Dec. 17, 2013, 2:57 PM
- Avago (AVGO +7.6%) is now up 18% (good for a $2.1B increase in market cap) since announcing a $6.6B deal to acquire LSI yesterday morning. Many of its chip industry peers have also rallied; the Philadelphia Semiconductor Index (SOXX +1.2%) is up 2.5% over the last two days.
- The sharply contrasting nature of Avago and LSI's product lines - Avago depends heavily on RF and optical component sales, while LSI depends on storage controllers/adapters and network processors - could be fueling hopes other chipmakers will use M&A to expand their product lines and achieve greater scale.
- Today's notable gainers include EZchip (EZCH +6.7%), OmniVision (OVTI +3.6%), Skyworks (SWKS +3%), Cavium (CAVM +3%), Audience (ADNC +5.8%), Cirrus Logic (CRUS +3.4%), and Semtech (SMTC +3%). Cirrus and OmniVision, which both depend heavily on Apple orders, might also be getting a boost from a positive Q4 pre-announcement from Germany's Dialog Semi (gets ~70% of its sales from Apple).
- Several firms have hiked their Avago PTs in response to the LSI deal, which is set to be financed with $4.6B in debt and a $1B convertible note investment from Silver Lake (conversion price of just $48.04). Nomura expects the deal to lift Avago's 2015 EPS by $1.00-$1.50; Avago is promising $200M/year in synergies by the end of FY15 (ends Nov. '15). RBC thinks FY15 EPS of ~$5 is possible; the consensus is at $3.89.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Dec. 4, 2013, 9:10 AM
Dec. 3, 2013, 6:50 PM
- The Nikkei reports Sony (SNE) is looking to acquire a chip fab from struggling Renesas (RNECY), and plans to use it to expand CMOS image sensor production. The expected sale price is said to be $96M; an MOU could be signed as soon as the beginning of next week.
- The paper points out Sony already has a ~30% share of the CMOS image sensor market, thanks in part to growing sales to Apple, Samsung, and other mobile OEMs.
- The report comes as image sensor rival OmniVision (OVTI) provides soft guidance to go with an earnings beat, and reports of seeing "intensifying competition."
Dec. 3, 2013, 5:38 PM
Dec. 3, 2013, 4:52 PM
- Though OmniVision's (OVTI) FQ2 results beat estimates, the image sensor vendor is guiding for FQ3 revenue of $310M-$340M and EPS of $0.28-$0.44. That's largely below a consensus of $399.9M and $0.43. (PR)
- OmniVision notes its saw slowing smartphone market growth in FQ2 - IDC estimates calendar Q3 shipments rose 39% Y/Y, albeit with a mix shift towards cheaper phones - as well as "intensifying competition." The company has been battling not only with age-old rival Sony (Apple's other iPhone image sensor supplier), but also Samsung and low-end upstarts such as Himax (HIMX - previous).
- FQ2 gross margin was 18.8%, +140 bps Q/Q and +220 bps Y/Y. In addition, cost controls resulted in opex falling 2% Y/Y to $49.9M (12.5% of revenue).
- OmniVision's cash balance rose by $25.1M Q/Q to $265.6M.(equal to 35% of its current market cap). With shares depressed, could the company end up deploying some of that cash in a new buyback? OmniVision hasn't announced one since 2011.
- CC at 5PM ET. FQ2 results, PR.
Dec. 3, 2013, 4:26 PM
Dec. 3, 2013, 12:10 AM
Dec. 2, 2013, 5:35 PM
Nov. 7, 2013, 3:59 PM
- Though some bad news was expected thanks to the guidance provided by mobile chip peers in recent weeks, Qualcomm (QCOM -3.8%) continues to slump in response to its soft FQ1 guidance, which reflects a big expected slowdown in chip shipment growth, and mixed FY14 guidance (above-consensus EPS, but below-consensus revenue).
