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Market Vectors Semiconductor ETF (SMH)

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  • May 22, 2014, 9:28 AM
    • Microchip (MCHP) is paying NT$143/share ($4.74/share) in cash to acquire all outstanding ISSC shares on Taiwan's GreTai Securities Market. The deal has an equity value of $328.5M, and an enterprise value (excludes net cash) of $294.3M. It's expected to close later in 2014.
    • ISSC had 2013 revenue of $69.2M, and an op. margin of 18.9% The company's Bluetooth ICs for headsets, PC peripherals, car stereos, speakers, and game controllers, among other products.
    • Microchip, which sells microcontrollers and other products into many of ISSC's markets, expects the deal to be immediately accretive. The company no doubt hopes to tap a growing market for embedded/wearable Bluetooth-enabled devices.
    • Is a semi consolidation wave underway? The deal is the latest in a string of industry mergers/acquisitions that includes Avago/LSI and RF Micro/TriQuint. RBC recently cited the industry's transition into "a more mature era" as a reason for becoming bullish on it.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | May 22, 2014, 9:28 AM | Comment!
  • May 19, 2014, 10:26 AM
    • In a bullish call on chip stocks, RBC's Doug Freedman has upgraded Nvidia (NVDA +2.9%), Broadcom (BRCM +1.8%), Micron (MU +3.3%), Texas Instruments (TXN +1.3%), and Altera (ALTR +1.8%) to Outperform.
    • Freedman sees the industry's free cash flow profile improving as it transitions "into a more mature era," and companies embrace more "shareholder-friendly capital-allocation strategies."
    • Nvidia, TI, and Altera have already announced major cash-return efforts in recent years. TI has promised to return all of its FCF to shareholders, save for funds needed to pay down debt.
    • Micron (just digested Elpida) and Broadcom have been more cautious, though the latter did hike its dividend in January.
    • Freedman downgraded Micron on Jan. 3, when shares were at $21.66. He was bullish during the company's big 2012/2013 rally.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | May 19, 2014, 10:26 AM | 1 Comment
  • Apr. 16, 2014, 1:47 PM
    • Though the Nasdaq is up 0.7%, many chip stocks are heading in the opposite direction (SOXX -0.6%) after Intel provided mixed Q1 top-line numbers for its business units - server chip sales were healthy, mobile sales were weak, and PC sales were in between - ASML lowered its 1H14 sales outlook and provided cautious 2H remarks (has dinged many chip equipment stocks), and Linear offered somewhat soft March quarter guidance.
    • Notable decliners: CRUS -3.3%. ENTR -3.3%. QUIK -2.4%CAVM -2%. PSMI -3.6%. ADI -2.3%. TXN -1.4%. MXIM -1.5%. FCS -1.5%. The last four companies all compete against Linear.
    • Himax (HIMX -1.5%) is off after Chardan Capital lowered its PT to $9 from $12; the firm downgraded Himax in January. Shares tumbled on Monday, then ticked higher on Tuesday following a Q1 pre-announcement.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Apr. 16, 2014, 1:47 PM | Comment!
  • Apr. 15, 2014, 1:49 PM
    • While broader equity markets are only seeing modest declines, tech stocks aren't so lucky. The Nasdaq-100 (QQQ -0.8%) had its lowest print since October this morning before recovering slightly.
    • Chinese tech stocks (KWEB -4.3%), including 2013 solar high-flyers (TAN -4.2%), are especially hard-hit following a Shanghai selloff triggered by PBOC withdrawals. Other Internet (PNQI -2.3%) and social media (SOCL -2%) stocks aren't faring much better.
    • Will earnings season come to the rescue? Intel and Yahoo report after the bell today, and Google and IBM after the bell tomorrow.
    • Tech ETFs: XLK, VGT, FDN, ROBO, SOXL, SKYY, TECL, USD, SMH, IPK, IYW, ROM, TDIV, SOXS, SOXX, KWT, TECS, XSD, IXN, IGV, FTEC, RYT, IGM, PXN, QTEC, PSCT, FXL, IGN, PSI, SSG, MTK, REW, PXQ, XSW, FONE, PSJ, AAIT, PTF, CQQQ, QQQC
    • Update: Tech stocks rallied in the final hours of trading. The Nasdaq closed up 0.3%.
    | Apr. 15, 2014, 1:49 PM | 1 Comment
  • Feb. 26, 2014, 11:24 AM
    • Chip stocks are outperforming (SOXX +1.1%) after Avago (AVGO +5.1%) posted an FQ1 beat and strong margin numbers (albeit while guiding light, as many expected), and STMicroelectronics (STM +3.9%) exec Paul Grimme states his company's European sales are stabilizing, with Germany leading the way.
