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Fri, Oct. 10, 1:42 PM
- Following Microchip's warning and related prediction of a chip industry correction, Goldman's James Covello thinks there's 15%-20% downside in industry names.
- Covello, who lowered his industry view to Cautious in August: "The last time Microchip negatively preannounced was October 15, 2012 (3% sales miss). Between October 1 and December 31, Street 2013 sales estimates for the Semi group were revised down 6% on average."
- He adds several datapoints suggest the industry has been overheating. Among them: Semi revenue growth has outpaced end-market growth, and supply chain inventory dollars rose 3% more than their 3-year average in Q2.
- "Nobody will be spared," predicts Hedgeye's Craig Berger. Benchmark's Gary Mobley observes 5 of the 6 chip stocks to have made Q3 pre-announcements have thus done so to the downside.
- Worth noting: Mobile chipmaker Silicon Motion (SIMO -8.9%) is the one chipmaker to have positively pre-announced. It might not be a coincidence that Microchip has relatively low mobile exposure.
- Observing U.S. macro data remains positive even as China and Europe soften, Longbow's JoAnne Feeney remains bullish long-term on select names. However, she has cut her short-term rating on Linear (LLTC -3.8%) to Sell, and removed IDT (IDTI -7.1%) from her trading long list.
- In addition to the names previously mentioned, the following chip stocks are seeing steep losses: AMD -5.1%. FCS -13.6%. NXPI -11.2%. CODE -11%. LSCC -9.6%. SIMG -8.1%. IPHI -7.7%. ISIL -9.5%. CY -6.9%. RMBS -7.1%. QUIK -5.7%. SQNS -5.1%. IMOS -6.5%.
- Foundries and contract manufacturers are also selling off: TSM -3.9%. UMC -2%. SMI -2.4%. SANM -11.7%. FLEX -6.8%. JBL -4%.
- Chip ETFs: SOXX, SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Fri, Sep. 26, 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.
Fri, Aug. 15, 6:27 PM
- With the company dedicating a large chunk of capacity to producing Apple's A8 CPU, TSMC's (NYSE:TSM) Q4 capacity is "almost fully booked," sources tell Digitimes. Clients short on capacity are reportedly being urged to book in advance.
- The site adds a number of clients, including Qualcomm, Himax, and MediaTek, have reported seeing tight supplies. Qualcomm has already struck a deal with China's SMIC (NYSE:SMI) to sidestep TSMC's supply constraints. UMC, which has been ceding share to TSMC in recent years, could also benefit.
Wed, Aug. 6, 7:58 AM
Thu, Jul. 3, 3:39 PM
- Qualcomm (QCOM +1%) has struck a deal with SMIC (SMI +2.5%) to have the Chinese foundry to produce 28nm Snapdragon processors. SMIC has previously manufactured (less demanding) power management and connectivity ICs for Qualcomm.
- The deal comes ahead of Apple/Samsung's fall hardware refreshes, and undoubtedly has much to do with tight 28nm capacity at main foundry partner TSMC (TSM +1.5%). Digitimes has reported Qualcomm and MediaTek (among others) are looking to secure 28nm capacity from SMIC, UMC, and Globalfoundries due to TSMC's supply constraints.
- Digitimes states Qualcomm has booked over half of SMIC's 28nm capacity, and that MediaTek will be placing orders of its own. The site has also reported Qualcomm has placed orders with Globalfoundries and Samsung for their next-gen 14nm process (set to go live in early 2015).
- TSMC's efforts to ramp 20nm production for Apple could be contributing to its 28nm crunch. JPMorgan expects TSMC to produce 120k-130k 20nm wafers for Apple in Q3, up from just 30K-40K in Q2. It sees Apple respectively making up 13% and 15% of TSMC's Q3 and Q4 revenue vs. just 4% of Q2 revenue.
- Yesterday: Qualcomm buys WiGig chipmaker Wilocity
Thu, Apr. 24, 9:28 AM
Wed, Feb. 19, 9:48 AM
- SolarCity (SCTY -4.2%) has been cut to Neutral by Baird ahead of Monday's Q4 report.
- Red Hat (RHT +1%) has been upgraded to Outperform by Cowen.
- Gogo (GOGO +3.5%) has been upgraded to Overweight by Evercore. Q4 results are due on March 13.
- Youku (YOKU -3.3%) has been cut to Sell by Maxim. Q4 results are expected later this month.
- SMIC (SMI -0.9%) has been cut to Neutral by JPMorgan following its Q4 miss and soft Q1 guidance.
- Cabot Microelectronics (CCMP +4.6%) has been upgraded to Buy by D.A. Davidson.
Tue, Feb. 18, 2:50 PM
- Chinese foundry SMIC (SMI -19.4%) is plunging after reporting Q4 revenue of $491.8M (+1.2% Y/Y) and EPS of $0.02. While the latter is in-line, the former is below a $501.2M consensus.
- SMIC is also guiding for Q1 revenue of $440M-$460M, below a $501.1M consensus. Gross margin is expected to be in a range of 16%-19%, after coming in at 18.9% in Q4 (-210 bps Q/Q and -100 bps Y/Y).
- Q4 capacity utilization was 87.4%, down from 88.2% in Q3 and 90.5% a year earlier. Wafer shipments (8" equivalents) fell 7.9% Q/Q and 1.1% Y/Y to 601.6K.
Tue, Feb. 18, 12:47 PM
Mon, Jan. 27, 9:45 AM
- Cisco (CSCO -0.9%) has been cut to Underweight by JPMorgan ahead of its Feb. 12 FQ2 report.
- MercadoLibre (MELI -1.7%) has been cut to Underperform by BofA/Merrill. Shares tumbled last week, partly on account of Venezuelan/Argentine forex swings.
- Xerox (XRX -1.5%) has been cut to Market Perform by BMO after missing Q4 revenue estimates on Friday.
- Cavium (CAVM +1.6%) has been upgraded to Outperform by Wedbush ahead of Wednesday's Q4 report.
- Xoom (XOOM +8%) has been upgraded all the way to Strong Buy from Market Perform by Raymond James. Q4 results are due on Feb. 4.
- RetailMeNot (SALE +3.2%) has been upgraded to Buy by Goldman. Q4 results arrive on Feb. 6.
- SMI (SMI +9.4%) has received a two-notch upgrade to Buy by UBS.
- IDT (IDTI -4.1%) has been cut to Underweight by Barclays.
- Nintendo (NTDOY) has been cut to Sell by Goldman. Shares fell 2.2% in Tokyo.
Fri, Jan. 17, 9:13 AM
Fri, Jan. 3, 5:41 PM
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
Oct. 22, 2013, 8:58 AM| Comment!
Aug. 29, 2013, 9:45 AM
- Infosys (INFY +0.1%) has been upgraded to Outperform, and Wipro (WIT +0.3%) to Neutral, by Macquarie.
- AutoNavi (AMAP -1%) has received a two-notch downgrade to Underperform from Macquarie, and a downgrade to Hold from Deutsche, following its Q2 miss and decision to stop providing guidance.
- Vodafone (VOD +8.3%) has been started at Sell by SocGen. Investors are more interested in other news.
- SMI (SMI +2.8%) has been upgraded to Market Perform by Bernstein.
- LTX-Credence (LTXC -1.4%) has been cut to Hold by Craig-Hallum a day after providing soft guidance to go with its FQ4 results.
Aug. 2, 2013, 5:49 PM
SMI vs. ETF Alternatives
Semiconductor Manufacturing International Corporation, together with its subsidiaries, is engaged in the computer-aided design, manufacturing, testing, packaging, and trading of integrated circuits and other semiconductor services.
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