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
Fri, Mar. 20, 10:49 AM| Comment!
Mon, Mar. 16, 4:11 PM
- BofA/Merrill has hiked its STMicroelectronics (NYSE:STM) target by €0.50 to €9.70 ($10.28). The firm cites a weak euro, STM's cost-cutting efforts, and a mix shift towards higher-margin products.
- The chipmaker closed today within $0.31 of a 52-week high of $10.00. Though shares have rallied over the last 4 months, STM has still markedly underperformed the Philadelphia Semi Index since the fall of 2013.
Mon, Mar. 2, 1:41 PM
- The Philadelphia Semi Index (SOXX +2.4%) has rallied to new highs after NXP announced it's buying microcontroller, network processor, and RF amplifier supplier Freescale for $16.7B after factoring net cash/debt, the biggest deal yet in the chip industry's ongoing consolidation wave. The Nasdaq is up 0.5%.
- Microcontroller makers are among today's big gainers - NXP/Freescale assert they'll be the world's biggest supplier of general-purpose microcontrollers. Standouts include Atmel (ATML +6%) and STMicroelectronics (STM +3.4%), as well as Cypress (CY +3.1%) and merger partner Spansion (CODE +3.2%).
- Other notable gainers include InvenSense (INVN +3.4%), Ambarella (AMBA +6.3%), Audience (ADNC +5.5%), Cirrus Logic (CRUS +3.7%), Cavium (CAVM +4.2%), ON Semi (ONNN +3.5%), Silicon Motion (SIMO +3.5%), InPhi (IPHI +3.8%), and TowerJazz (TSEM +5.5%).
- With the Mobile World Congress as a backdrop, InvenSense has unveiled a 6-axis SoC that pairs a gyroscope and acceleromoter with a motion processor and related software/algorithms; the company claims 25%-50% better power consumption than rival solutions. It has also launched a software library meant to "provide sensor-assisted positioning in places where GNSS alone cannot provide desired accuracy."
- Cavium has announced its OCTEON Fusion-M processor line for mobile base stations. The chips support up to 16 custom CPU cores running at 2GHz., and are declared by Cavium to enable "Smart Radio Heads" that can adapt to network conditions. They begin sampling in Q3.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
- Previously: Chip product launches: ARMH, EZCH, BRCM, NXPI, XLNX, IDTI
Mon, Jan. 5, 9:57 AM
- With Greece and oil-related fears once more taking a toll, The Euro Stoxx 50 is down 2.1%, and many continental indices posting ~2% declines. U.S.-traded European tech and telecom names are performing much the same way.
- Tech decliners: NOK -4.2%. ALU -3.3%. SAP -2.9%. STM -2%.
- Telecom decliners: VOD -2.4%. TEF -4%. ORAN -3.6%. TI -2.2%. PT -6%.
Fri, Jan. 2, 10:57 AM
- "Based on supply chain conversations, we believe SYNA has likely lost the touch controller socket on the upcoming Galaxy S6 (GS6) to STM," writes Pac Crest's John Vinh, discussing his downgrade of Synaptics to Sector Perform.
- Vinh: "We believe SYNA's latest-generation touch controller was highly competitive, but that STM was 'good enough' and was able to win on pricing with ASPs of $1+." STMicroelectronics' (STM +0.7%) shares are up modestly.
- Synaptics has the touch controller slot for the Galaxy S4 and S5, as well as the S5's fingerprint sensor slot. The company has been trying to differentiate itself from touch controller rivals by creating integrated touch/display driver (TDDI) solutions; the Renesas SP deal should give its efforts a boost.
Dec. 10, 2014, 2:39 PM
Oct. 29, 2014, 1:19 PM
- In addition to missing Q3 revenue estimates (while beating on EPS), STMicroelectronics (NYSE:STM) is guiding for Q4 revenue to be down 3.5% Q/Q (+/- 350 bps). That implies a range of $1.76B-$1.89B, well below a $2.01B consensus.
- The company witnessed a "softening of demand towards the end of [Q3], specifically in the mass market and in microcontrollers." Like many other chipmakers, STM was hammered on Oct. 10 after microcontroller vendor Microchip warned.
- All product groups are expected to decline Q/Q except for the Analog, MEMS, and Sensors group, which is benefiting from "key product ramp-ups, such as analog microphones, new 6-axis gyroscopes and touch controllers."
- STM plans to merge its Digital Convergence Group (makes TV/set-top SOCs, among other things) with its Imaging, Bi-CMOS, and Silicon Photonics Group into a new Digital Product Group. The reorg and other initiatives are expected to yield $100M/year in cost savings.
- Between them, the merging units had Q3 revenue of $286M (15% of total revenue). STM appears to be losing set-top chip share to Broadcom.
- Gross margin rose to 34.3% from 34% in Q2 and 32.4% a year ago. Q4 GM guidance is at 33.8% (+/- 200 bps). $93M was spent on buybacks.
- Citi's upgrade wasn't well-timed.
- Q3 results, PR
Oct. 29, 2014, 9:15 AM
Oct. 28, 2014, 10:53 AM
- Citi has upgraded STMicroelectronics (STM +2.7%) to Neutral ahead of tomorrow's Q3 report.
- The European chipmaker's shares are down 29% from a spring high of $10.00, and go for only 1.3x 2015E sales.