- On its CC (transcript), Qualcomm mentioned its chip division (QCT) growth will "moderate" in FY14 in part due to product mix - the fact the high-end smartphone market is "increasingly concentrated" (i.e. Samsung and Apple dominate) is said to affect QCT's sales and margins. While both Apple and Samsung are Qualcomm baseband chip clients, Apple relies on its own app processors, and Samsung partly does so.
- At the same time, Qualcomm, which has been aggressively ramping R&D spend in recent quarters, says it will "control expenses" in FY14, and will exit FY14 with a lower opex run rate than it exited FY13 with. That, along with $4B in planned buybacks, is a major reason why FY14 EPS guidance is above consensus.
- Goldman (Buy) is pleased with Qualcomm's FY14 3G/4G device ASP guidance of $216-$230, which implies only a 1% drop at the midpoint. It also likes Qualcomm's Chinese 4G optimism and guidance for 15% 2014 3G/4G device growth. Nomura (Buy) is disappointed with Qualcomm's FQ1 demand, but also declares the company is "demonstrating more leverage" than expected.
- Other mobile chipmakers are also underperforming: TQNT -5%. ANAD -4.3%. SWKS -3.5%. RFMD -3.1%. OVTI -2.8%.
Nov. 7, 2013, 8:14 AM
- Himax (HIMX) expects Q4 revenue to be flat or slightly down relative to Q3's $192.8M; the consensus is for revenue to rise to $208M. Q4 EPS is expected to be in a range of $0.081-$0.101, below an $0.11 consensus.
- Weakness in Himax's large-panel LCD driver business (reported yesterday by Digitimes) is blamed: Himax sees large-panel sales falling at a double-digit Q/Q clip due to soft TV, laptop, and monitor sales, and the end of China's TV subsidy program. The company remains upbeat long-term thanks to demand for larger TV screen sizes, and expects stronger sales to non-Chinese OEMs next year. Some of the Q4 weakness was likely priced in.
- Small/medium-panel driver demand is healthy, fueled by smartphone-related sales to both top-tier OEMs and Chinese white-label vendors. Smartphone driver demand is expected to grow at a double-digit Q/Q rate in Q4, and remain strong in 2014. Tablet/automotive driver sales are expected to be flat.
- Himax strikes an upbeat tone about its non-driver bsuiness, talking up new ASIC projects and touch controller wins, LCOS microdisplay wins from customers not named Google, and the potential of an 8MP image sensor launching in Q4 (acts as fresh competition for OVTI). But no specific guidance is given.
- Q3 gross margin was 25.3%, +70 bps Q/Q and +200 bps Y/Y. Large-panel driver sales (30% of revenue) -25% Y/Y after dropping 19% in Q2, small/medium-panel driver sales (52% of revenue) +15% vs. +32% in Q2, non-driver products (18% of revenue) +31% vs. +22%.
- HIMX -1.8% premarket. CC underway. Q3 results, PR.
Oct. 4, 2013, 1:17 PM
- SanDisk (SNDK +2.6%) and Micron (MU +1.6%) are adding to their 2013 gains after rival memory giant Samsung provided a Q3 op. profit guidance range whose midpoint is above analyst estimates.
- Samsung, whose full results arrive later this month, has been expected to report strong numbers for its DRAM/NAND flash ops, thanks to strong mobile demand and a favorable supply/demand balance that got better following a massive fire at a Chinese SK Hynix DRAM fab.
- Several other chipmakers with strong mobile exposure, some of whom are major suppliers to Samsung's mobile device unit, are also rallying: SYNA +4.4%. OVTI +3.6%. SWKS +3.2%. RFMD +2.7%. ANAD +2.5%.
Sep. 25, 2013, 12:58 PM
- The Samsung Solutions Exchange (SSNLF.PK, SSNGY.OB), announced this morning, represents the electronics giant's biggest effort yet to grow its enterprise mobile clout, and in doing so become a little less dependent on Google.
