Mon, Aug. 24, 5:36 PM
Tue, Aug. 18, 11:09 AM
- A day after Pac Crest upgraded Silicon Motion (NASDAQ:SIMO) to Overweight, BofA/Merrill has issued a 2-notch downgrade to Underperform. BofA has issued a similar downgrade for NAND flash giant SanDisk.
- As with the SanDisk downgrade, BofA cites rising memory industry capex, and related fears of industry oversupply/weak pricing. A higher-than-expected FY16 capex budget from Micron is cited, as are remarks from major SIMO client SK Hynix about possibly spending $39B on new fabs.
- Of note: Outside of its Shannon Systems Chinese flash storage unit, SIMO is a NAND controller chip supplier, rather than a seller of NAND itself. In theory at least, the company shouldn't be hurt badly by NAND price swings, provided end-market consumption is healthy.
Mon, Aug. 17, 1:00 PM
- Pac Crest's Monika Garg, upgrading Silicon Motion (NASDAQ:SIMO) to Overweight and setting a $32 target: "After our Vail [technology] conference and the Flash Summit, we are bullish on Silicon Motion’s growth opportunities in client SSDs. The stock is down 38% over the last couple of months on weak demand in China, but increasing penetration of client SSDs and larger market share should benefit SIMO."
- She also thinks recently-acquired Shannon Systems could fare well selling to Chinese firms looking to buy local. Garg's target is equal to 11x her 2016 EPS estimate, after backing out $6/share in net cash.
- Previously: Silicon Motion's Q3 guidance cautious, full-year guidance stronger
Wed, Jul. 22, 11:11 AM
- The Philadelphia Semi Index (SOXX -3.2%) has fallen to its lowest levels since February after Apple, ARM, and Linear Technology posted their calendar Q2 reports yesterday afternoon.
- Apple (down 4.8%) beat estimates, but offered soft guidance and reported slightly below-consensus iPhone sales. ARM (down 3.8%) reported roughly in-line Q2 results and a 26% Y/Y increase in ARM-based chip shipments, while stating it expects 2015 results to be in-line with expectations.
- Linear (down 7.8%) missed FQ4 estimates and provided weak FQ1 guidance. Notably, the analog/mixed-signal chipmaker added it saw bookings slow "considerably" towards the end of Q2, with industrial and PC demand particularly weak. Bookings have improved in July, but Linear is still "preparing for a difficult [Q3]." The company expresses optimism the downturn will be short.
- Apple suppliers are seeing big losses (previous). As are Linear peers Texas Instruments (TXN -3.7%), ON Semi (ON -5.1%), Maxim (MXIM -3.5%), IDT (IDTI -6.5%, Apple Watch supplier), InPhi (IPHI -4%), Exar (EXAR -4.2%), and Analog Devices (downgraded by Drexel Hamilton).
- Other decliners include Micron (MU -4.2%, also an Apple supplier), Synaptics (SYNA -6.4%, ditto), STMicroelectronics (STM -6.2%, downgraded by Citi), Freescale (FSL -4.8%, following merger partner/Apple supplier NXP lower), Microchip (MCHP -4.6%), Cypress (CY -4.3%), Lattice (LSCC -3.9%), and Silicon Motion (SIMO -4.4%).
- Qualcomm, TI, Cirrus Logic, SanDisk, and Xilinx report this afternoon.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, Jul. 8, 11:37 AM
- Chip stocks are underperforming as the Nasdaq registers a 1.2% decline. The Philadelphia Semi Index (SOXX -2.6%) is now down 13% from a June 1 peak of $101.80, and 4% YTD; it's still up 87% from a Nov. 2012 low of $47.58.
- Plunging Chinese equity markets could be weighing on the group. With retail Chinese investors having set up brokerage accounts en masse over the last year, there are plenty of concerns about the reverse wealth effect of a crash. The Economist reccently downplayed those worries, noting a relatively modest 15% of Chinese household assets are invested in stocks.
