Thu, Mar. 26, 10:50 AM
- The Philadelphia Semi Index (SOXX -1.8%) is now down 6% over the last two days. Today's losses come after NAND flash giant SanDisk issued a Q1 warning and withdrew its full-year guidance - price pressure, soft enterprise sales, and delayed product qualifications were all blamed.
- Meanwhile, some are partly blaming yesterday's big selloff on cautious remarks from TSMC (has an estimated ~50% global foundry share) at a Credit Suisse conference. CS analyst Randy Abrams reports TSMC (NYSE:TSM) has observed "a slowdown in the past 4-5 weeks due to US$ strength impacting European and emerging market purchasing power," and that inventories "will be a few days above seasonal exiting 1Q15." Pac Crest downgraded TSMC two weeks ago on inventory concerns.
- Following an Asian trip, Susquehanna's Chris Caso has argued there isn't too much to be alarmed about, though he admits forex could be an issue. "There’s mixed signals here and there. We weren’t picking up anything that was tremendously different across the supply chain. PCs were the weakest area. That’s really not a surprise."
- RF chipmakers Skyworks (SWKS -4.6%) and Qorvo (QRVO -2.1%), among 2014's best performers, are again selling off; peer Avago is off only slightly. Also seeing further profit-taking are Ambarella (AMBA -3%), NXP (NXPI -3.6%), Freescale (FSL -2.8%), Cavium (CAVM -3.2%), and STMicroelectronics (STM -4.5%).
- Among equipment makers, Axcelis (ACLS -2.9%), Aixtron (AIXG -3.6%), Veeco (VECO -3%), and Kulicke & Soffa (KLIC -2.5%) are declining. A selloff in European equities could be affecting Aixtron, NXP/Freescale, and STMicro.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Update: Credit Suisse, Goldman, and Deutsche have each offered thoughts on the chip selloff.
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
Mon, Mar. 16, 9:25 AM
- DA Davidson has upgraded Qorvo (NASDAQ:QRVO) to Buy, and hiked its target by $30 to $100.
- The RF chipmaker's shares have risen to $74.40 premarket; the post-merger high is $78.05. Qorvo trades for 15.6x an FY16 (ends March '16) EPS consensus of $4.78.
Wed, Feb. 25, 6:19 PM
- In addition to beating FQ1 EPS estimates (while posting in-line revenue), Avago (NASDAQ:AVGO) is guiding for FQ2 revenue to be down 3% to up 1% Q/Q. That implies a range of $1.59B-$1.65B, above a $1.54B consensus.
- Driving the FQ1 EPS beat: Gross margin was 59%, up from FQ4's 58% and the year-ago period's 52%, and above guidance of 57.5% (+/- 1%). FQ2 GM guidance is at 58.5% (+/- 1%).
- Also helping EPS: Operating expenses totaled $293M, up from $142M a year ago thanks to acquisitions, but down from $303M in FQ4 thanks to cost cuts.
- As expected, strong iPhone-related sales acted as a big FQ1 tailwind: Wireless product sales (40% of total revenue) rose 6% Q/Q and 90% Y/Y. Wired infrastructure (21% of total revenue, boosted by the PLX and LSI acquisitions) fell 1% Q/Q and rose 52% Y/Y. Enterprise storage (29% of revenue, a product of the LSI acquisition) rose 5% Q/Q. Industrial/other (10% of revenue) fell 4% Q/Q and rose 21% Y/Y.
- Avago has risen to $119.03 AH, making new highs in the process. RF component rivals are ticking higher: Skyworks (NASDAQ:SWKS) +0.9% to $88.49. Qorvo (NASDAQ:QRVO) +1.1% to $67.92.
- Avago's FQ1 results, Emulex acquisition, PR
Thu, Feb. 5, 6:11 PM
- Qorvo's (NASDAQ:QRVO) buyback is good for repurchasing nearly 2% of outstanding shares at current levels. The RF chipmaker says its main goal for the program is to "reduce dilution from issuances relating to employee equity awards and the Company's employee stock purchase program."
- Qorvo had $291M in cash/investments as of Dec. 27, and no debt. Shares are up fractionally in AH trading.
Mon, Feb. 2, 1:20 PM
- Following today's steep decline, Qorvo (QRVO -6.3%) is down 8% since beating FQ3 estimates and issuing healthy FQ4 guidance last Wednesday (amid high expectations). 1.5M shares have been traded; the daily average since Qorvo began trading as a post-merger entity last month is 2M.
- Northland Securities upgraded the RF chipmaker to Outperform on Thursday. Shares go for 15x estimated FY16 (ends March '16) EPS. The FY16 revenue growth consensus is at 13.8%.