    • Notable winners: AMBA +5.4%. AMCC +5.2%. CRUS +3.3%. SWKS +3%. QUIK +4.1%. INVN +2.7%. RFMD +3.5%. TQNT +3%. SIMO +2.7%. CAVM +3.6%. Nearly all of the aforementioned names have strong mobile and/or telecom equipment exposure.
    • RBC has hiked its Avago PT to $66 from $64, and says the chipmaker remains its "top play on China and global LTE deployments." With LSI in tow, the firm thinks FY15 (ends Oct. '15) EPS will top $5.
    • Morgan Stanley ($68 PT) is confident Avago can raise LSI's op. margin to 30% from 17% over the next few years, much as the company has doubled its own op. margin to 30% post-LBO.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Feb. 26, 2014, 11:24 AM | Comment!
  • Jan. 14, 2014, 5:42 PM
    • PC industry names outperformed amid a broader tech rally, aided by a JPMorgan Intel (INTC +4%) note that argued PC demand is stabilizing, and tablet cannibalization diminishing. A number of chip stocks also rallied strongly (SOXX +2.1%).
    • Also: Major hard drive suspension assembly maker Hutchinson has reported above-consensus Dec. quarter sales, while citing strong demand for 2.5" notebook drive assemblies. Seagate and Western Digital both rallied.
    • JPMorgan's Christopher Danely, who upgraded Intel to Overweight, has raised his 2014 estimates soundly above consensus ahead of the chip giant's Thursday Q4 report. Danely notes Intel, Microsoft, H-P, and others have said PC demand is improving, and that Taiwan's big-4 notebook contract manufacturers collectively grew their shipments 7% Q/Q in Q4. Q1 shipments are expected to drop in-line with seasonality.
    • He also points out tablet shipment growth is decelerating, and forecasts shipments will only rise 25% in 2014 (down from 53% in 2013).
    • Danely's optimism contrasts with another bearish Intel note from Bernstein's Stacy Rasgon, who estimates five mobile CPU sales are needed to make up for one PC CPU sale, and doubts Intel's foundry business will move the needle.
    • PC industry gainers: MSFT +2.3%. HPQ +2.6%. AMD +4.1%. NVDA +3.1%.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Previous: Goldman on Intel's Q4, Gartner/IDC's Q4 PC estimates, Intel's light 2014 guidance
    | Jan. 14, 2014, 5:42 PM | 14 Comments
  • 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. 17, 2013, 2:57 PM | Comment!
  • Dec. 12, 2013, 2:58 PM
    • TSMC (TSM -1.8%), estimated to have ~50% of the global chip foundry services market, thinks the market's growth will slow to 9% in 2014 from 11% in 2013. At the same time, the company thinks total chip industry growth will increase to 5% from 2013's 4%. Trade association WSTS has forecast 4.4% 2013 growth and 4.1% 2014 growth.
    • Foundries have been steadily growing their share of chip industry output for years, as the exorbitant cost of building new fabs leads more and more chipmakers to outsource manufacturing. But with dozens of major chipmakers already fully relying on foundries, the market could be hard-pressed to significantly outpace broader industry growth going forward.
    • Other foundries: UMC, SMI, TSEM
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Dec. 12, 2013, 2:58 PM | Comment!
  • Oct. 23, 2013, 10:19 AM
    | Oct. 23, 2013, 10:19 AM | 12 Comments
  • Oct. 18, 2013, 12:35 PM
    • Wells Fargo's David Wong has cut his rating for the semiconductor industry to Market Perform, citing Intel and TSMC's (TSM +1.6%) Q4 guidance, and downbeat commentary from tech companies about electronics demand. That, along with an adverse reaction to AMD's Q3 numbers and Q4 guidance, is leading chip stocks to underperform (SOXX -0.2%) on a day when Internet stocks are flying higher thanks to Google.
    • Intel's guidance for seasonally strong Q4 implies only a 2% Q/Q sales increase at the midpoint. TSMC, which delivered its Q3 results yesterday, is guiding for Q4 revenue to fall to NT$144B-$147B ($4.9B-$5B) from Q3's NT$162.58B ($5.53B).
    • Though Q4 tends to be seasonally weak for foundries, TSMC did partly attribute its guidance to customer inventory adjustments and softening high-end mobile device demand.
    • Wong's downgrade is accompanied by ratings cuts for analog chipmakers International Rectifier and Monolithic Power. It comes two weeks after trade association SIA reported global chip sales rose 6.4% Y/Y in August; that was the fastest growth rate posted since March '11.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Oct. 18, 2013, 12:35 PM | 1 Comment
  • Oct. 4, 2013, 6:25 PM
    • Trade association SIA estimates global chip sales rose 1.3% M/M and 6.4% Y/Y in August, the Y/Y figure represents not only an improvement from July's 5.1%, but the highest growth rate seen since March '11.