- Major decliners among chip developers include Skyworks (SWKS -4.9%), Qorvo (QRVO -5.6%), InvenSense (INVN -5.6%), NXP (NXPI -4.7%), Freescale (FSL -4%), MoSys (MOSY -9.4%), AppliedMicro (AMCC -5.1%), Cavium (CAVM -3.8%), and Silicon Motion (SIMO -6.4%). SIMO also fell yesterday after favorably adjusting its Q2 sales guidance. Skyworks and Qorvo sold off yesterday morning before rebounding in afternoon trading.
- Other names tied to the industry that are seeing heavy selling pressure include ARM (ARMH -4%), TowerJazz (TSEM -5.1%), UMC (UMC -4.4%), Veeco (VECO -4.3%), and Axcelis (ACLS -4.6%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Tue, Jul. 7, 12:01 PM
- Silicon Motion (NASDAQ:SIMO) has sold off after pre-announcing it now expects 7%-9% Q/Q Q2 sales growth vs. prior guidance of 5%-10%. 793K shares have been traded, topping a 3-month daily average of 659K.
- The selloff comes amid a 1.2% drop for the Nasdaq, and a 2.2% drop for the Philadelphia Semi Index. Shares now go for 13x a 2016 EPS consensus of $2.36.
Fri, Jun. 26, 2:48 PM
- Chip stocks are seeing outsized losses (SOXX -2.6%) amid a 0.8% drop for the Nasdaq following DRAM/NAND flash giant Micron's FQ3 miss and weak FQ4 guidance - the numbers were blamed on a mixture of soft PC demand, associated DRAM price pressure, and a manufacturing process transition. Some analysts have argued Micron's issues are at least partly company-specific and/or that PC and DRAM demand will improve in 2H15.
- The Philadelphia Semi Index is now down 7% from a June 1 peak of $101.80. It's still up 2% YTD, and (thanks partly to an industry M&A wave) roughly 2x from its fall 2012 lows.
- In addition to PC-exposed Intel and AMD, chip stocks sporting large declines include Qorvo (QRVO -4.9%), Sigma Designs (SIGM -5.7%), MoSys (MOSY -7.9%), Anadigics (ANAD -10.8%), Silicon Motion (SIMO -6.5%), Inphi (IPHI -5.3%), PMC-Sierra (PMCS -3.8%), ON Semi (ON -4.2%), AppliedMicro (AMCC -3.7%), and Vimicro (VIMC -5.3%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, May 27, 3:00 PM
- Chip stocks are posting outsized gains (SOXX +4%) amid a 1.3% increase for the Nasdaq after the WSJ reported Avago and Broadcom are in advanced merger talks, sparking hopes for further M&A.
- A Broadcom/Avago deal would be worth ~$67B at current valuations, easily making it the largest in the chip industry's breathless consolidation wave. It would also touch markets ranging from smartphones to set-tops to servers to switches/routers.
- Notable gainers include Avago RF chip peers Skyworks (SWKS +4.3%), Qorvo (QRVO +3.2%), and Anadigics (ANAD +4.9%). Others include Micron (MU +3.8%), SanDisk (SNDK +4.3%), NXP (NXPI +3.5%), Silicon Motion (SIMO +8.3%), Cirrus Logic (CRUS +4.8%), STMicroelectronics, (STM +3.4%), Synaptics (SYNA +3.4%), Atmel (ATML +2.8%), Cavium (CAVM +4.5%), Intersil (ISIL +4.6%), Semtech (SMTC +3.9%), ON Semi (ON +3.8%), Microsemi (MSCC +4.4%), and IDT (IDTI +4.2%).
- Non-chipmakers tied to the industry are also doing well. Standouts include ARM (ARMH +4.4%), Amkor (AMKR +4.6%), ASML (ASML +3.1%), and Rambus (RMBS +3.3%).
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mon, May 18, 2:10 PM
- Many chip stocks are turning in healthy gains amid a 0.7% gain for the Nasdaq after the NY Post reported Altera (up 6.2%) has resumed buyout talks with Intel.