Wed, Jan. 28, 5:35 PM
Wed, Jan. 28, 5:13 PM
- In its first quarter as a merged company (FQ4), Qorvo (NASDAQ:QRVO) expects revenue of $615M-$625M and EPS of $0.80-$0.90 vs. a consensus of $619M and $0.82. Expectations were high going in, following strong numbers from peers and major client Apple.
- Total FQ3 revenue was $742M - $397.1M from RF Micro, $344.9M from TriQuint - beating a consensus of $723.4M. EPS of $1.46 topped a $1.16 consensus.
- RF Micro had an FQ3 gross margin of 49.3%, up from 48% in FQ2 and 39.7% a year earlier. TriQuint had a gross margin of 48.8%, up from 46.6% in FQ2 and 37.2% a year ago. The combined company expects a GM of 46%-48% in seasonally weak FQ4, and a tax rate of just 5%-10%.
- FQ3 results, PR
Wed, Jan. 28, 4:09 PM
Tue, Jan. 27, 6:01 PM
- Apple suppliers Cirrus Logic (NASDAQ:CRUS), NXP (NASDAQ:NXPI), Skyworks (NASDAQ:SWKS), Qorvo (NASDAQ:QRVO), and Avago (NASDAQ:AVGO) are up AH after the tech giant blew away FQ1 estimates on the back of 74.5M iPhone sales (+46% Y/Y and above forecasts of ~66-67M). iPad sales of 21.4M (-18%) were roughly in-line
- CRUS +2.9% to $26.79. NXPI +1.5% to $79.20. SWKS +1.3% to $82.60. QRVO +1% to $74.48. AVGO +2.7% to $107.60.
- Cirrus and Qorvo report tomorrow, and NXP on Feb. 4. Skyworks posted an FQ1 beat and offered strong guidance last week.
Fri, Jan. 23, 1:03 PM
- After barely moving in AH trading yesterday in response to its FQ1 beat and strong FQ2 guidance, Skyworks (SWKS +2.3%) has risen above $81 today as a flurry of bullish analyst reactions arrive. Rivals/fellow iPhone suppliers Qorvo (QRVO +4.8%) and Avago (AVGO +1.6%) are heading in the same direction.
- Brean's Mike Burton, hiking his Skyworks target by $22 to $92: "The [FQ1] upside was predominantly driven by the Integrated Solutions segment as Apple's iPhone 6/6+ ramped ... we believe LTE growth in China and several new model ramps (Samsung Galaxy S6 amongst others to be unveiled in Barcelona) coupled with Skyworks Solutions less seasonal Broad Markets business is driving the better-than-seasonal guidance."
- Burton also thinks Skyworks is on its way to achieving a 50% gross margin (up from FQ1's 46.7%), and notes inventory days (58) were down by 15 Y/Y.
- Canaccord's Mike Walkley: "We believe Skyworks' diverse analog portfolio is enabling content share gains with its smartphone customers. Further, we anticipate Skyworks' share gains in markets such as WiFi 802.11ac, wireless infrastructure, and the IoT market are also driving strong growth trends." His FY16 (ends Sep. '16) EPS estimate has been hiked by $0.66 to $5.89.
- On the CC (transcript), CEO David Aldrich noted Skyworks' non-mobile design wins include a GM telematics platform, Cisco home gateways, ZigBee connectivity modules for Philips/LG smart light bulbs, Amazon's Echo and Fire TV devices, and a DirecTV set-top. China's Xiaomi has joined Apple and Samsung as a major mobile client.
- Qorvo reports on Jan. 28.
Tue, Jan. 13, 1:04 PM
- Believing "strong dynamics for the RF industry will continue in 2015," BMO's Tim Long has upgraded Skyworks (SWKS +2.5%) and newly-merged Qorvo (QRVO +0.4%) to Outperform, while respectively assigning $85 and $80 targets. His FY15 EPS estimates are at $4.59 and $3.57.
- Long's expected catalysts: 1) The iPhone 6S could feature a "bump in RF content" relative to the iPhone 6. 2) Samsung "may start to increase RF content in some of its higher-end models as management looks to reduce the number of phones in its portfolio." 3) China Unicom/Telecom could "implement higher RF content in five-mode LTE phones during the 4G push this year, similar to what happened at China Mobile in 2014."
- Skyworks is rallying, while Qorvo is up modestly after previously posting bigger gains. Oppenheimer and Northland have launched coverage on Qorvo with neutral ratings the latest in a line of sell-side firms to restart coverage following the RF Micro/TriQuint merger.
- Previously: Rosenblatt sees Skyworks benefiting from Chinese 4G demand
Tue, Jan. 6, 1:36 PM
- Up 30% in 2014, the Philadelphia Semi Index (SOXX -2.2%) has fallen over 4% thus far in 2015. Today's decline comes as the Nasdaq drops 1.6%.