    • While strong memory chip sales (aided by mobile demand and favorable pricing) naturally contributed to the growth, SIA says demand for non-memory products also rose. The growth comes in spite of soft demand for PCs, home electronics, and servers.
    • Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Earlier: Micron, SanDisk, mobile chipmakers rally following Samsung forecast
    | Oct. 4, 2013, 6:25 PM | Comment!
  • Jul. 24, 2013, 3:57 PM
    CEVA (CEVA -12.8%) is ending the day with huge losses after Broadcom, which uses CEVA's DSP cores in its baseband chips, missed Q2 estimates and issued light Q3 guidance, while blaming the shortfall in large part on light baseband sales. Chip stocks on the whole have had a bad day (SOXX -1.8%), as Broadcom's numbers and a ho-hum report from ARM overshadow Apple's FQ3 beat. SIMG -3.8%. OVTI -2.8%. MU -3.9%. SNDK -2.4%. IMOS -4.5%. Broadcom set-top chip rival STMicroelectronics (STM -2.7%) has fallen for the second day in a row following its Q2 report and soft Q3 guidance, aided by a downgrade to Underperform from BofA.
    | Jul. 24, 2013, 3:57 PM | Comment!
  • Jul. 8, 2013, 1:24 PM
    Chip stocks underperform (SOXX -1.8%) thanks to an Intel downgrade, negative PC commentary, and worries about Samsung's light profit forecast. Citi's Glen Yeung, who just cut his Intel estimates and pulled Qualcomm (QCOM -1.7%) from his firm's Top Picks Live list, notes smartphone penetration in developed markets (where high-end sales are concentrated) has hit 75%, and frets about a "lack of new, innovative features" in high-end phones. SWKS -3.4%. MRVL -2.9%. SMTC -3%. AVGO -3.1%. ADNC -4.3%. SNDK -2.4%. TQNT -2.4%. ATML -2.5%. TSM -3.2%. Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG. (SIA sales data)
    | Jul. 8, 2013, 1:24 PM | 3 Comments
  • Jul. 1, 2013, 6:46 PM
    Global chip sales rose 3.4% M/M in May, per the SIA's latest data. On a 3-month rolling average basis, they rose 4.6% M/M but just 1.3% Y/Y. Analysts are generally pleased. Though Evercore still expects a weak 2H, JPMorgan (6% 2013 growth forecast) notes sales are picking up following a weak Q1; Wedbush thinks both the data and its own checks suggest a chip recovery "continues at a healthy and steady pace;" and Wells Fargo (8%-10% 2013 forecast) likes the fact IC sales rose 6% Y/Y. Wells adds the ratio of chip equipment sales to IC sales remains low at 14%, which suggests equipment orders will eventually pick up. Chip equipment makers: AMAT, KLAC, LRCX, ASML, UTEK, RTEC. (Gartner)
    | Jul. 1, 2013, 6:46 PM | Comment!
  • Jun. 4, 2013, 12:05 PM
    Chip stocks outperform (SOXX +1.4%) after Microchip raises its June quarter guidance, and STMicroelectronics raises its 2013 guidance. Microchip rivals Texas Instruments (TXN +2.6%), Atmel (ATML +3.4%), and Freescale (FSL +2.1%) are among the winners, as is STMicroelectronics rival NXP (NXPI +3.6%). Also, Altera (ALTR +2.5%) is rallying with the help of an upgrade to Buy from Argus, and Intersil (ISIL +2.4%) is benefiting from a bullish coverage launch from Piper. Some chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG.
    | Jun. 4, 2013, 12:05 PM | Comment!
  • Jun. 3, 2013, 5:33 PM
    Microchip (MCHP) +4.5% after raising its FQ1 (ends June 30) guidance. The microcontroller vendor now expects 4%-7% Q/Q sales growth and EPS of $0.52-$0.56; that's better than prior guidance of 2%-6% growth and EPS of $0.50-$0.54, and largely above a consensus of $447.7M and $0.52. Microchip, often seen as a bellwether for chip stocks (SOXX, SMH), says it has "continued to see a very strong bookings and business environment," has "received excellent visibility" from customers, and is returning employees to work faster than expected to keep inventories from falling too low. Microchip's guidance hike comes after the SIA estimated chip sales fell 10% M/M in March, better than a historical drop of 15.3%.
    | Jun. 3, 2013, 5:33 PM | Comment!
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SMH Description
The Market Vectors®Semiconductor ETF (SMH) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors US Listed Semiconductor 25 Index (MVSMHTR). The Index is a rules-based index intended to track the overall performance of 25 of the largest U.S. listed, publicly traded semiconductor companies.
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Sector: Technology
Country: United States
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