- Microchip (MCHP +0.8%) confirms it has held talks with CSR (CSRE +35.3%) about "ways in which [Microchip's] relationship with CSR could be advanced, including possibly an acquisition of CSR." However, the talks are said to be "at a very preliminary stage."
- Microchip, whose microcontrollers are sometimes found within products that also contain CSR's Bluetooth, GPS, or A/V chips, notes it has partnered with CSR in the past, with a Bluetooth module initiative being one example.
- Back in May, Microchip announced it's buying Taiwanese Bluetooth chipmaker ISSC for $294.3M. The company has also snapped up analog chipmaker Supertex, as it takes part in a broader chip industry M&A wave.
- Earlier: CSR turns down Microchip's buyout offer
Aug. 28, 2014, 7:14 AM| Aug. 28, 2014, 7:14 AM | Comment!
Aug. 1, 2014, 6:55 PM
- In addition to beating FQ1 estimates, Microchip (MCHP +2.3%) guided for FQ2 revenue of $560M-$575.9M and EPS of $0.70-$0.74, largely above a consensus of $547.6M and $0.71.
- Microchip, often viewed as a bellwether for the chip industry, says it's "seeing a seasonally normal business environment with strengths in many of our end markets like industrial, automotive, housing, consumer electronics and personal computing."
- Microcontroller revenue rose 5.3% Q/Q and 14.5% Y/Y, with all 3 of the company's microcontroller lines - 8-bit, 16-bit, and 32-bit - posting Q/Q growth. Analog revenue (not counting the Supertex deal) rose 2.6% Q/Q and 6.8% Y/Y. Counting Supertex, analog was 24% of total revenue.
- Gross margin +50 bps Q/Q and +180 bps Y/Y to 59.8%. Microchip expects an FQ2 GM of 59.2%-59.6%.
- Microcontroller rival Atmel (ATML +2.3%) has followed Microchip higher. Atmel's Q2 report is due on Aug. 6.
- FQ1 results, PR
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