- Also possibly helping: China's big-3 carriers have announced major data tariff cuts. Brean has argued the cuts are a positive for RF chipmakers Skyworks (SWKS +5.7%), Qorvo (QRVO +4.2%), and Avago (AVGO +1.9%); the companies benefit from rising 4G phone sales.
- Aside from the aforementioned companies, today's gainers include Synaptics (SYNA +4.8%), Himax (HIMX +2.3%), and Silicon Motion (SIMO +2.3%), each of whom also has Chinese mobile exposure. Other winners include Atmel (ATML +3.7%), Microsemi (MSCC +2.6%), InPhi (IPHI +2%), Intersil (ISIL +2.5%), Silicon Labs (SLAB +2.5%), IDT (IDTI +2.3%), and MaxLinear (MXL +3.5%).
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Apr. 30, 3:35 PM
- With the Nasdaq down 1.8% amid an earnings season market selloff, major decliners are easily outnumbering major gainers.
- Notable decliners include action camera leader GoPro (GPRO -5.4%), privileged account protection software vendor CyberArk (CYBR -5.2%), ultracapacitor maker Maxwell (MXWL -5.1%), storage hardware vendor Quantum (QTM -5%), NAND flash controller/4G transceiver maker Silicon Motion (SIMO -5.6%), online video ad platform Tremor Video (TRMR -7%), and specialty foundry TowerJazz (TSEM -6.2%).
- GoPro is returning a chunk of yesterday's big post-earnings gains. Maxwell is down 20% since posting a Q1 miss and soft Q2 guidance a week ago. Silicon Motion, which initially rallied post-earnings, is now down 4% from where it traded before providing decent guidance to go with Q1 results that were in-line with a pre-announcement.
- Previously covered: Baidu, Yelp, Nokia, STMicroelectronics, Flextronics, Calix, MicroVision, Stratasys, Knowles/Audience, QuickLogic, WiLAN
- Notable gainers: Glu Mobile, ClickSoftware, OmniVision, AVG, Cypress, Neustar
Mon, Apr. 27, 7:03 PM
- Silicon Motion (NASDAQ:SIMO) expects Q2 revenue to be up 5%-10% Q/Q. That implies a range of $84.6M-$88.7M vs. an $85.7M consensus. Full-year revenue is expected to be up 17%-25% Y/Y; consensus is for 22.5% growth.
- Though officially beating consensus, Q1 revenue of $80.6M matched guidance (provided in SIMO's April 8 pre-announcement) for sales to be roughly flat from a Q4 level of $80.5M.
- SIMO: "Our first quarter revenue benefited from strong client SATA 3 SSD controller sales momentum and stable eMMC controller sales. Client SSD controller sales doubled sequentially ... we expect a new major SSD program with our controllers, again for both channel and OEM markets, to begin shipping in the second quarter. Our storage OEM partner began shipping SSDs to three global tier-1 PC OEMs in the first quarter and recently started shipping to two additional OEMs."
- Mobile storage (flash controller) sales rose 41% Y/Y to $63.6M. Mobile communications (4G transceiver and TV IC) sales rose 176% to $15.2M. Gross margin (non-GAAP) was 52% vs. 52.5% in Q4 and 48.6% a year ago. Op. margin was 24.1% vs. 26% in Q4 and 16.7% a year ago. Q2 GM guidance is at 50%-52%; full-year GM guidance is still at 49.5%-51.5%.
- Shares have risen to $31.70 AH. They fell hard on Friday after SIMO announced it's buying Chinese SSD/storage array vendor Shannon Systems and (perhaps more importantly) Northland Securities reported SK Hynix is planning to launch its own UFS 2.0 flash controllers.
