Thu, Mar. 19, 5:52 PM
- After rising 5.8% in regular trading today, specialty analog/mixed-signal chipmaker Microsemi (NASDAQ:MSCC) is up 8% since announcing yesterday morning (just before its analyst day) it's buying Ethernet chipmaker Vitesse (NASDAQ:VTSS) for $389M. Shares have made new highs along the way.
- Vitesse closed today $5.31, $0.03 above Microsemi's offer price. Ascendiant Capital's Cody Acree calls the offer "a bit low," and (given the deal is expected to be immediately accretive for Microsemi) thinks a rival bid might arrive. "Potential suitors could include Broadcom (NASDAQ:BRCM) or Marvell (NASDAQ:MRVL), who are already leaders in Ethernet and would see natural synergies in VTSS’s portfolio or Avago (NASDAQ:AVGO) who has also been particularly acquisitive."
- Meanwhile, Stifel's Tore Svanberg has hiked his Microsemi target by $5 to $40 in response to the Vitesse deal and Microsemi's analyst day presentations (slides - .pdf). "[M]anagement reiterated its strategy to maximize profitability, grow its market share in core products, while expanding its [addressable market] through new product initiatives and deeper penetration into their existing customer base."
- Svanberg adds the Vitesse deal "helps expand [Microsemi's] silicon/dollar content initiatives, especially in the comms infrastructure space and adds differentiated technology with high barriers to entry." He sees the purchase making Microsemi's goal of achieving a 60% gross margin and 30% op. margin in 2016 (compares with 56.2% and 24.4% in calendar Q4) easier to attain.
Tue, Mar. 3, 12:39 PM
- BofA/Merrill's Wamsi Mohan has reinstated coverage on Seagate (STX -5.4%) with an Underperform rating and $50 target, and on Western Digital (WDC -3.3%) with a Neutral rating and $117 target.
- Mohan is worried Q1 and Q2 hard drive demand (i.e. TAM) is tracking below expectations. With regards to Seagate, he's also worried about its relatively high PC exposure (especially for business PCs), SSD cannibalization risk in both the client and (high-margin) performance hard drive segments, and potential conflicts with OEM customers from Seagate's systems business (stems from the Xyratex acquisition).
- Though worried about Western's exposure to the same TAM issues as Seagate, Mohan is relatively positive on the company due to its "solid" SSD position (partly the result of acquisitions) and strength in the growing high-capacity enterprise drive segment (boosted by demand from Internet giants).
- Top hard drive/SSD controller supplier Marvell (MRVL -2.1%) is following Seagate/Western lower, as is hard drive assembly supplier Hutchison (HTCH -1.7%). The Nasdaq is down 0.9%.
- Marvell's decline comes as the company reveals a Release 10 4G modem at the Mobile World Congress (competes with chips from Qualcomm, Intel, and others), as well as a partnership with Google to support the Web giant's Ara modular phone project.
- Earlier: Western Digital buys object storage software firm
Fri, Feb. 20, 9:52 AM
- Deja Vu? Three months ago, Marvell (MRVL +0.9%) rallied after posting an FQ3 revenue miss and light FQ4 guidance. This morning, shares have erased the AH losses they saw on account of an FQ4 revenue miss and soft FQ1 guidance.
- Helping the chipmaker's cause: FBR has upgraded to Outperform, and upped its target by $2 to $21. The firm calls the upgrade a valuation call, and argues core earnings power remains intact.
- Also helping: When asked by JPMorgan's Harlan Sur on the CC (transcript) if Marvell is willing to "explore strategic alternatives" for its mobile chip ops, CEO Sehat Sutardja left the door open to a shakeup. "[A]nything that will bring the share value of a shareholder up is our responsibility to entertain and manage and look at all the different possibilities. But for sure okay we are not backing off from this business."
- The FQ4 revenue miss was blamed on "seasonality and a more aggressive pricing environment" for Marvell's mobile baseband chip business. Companies not named Qualcomm or MediaTek have generally struggled to profit from the R&D-intensive business, which has seen Broadcom, Texas Instruments, and ST-Ericsson leave in recent years.
- Sutardja also admitted the Chinese baseband competitive environment has "intensified" - Qualcomm recently reported something similar. 4G chip sales (+50%) were a strong point.