- Many names are posting 3%+ losses. SWKS -4.2%. QRVO -5.8%. AMAT -3.4%. KLAC -3.1%. SYNA -5.4%. IPHI -9%. ARMH -5.4%. SIMO -4.5%. MCRL -3.9%. AMCC -3.9%. CODE -5.1%. CY -4.6%. QUIK -7.9%.
- This morning, Gartner estimated global chip sales rose 7.9% in 2014 to $339.8B, a little less than the 9.4% recently estimated by IHS. Sell-side firms have forecast industry growth will fall to the ~5% range in 2015.
- Gartner thinks memory sales rose 16.9%, fueled by a 31.7% increase in DRAM sales. All other chip markets rose by 5.4%, a marked improvement from 2013's 0.8%. Intel (15% share) and Samsung (10.4%) claimed over a quarter of industry sales between them. Qualcomm (5.6%), Micron (4.9%), and SK Hynix (4.7%) rounded out the top-5.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Fri, Jan. 2, 9:47 AM
- As of today, RF Micro and TriQuint no longer exist as independent companies. Qorvo (NASDAQ:QRVO), the post-merger entity, is currently trading above $68 on the Nasdaq.
- Last month, SA Pro author Helix Investment Research argued in favor of holding onto Qorvo, in spite of RF Micro and TriQuint's huge 2014 gains. Helix cited strong post-merger synergies/expected margin expansion, a healthy balance sheet, and ongoing industry growth thanks to the higher RF content of 4G devices.
Dec. 29, 2014, 8:05 AM
- Needham Quinn Bolton is turning more cautious on chip stocks following a blistering 2014: Skyworks (NASDAQ:SWKS), RF Micro (NASDAQ:RFMD), TriQuint (NASDAQ:TQNT), Cavium (NASDAQ:CAVM), M/A-COM (NASDAQ:MTSI), and MaxLinear (NYSE:MXL) have been downgraded to Hold, and Ambarella (NASDAQ:AMBA) downgraded to Underperform.
- Bolton often cites valuation. Regarding Skyworks, he notes shares are "up 161% YTD in 2014, vs. 30.3% for the SOX Index and 15.1% for the NASDAQ Composite, and trading above [Needham's] prior price target of $70, or 14x our CY16E non-GAAP EPS estimate."
- Likewise, Bolton notes RF Micro and TriQuint, who will be jointly known as Qorvo starting on Jan. 1, have exceeded his respective targets of $16.50 and $27.50 (12x 2016E EPS), and would prefer to see if a buying opportunity emerges in 1H15. Cavium is trading above Needham's $58 target (based on a DCF valuation model).
- Regarding Ambarella, he cites not only valuation, but also a belief the video processor vendor could underperform in 2015 due to slowing revenue growth, gross margin pressure, and price pressure from top customer GoPro. "A more challenging cable outlook and a push-out in the ramp of its satellite gateway and ODU opportunities" are cited as reasons for downgrading MaxLinear.
- SWKS -1.2% premarket. RFMD -1.1%. TQNT -1.9%. AMBA -3.5%.
- Last Friday: Chip industry growth expected to slow following strong 2014
- Bullish opinions: Brean, Rosenblatt
Dec. 22, 2014, 4:58 PM
- Brean's Mike Burton left a talk with RF Micro (NASDAQ:RFMD) IR chief Doug Delieto believing "some of the recent investor concerns about a ‘coming deterioration in pricing and/or margins’ looks like ‘healthy paranoia’ (we share the feeling, but it doesn’t look likely).”
- Meanwhile, CFO William Priddy stated he believes Qorvo, as RF Micro and TriQuint (NASDAQ:TQNT) will be known post-merger, can hold its margins steady in calendar Q1 even if revenue falls 10%-15% Q/Q due to seasonality. He adds
- Burton adds TriQuint "continues to see tightness" in the BAW and TC SAW filter markets, and that "conversations with other supply chain management and investor reps lead us to believe that, for those that are exposed to Apple, this quarter is playing out as well or better than was expected." Avago's recent numbers point in the same direction.
- Rising Chinese 4G phone sales are also viewed as a tailwind, given the higher RF content of 4G devices relative to 3G counterparts. Fast-growing Xiaomi was TriQuint's 2nd-biggest BAW filter customer last quarter.
- RF Micro rose 3.5% in regular trading, and TriQuint rose 3.6%. The Philadelphia Semi Index was up 1.2%.
QRVO vs. ETF Alternatives
Qorvo Inc is a provider of technologies and RF solutions for mobile, infrastructure and aerospace/defense applications. Its products include amplifiers, frequency duplexers, modules and among others.
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