Oct. 13, 2014, 9:58 AM
- Pac Crest has downgraded analog/mixed-signal IC vendors Freescale (FSL -2.9%), ON Semi (ONNN -5.5%), and Silicon Labs (SLAB -3.4%) following Microchip's calendar Q3 warning. In-line with Microchip's cautious remarks, the firm cites evidence of a distributor inventory correction and weak Chinese demand.
- All three names sold off on Friday on account of Microchip, with Freescale and ON registering double-digit declines.
- Meanwhile, JPMorgan has downgraded European chipmakers STMicroelectronics (STM -3.4%) and Infineon (OTCPK:IFNNF) to Neutral. The firm is worried about the impact of German and Chinese macro trends.
Oct. 1, 2014, 9:29 AM
- "We strongly believe investors should look past the unpredictable nature of short-term fearmongers and remain focused on the long-term strategic mileposts that INVN has met," says Needham's Vernon Essi, Jr.
- Essi notes InvenSense was trading at ~$18 a year ago (just a little below current levels), when teardowns revealed its motion sensors weren't in the iPhone 5S. "Fast forward one year and INVN finds itself in the iPhone 6 with upwards of $100M in incremental annual revenue and $0.50 in EPS as a result." His target remains at $28.
- Ascendiant Capital's Cody Acree defended InvenSense yesterday. Like others, the firm argued Apple's inclusion of a Bosch accelerometer in the iPhone 6 (along with an InvenSense gyroscope/accelerometer) was simply done to improve power draw, and isn't a concern.
- Acree does believe traditional motion sensor supplier STMicroelectronics (NYSE:STM) has been qualified as a second source by Apple, but adds it's unknown how much business STM will ultimately get. "Remember, INVN was a second source for the prior iPhone but ended up with little-to-no volume."
- Recent InvenSense coverage
Sep. 22, 2014, 9:33 AM
- Baird has downgraded InvenSense (INVN -4.2%) to Neutral, and lowered its target by $7 to $23. The firm thinks a major smartphone OEM (Apple or Samsung?) could be switching to a dual-source strategy for gyroscopes and other components, and also believes STMicroelectronics (STM -2.9%) could be gaining share at other smartphone OEMs.
- It was only a few days ago that teardowns uncovered a 6-axis InvenSense gyroscope/accelerometer in iPhone 6 models; past iPhone models had relied on STMicro motion sensors.
- Samsung, meanwhile, has relied heavily on InvenSense to date. The electronics giant accounted for 30% of InvenSense's June quarter sales.
Sep. 19, 2014, 9:36 AM
- iFixit's teardown of the iPhone 6 Plus turned up five Qualcomm (NASDAQ:QCOM) chips, up from the three found in last year's teardown of the 5S and nearly matching the six found in certain Galaxy S5 teardowns.
- In addition to the expected Cat-4 LTE baseband modem, a Qualcomm power management IC, RF transceiver, receive-only chip (needed to enable LTE carrier aggregation), and envelope-tracking IC (relatively new, improves battery life) were found in the 6 Plus.
- In-line with rumors and the company's hints, an InvenSense (NYSE:INVN) motion sensor - specifically, a 6-axis gyroscope/accelerometer - was found. That suggests InvenSense has displaced STMicroelectronics (NYSE:STM) as the iPhone's motion sensor supplier.
- Two Skyworks (NASDAQ:SWKS) power amplifier modules are found, including a low-band LTE part. Avago (NASDAQ:AVGO) has both a high-band amplifier module, and an integrated ultra high-band amplifier/FBAR filter module. TriQuint (NASDAQ:TQNT) can claim a 3G amplifier module, and merger partner RF Micro (NASDAQ:RFMD) an antenna switch module.
- Broadcom (NASDAQ:BRCM) appears to remain the iPhone's combo chip supplier (courtesy of a module from partner Murata), and also supplies a touch controller IC. Chipworks thinks Broadcom also has the Wi-Fi slot for the Apple Watch.
- As expected, NXP (NASDAQ:NXPI) is supplying an NFC module and the M8 motion co-processsor, and Cirrus Logic (NASDAQ:CRUS) the audio codec IC. Texas Instruments (NASDAQ:TXN) is providing a touch transmitter IC.
- Moving in response: INVN +1.9%. AVGO +1.5%. STM -3.9%.
Jul. 23, 2014, 3:59 PM
- In addition missing Q2 revenue estimates (while beating on EPS), STMicroelectronics (STM) has guided for Q3 revenue to grow 3% Q/Q (+/- 3.5%). That implies revenue of $1.92B at the midpoint, below a $2B consensus.
- Contributing to the EPS beat: Q2 gross margin was 34%, +120 bps Q/Q and Y/Y, and 40 bps above STM's guidance midpoint. GM is expected to come in at 34.4% (+/- 2%) in Q3.
- Automotive IC sales grew 11% Y/Y in Q2 to $463M, but analog/MEMS sales fell 19% to $264M. Industrial & power discrete sales rose 2% to $475M, and microcontroller, memory, & secure MCU sales rose 13% to $396M. Digital convergence group sales tumbled 51% to $184M thanks to the ST-Ericsson wind-down/asset transfer.
- Plenty of other chip stocks are also selling off, with some help from Xilinx and Juniper.
- Q2 results, PR
STM vs. ETF Alternatives
STMicroelectronics NV designs, develops, manufactures and markets semiconductor products used in different microelectronic applications, including automotive products, computer peripherals, telecommunications systems, consumer products, & control systems.
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