- Hard drive/SSD controller sales remained fairly healthy, falling 4% Q/Q (in-line with seasonality). Marvell states it gained hard drive controller share in FQ4, and that it remains the SSD controller market's leader following 30% sales growth in FY15 (ended Jan. '15).
Thu, Feb. 19, 4:22 PM
- In addition to missing FQ4 revenue estimates (while slightly beating on EPS), Marvell (NASDAQ:MRVL) is guiding for FQ1 revenue of $810M-$830M and EPS of $0.17-$0.19, below a consensus of $884.2M and $0.22.
- As was the case three months ago, no explanation is given in the earnings release for Marvell's revenue miss or guidance. Deutsche recently argued weak Chinese smartphone baseband chip sales - Marvell faces competition from MediaTek, Qualcomm, and others - would pressure FQ4 results.
- Helping EPS beating estimates: FQ4 gross margin was 51.8%, up from 51% in FQ3 and 50.1% a year ago, and above guidance of 49.5%-51.5%. FQ1 GM guidance is also at 49.5%-51.5%. Also helping: GAAP operating expenses fell 1% Y/Y to $360.5M. Just $20M was spent on buybacks.
- Shares are down to $15.60 AH.
- FQ4 results, PR
Thu, Feb. 19, 4:08 PM| Comment!
Wed, Feb. 18, 5:35 PM
Thu, Jan. 29, 12:55 PM| 1 Comment
Thu, Jan. 8, 2:38 PM
- In the wake of a Chinese media report stating a local firm is weighing a bid for Marvell's (NASDAQ:MRVL) mobile chip unit, MKM argues a sale of the business to Intel would be "a solid win-win for both parties."
- MKM asserts buying Marvell would allow Intel to "scale-up in its wireless and foundry businesses," and bolster its chances of succeeding in a very competitive mobile baseband market where Qualcomm/MediaTek still dominate.
- Meanwhile, Marvell could still see earnings grow 10% in spite of the loss of wireless sales (30% of total revenue), thanks to a 40% drop in R&D and sales/marketing spend, and relatively low mobile gross margins (~45%). MKM also believes the deal could dull patent lawsuit fears and allow Marvell to negotiate a favorable foundry deal with Intel.
- One potential roadblock: Intel's deals with Chinese baseband vendors/Marvell rivals Spreadtrum and RDA present a conflict of interest.
- Shares +15% since the Chinese report surfaced on Tuesday. Today's gains are aided by a 3.1% rise for the Philadelphia Semi Index.
Tue, Jan. 6, 12:58 PM
- After previously following the tech sector lower, Marvell (MRVL +3.5%) has popped on a Chinese media report China Electronics is weighing a bid for Marvell's mobile chip ops.
- Marvell's mobile baseband chip unit depends heavily on sales of 3G and 4G phones used on China Mobile's network. The business is believed to have much lower margins than those of Marvell's hard drive/SSD controller and Ethernet IC ops.
- Chipmakers not named Qualcomm, MediaTek, or Spreadtrum have struggled to profit from the baseband market. However, Marvell did state in November it expects strong FY16 (ends Jan. '16) growth for the business thanks to surging Chinese 4G phone sales.
Dec. 30, 2014, 6:05 PM
- French carrier Iliad's (OTC:ILIAF) Online.net unit plans to launch a cloud infrastructure service next month that runs on servers featuring ARM-based (NASDAQ:ARMH) CPUs supplied by Marvell (NASDAQ:MRVL). Making good on ARM's promise of high densities, 18 servers - each sporting one quad-core CPU - can fit onto a blade, and 16 blades can fit within a chassis.
- Though it's no Google or Amazon, Iliad provides a useful reference win for ARM server CPU vendors as they try to take share from Intel (NASDAQ:INTC), whose Xeon CPUs claim the lion's share of the server market, including most Web/cloud data center deployments.
- Canaccord has forecast ARM server CPUs, still in their infancy, will grab a 20% share by 2018. Hyperscale data centers and application-specific server appliances are seen as areas where ARM-based solutions could stand out.
- Intel is looking to head off the ARM threat both by developing low-power Atom server CPUs, maintaining a manufacturing process edge, and (notably) providing a variety of custom CPUs to Internet giants such as Amazon, Google, Facebook, and eBay; the latest offerings are packaged with Altera (NASDAQ:ALTR) FPGAs to provide on-the-fly programmability.