Fri, Apr. 24, 5:37 PM
Fri, Apr. 24, 11:37 AM
- Possibly weighing on Silicon Motion (SIMO -7.1%) today: Northland Securities observes memory giant SK Hynix (OTC:HXSCF - reported earnings on Wednesday) plans to launch its own NAND controllers for the new/high-speed UFS 2.0 standard in late 2015 or early 2016
- Northland expects UFS 2.0 (used in Samsung's Galaxy S6 and expected to go into Xiaomi's next-gen flagship) to gain share against the widely-used eMMC standard on the high-end, and thinks Hynix's controllers "will likely impact SIMO's share" at the company. It notes Hynix accounts for ~90% of SIMO's eMMC controller business, or ~35% of total revenue.
- SIMO is working on its own UFS 2.0 controllers, which are expected to ship late this year or early next. Northland: "I do not believe that all of the eMMC business is at risk, but this will not be received well by the Street. SIMO will have this as a headwind until they can show that they will not lose significant share at SK Hynix."
- Earlier: SIMO buying Chinese SSD/storage vendor
Fri, Apr. 24, 9:51 AM
- Silicon Motion (NASDAQ:SIMO) is buying Shannon Systems, a Chinese provider of PCIe flash modules/SSDs and storage arrays, for $57.5M in cash, stock, and earn-out payments. The deal is expected to close by the end of July.
- The purchase represents an attempt to move downmarket by SIMO, currently a major NAND flash controller supplier for SSDs and embedded flash modules. The deal could occasionally put the company into competition with some of its NAND controller clients. However, Shannon's sales efforts have been focused specifically on the Chinese market.
- SIMO asserts Shannon's customers include leading Chinese Internet companies, and notes it was co-founded by Marvell's SSD controller architect. The company is expected to grow sales to $14M-$18M in 2015; SIMO expects the acquisition to be slightly accretive in 2H15 EPS and "more accretive" in 2016.
- Shares have sold off following the announcement, which comes ahead of SIMO's April 27 Q1 report.
Thu, Apr. 16, 3:19 PM
- Today's notable tech gainers include Chinese online gaming/entertainment platform YY (YY +4.5%), Chinese search engine/portal owner Sohu (SOHU +5.4%), U.S. solar installer Vivint (VSLR +4.9%), U.S. solar installer Vivint (VSLR +4.9%), solar power optimizer/inverter maker SolarEdge (SEDG +5%), M2M hardware/software provider I.D. Systems (IDSY +8.9%), DSP core IP provider Ceva (CEVA +7.2%), cloud healthcare software provider Castlight (CSLT +6.1%), and NAND controller/4G transceiver vendor Silicon Motion (SIMO +4.8%). The Nasdaq is nearly flat.
- Notable decliners include local services marketplace Angie's List (ANGI -6.6%), IP licensing firm Acacia (ACTG -4.4%), and gaming system maker IGT (IGT -5.1%).
- Dougherty has launched coverage on I.D. Systems at Buy, and Canaccord has done the same for Ceva. Vivint is one of several solar firms to get an Outperform rating from Avondale Partners. Silicon Motion has surged to fresh 52-week highs, and is up 22% since last week's Q1 pre-announcement.
- Angie's List is giving back some of the big gains seen yesterday after announcing long-time CEO Bill Oesterle plans to retire, and slightly hiking its 2015 adjusted EBITDA guidance. IGT is returning a chunk of the gains seen last week following the closing of the Gtech merger.
- Previously covered: Etsy, AMD, Fairchild, SanDisk, 58.com, Audience, Travelzoo, Sequans, Carbonite, Identiv
Thu, Apr. 9, 1:18 PM
- Silicon Motion's (NASDAQ:SIMO) Wednesday Q1 revenue/gross margin pre-announcement suggests "a few pennies" of upside to B. Riley's $0.40 EPS estimate for the quarter, the firm writes in a bullish note today. Before the announcement, the consensus was at $0.42 (it's now at $0.44).
- B. Riley adds it's "particularly enthused" by SIMO's margin forecast, which suggests momentum for the company's high-margin embedded NAND/SSD controller business remains strong in 2015. NAND flash giant SanDisk issued a Q1/2015 warning on March 26; many think company-specific factors are playing a role.
- SIMO has rallied to new highs, and is now up 16% since the pre-announcement.
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