- The exchange serves as an app store for enterprise-specific apps, provides access to Samsung's enterprise SDK and 1K+ APIs, and acts as a meeting place for developers and businesses. It complements Samsung's SAFE initiative, which provides the company's Android hardware with a variety of security, device management, and data-syncing features.
- Though Android's smartphone unit share is now over 5x that of the iPhone's, iOS has been faring better in the enterprise, thanks to both demographics and Android security concerns.
- Separately, Samsung announces it will launch a phone with a curved display next month in South Korea. Details are currently light, but there's a good chance the phone will use Universal Display's (OLED +1.1%) flexible OLED tech.
- Also: Samsung says it has developed image sensor tech that significantly improves the light sensitivity and color fidelity of its CMOS image sensors. The technology, known as Isocell, will be used in an 8MP sensor set to be mass-produced in Q4.
- Isocell could make Samsung a tougher competitor to OmniVision (OVTI +0.9%). However, Samsung's rivals might not be crazy about depending on the company for their image sensor needs.
Sep. 23, 2013, 12:02 PM
- A Chipworks iPhone 5S teardown found a Bosch accelerometer and an STMicroelectroncs (STM -0.3%) gyroscope inside Apple's latest flagship, but no InvenSense (INVN -5.7%) parts.
- Meanwhile, Maxim, which on Friday joined Barclays in suggesting InvenSense failed to get a 5S design win, is now reporting InvenSense won't be designed into the 5th-gen iPad either. However, the firm is reiterating a Buy, arguing strong Samsung demand should bolster InvenSense's top line.
- OmniVision (OVTI -1%) is also ticking lower (to a lesser extent), even as many Apple suppliers shoot higher in response to the company's weekend iPhone sales data. The first 5S teardowns have uncovered Sony image sensors, but Apple has a history of using a dual-supplier strategy for iPhone image sensor procurement.
Sep. 20, 2013, 9:24 AM
- On cue, iFixit has posted an iPhone 5S teardown shortly after Apple's latest flagship device went on sale.
- Though no motion sensor supplier is named, Barclays says its initial analysis suggests STMicroelectronics (STM) held onto the gyroscope slot, albeit while adding the evidence isn't conclusive. InvenSense (INVN), expected by many to take the slot, is down 4.3% premarket.
- Parts that are mentioned include a Broadcom (BRCM) Wi-Fi/Bluetooth combo chip and touchscreen controller, a Sony (SNE) rear image sensor (in the past, Apple has used a dual-supplier strategy featuring Sony and OVTI), a Qualcomm (QCOM) baseband modem, RF transceiver, and power management IC, a TriQuint (TQNT) power amplifier module, and two amplifier modules apiece from Skyworks (SWKS) and Avago (AVGO).
- Though the combo chip win was widely expected, Broadcom investors appear relieved about the touchscreen controller win, given rumors Renesas had taken the slot. BRCM +2.4% premarket. TQNT +1.8%.
Sep. 4, 2013, 6:28 PM
- IDC's forecast represents only a slight slowdown in growth from the 44% rate it believes was seen in 2012, and is easily more optimistic than most forecasts made earlier this year. Back in January, Strategy Analytics predicted smartphone shipments would rise only 27% this year to 875M.
- Thanks to strong smartphone demand, IDC now expects total mobile phone shipments to rise 7.3% this year to 1.8B, after declining 1.2% last year.
- Android (GOOG) is expected to claim 75.3% of 2013 shipments; its Q2 share was pegged at 79.3%. The iPhone, aided by an upcoming refresh, is expected to have a 16.9% 2013 share vs. 13.2% in Q2.
- Chipmakers with strong mobile exposure: QCOM, BRCM, SWKS, TQNT, ANAD, RFMD, SYNA, CRUS, MXIM, HIMX, OVTI, AUDC.
Aug. 30, 2013, 12:45 PM
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