- Nonetheless, Facebook's Open Compute Project supports both ARM and x86 CPUs, and Google has been reported to be thinking of building its own ARM chip. An Amazon VP recently stated ARM vendors aren't keeping pace with Intel. But Amazon might simply be opting to create its own ARM designs, given it has hired several key engineers from defunct ARM vendor Calxeda.
- Cavium (NASDAQ:CAVM) and AppliedMicro (NASDAQ:AMCC) are often viewed as ARM server CPU plays. AMD, Qualcomm, and Texas Instruments are also competing in this space.
Nov. 21, 2014, 11:17 AM
- Though weak baseband processor sales are weighing on Marvell (NASDAQ:MRVL) near-term, management "expects their mobile business to turn around starting in the April quarter, and for mobile unit shipments to double y/y in FY16," notes Stifel's Kevin Cassidy. He's reiterating a Buy, albeit while cutting his target by $2 to $16 and voicing some concerns about ASP/margin erosion.
- RBC is also staying bullish, predicting mobile sales will rebound next year and that Marvell's $1.54B Carnegie Mellon infringement verdict will ultimately be lowered. The firm has also cut its target, and so have Nomura and Deutsche, but no downgrades have arrived.
- On the CC (transcript), CEO Sehat Sutardja mentioned mobile sales fell 13% Q/Q in FQ3 due to customer mix (read: weak Samsung demand) and a "shift from the carrier-driven models to the open market in China, which required full turnkey [platform] support." Turnkey revenue is expected to arrive in FQ2 of next year.
- Networking chip sales fell 7% Q/Q due to weak carrier capex, but is expected to be flat in FQ4. Storage revenue rose 3%, with both hard drive and SSD controller revenue growing. Marvell says it remains the top SSD controller vendor, and will begin seeing revenue from mobile SSD offerings next year.
- A mix shift away from mobile contributed to Marvell's better-than-expected gross margin.
- FQ3 results, guidance/details.
Nov. 20, 2014, 4:21 PM
- Marvell (NASDAQ:MRVL) expects FQ4 revenue of $880M-$900M and EPS of $0.22-$0.26, almost entirely below a consensus of $930.9M and $0.26.
- No explanation is given in the FQ3 report for the company's big revenue miss; analysts have raised concerns about Marvell's China-dependent baseband chip sales.
- Helping EPS meet estimates: FQ3 gross margin was 51%, +40 bps Q/Q and +70 bps Y/Y, and at the high end of a 49%-51% guidance range. FQ4 GM guidance is at 49.5%-51.5%.
- Also helping: GAAP opex fell 3% Y/Y to $359.6M, and $45M was spent on buybacks.
- FQ3 results, PR
Nov. 20, 2014, 4:06 PM| Comment!
Nov. 19, 2014, 5:35 PM
Nov. 17, 2014, 10:25 AM
- David Einhorn's Greenlight Capital discloses it owned 30.5M Micron (MU -1.4%) shares at the end of Q3, down from 40.3M at the end of Q2. (13F filing)
- Likewise, Einhorn's stake in Marvell (MRVL -1.8%) fell to 26.4M shares from 39.6M at the end of Q2.
- Micron has had a nice run since Einhorn first disclosed a position a year ago. Einhorn has been long Marvell since 2011.
Nov. 13, 2014, 7:54 AM
- Goldman has upgraded SanDisk (NASDAQ:SNDK) to Buy, while downgrading fellow chipmaker Marvell (NASDAQ:MRVL) to Sell ahead of its Nov. 20 FQ3 report.
- Analyst Mark Delaney expects a weak yen to continue boosting SanDisk's margins (given its Japanese NAND manufacturing ops). He estimates a 10% drop in the currency boosts SanDisk's margins by 200 bps.
- Delaney also thinks SanDisk's Malaysian NAND plans (expected to go live in mid-2015) could lower its tax rate. And like others, he forecasts a balanced NAND supply/demand environment in 2015.
- Regarding Marvell, Goldman is worried about mobile chip weakness - Marvell's baseband chip ops have been hurt by Samsung weakness - and the $1.54B judgment rendered in Carnegie Mellon's infringement suit against Marvell.
- MRVL -2.5% premarket. SanDisk hasn't moved yet.
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