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.
Nov. 13, 2014, 6:15 AM
- Firm notes weakness at Marvell's (NASDAQ:MRVL) mobile & wireless unit, and the $1.5B adverse ruling on MRVL's IP claim.
- Predicts earnings pressure in Q4 and 2015.
- Analyst Mark Delaney lowers 12-month price target to $12 from $14 (yesterday's close: $13.33). He has been following the stock down since March, when shares were trading near $16. Previous rating was Neutral/Cautious.
- Shares -2.1% in early premarket trade on 500 shares.
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. 27, 2014, 10:29 AM
- Bloomberg reports Microsoft (MSFT -0.7%) has a test version of Windows Server that runs on ARM (ARMH -0.9%) server CPUs. Currently, Windows Server only runs on x86 CPUs, primarily from Intel (INTC -0.7%).
- Windows Server support would provide a major boost to the fledgling ARM server CPU ecosystem; software support has remained a question mark for it even as the likes of Dell, H-P, and Facebook gave their backing. OS support would still need to be followed by app support.
- AMD (AMD +0.4%), Cavium (CAVM -1.3%), AppliedMicro (AMCC -1.8%), and Marvell (MRVL -0.6%) have each unveiled ARM server CPUs, while often promising better power efficiency than Intel's offerings. Supporters have also noted the potential for ARM-based parts to be optimized for specific tasks (security, storage, networking, etc.); Cavium is among the leaders here.
- Intel, for its part, is countering with both low-power Atom server CPUs, and more power-efficient versions of its mainstay Xeon server CPUs (such as the just-launched Grantley). IDC estimates x86 servers (largely running on Windows Server of Linux) accounted for 78% of Q2 server industry revenue.
- Providing ARM support for Windows Server would fit with Satya Nadella's strong interest in broadening the device/platform reach of Microsoft's software and services.
Sep. 26, 2014, 5:38 PM
- Intel's (INTC +0.4%) deal to invest up to $1.5B in a Tsinghua Unigroup holding company that owns Spreadtrum and RDA Microelectronics will both help it better penetrate the low-end Chinese smartphone/tablet market and allow it to sidestep antitrust regulators, thinks Rosenblatt Securities. Chinese regulators have taken aim at Qualcomm and Microsoft, among others.
- Rosenblatt doubts the deal will have a big near-term impact on the mobile baseband market, but thinks it could be a long-term negative for MediaTek and Marvell (MRVL -0.7%), both of whom have sizable low-end Chinese shares. Spreadtrum/RDA foundry partner SMIC (SMI +1.4%) is seen as a possible beneficiary.
- Wells Fargo observes Spreadtrum had a 16% Q2 baseband share (#3, behind Qualcomm and MediaTek), and that its Chinese share is much higher. Spreadtrum's 3G baseband share was at 11%.
- On SA, ex-Intel employee Ed McKernan argues a strategy of providing Atom mobile CPU designs to 3rd-party processor vendors (such as Spreadtrum and Rockchip) could help Intel narrow its huge mobile losses. The chip giant is keen on using its manufacturing process lead to bring Atom to newer processes before comparable ARM-based CPUs arrive.
Sep. 24, 2014, 10:57 AM
- JMP's Alex Gauna has upgraded Marvell (MRVL +1.7%) to Market Perform. He sees the company grabbing 5%-10% of the Chinese 4G baseband chip market, and also expects it to benefit (given Wi-Fi and hard drive controller design wins) from the Xbox's Chinese launch.
- Gauna adds Marvell's weak YTD performance lowers downside risk. But ongoing concerns about Marvell's baseband and hard drive controller sales keep him from recommending shares "over any reasonable investment horizon."
- Previous: Marvell bulls focus on non-wireless growth
Aug. 22, 2014, 6:33 PM
- Down initially in response to its soft FQ3 guidance, Marvell (MRVL +1.7%) finished the day moderately higher. Brean and RBC lowered their targets, but both maintain bullish ratings.
- On the FQ2 CC (transcript), CEO Sehat Sutardja mentioned both FQ2 and FQ3 sales have been hurt by soft 3G baseband chip demand from a major Asian client (widely believed to be Samsung). At the same time, he noted both Marvell's storage (hard drive/SSD controller) and networking chip sales rose 6% Q/Q.
- Flat to "modest" Q/Q growth is expected for both storage and networking in FQ3. Sutardja states Marvell maintains a 60%+ hard drive controller share, and remains the top supplier of SSD controllers (no specific number is given).
- FBR's Chris Rolland thinks some investors will view the 3G weakness as "neutral to positive," given the business carries "significantly below average" margins and profitability. "At some point, we believe investors will look past the 'distraction' that is mobile and recognize the solid storage and networking business underneath, but timing remains uncertain."
- UBS' Stephen Chin is more cautious: He thinks getting Marvell's baseband ops (heavily dependent on China) to reach breakeven will "remain challenging," given demand is shifting towards 4G phones faster than Marvell can ramp 4G baseband volumes, and that Qualcomm and MediaTek provide tough competition. Broadcom can sympathize.
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