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NXP Semiconductors ‘ ( NXPI ) rumored $2 billion price tag for its Apple ( AAPL )-facing standard products division is “significantly” undervalued, says Credit Suisse. A $3 billion to $3.2 billion bidding price seems more accurate, Credit Suisse analyst John Pitzer wrote in a research report Tuesday. The standard products division is expected to generate $1.54 billion in 2016 sales, about 12% of NXP’s total revenue. But the division is struggling. In 2015, sales of its standard products — signal discretes, power discretes, protection and signal conditioning — fell 3% to $1.24 billion. Q4 sales fell 18% year over year, to $271 million. For the current quarter, NXP guided $275 million to $285 million in sales, down 13% at the midpoint vs. the year-earlier period and up 3% sequentially. Chinese bidders reportedly are interested in the segment, which supplies components for handsets, computing, consumer and automotive, Pitzer wrote. Smartphone customers include Apple, Huawei and Samsung. Although China consumes roughly half of the world’s $350 billion in chips, the country’s chip companies account for just 2.5% of the sector’s revenue. The country is looking to curb its reliance on foreign chips by building its own thriving industry. But chip technology is closely guarded and a rumored $23 billion Chinese bid for U.S. memory chipmaker Micron Technology ( MU ) had analysts scoffing last year. U.S. regulators likely would have killed that deal, they said. NXP, though, wouldn’t face nearly as stringent regulatory hurdles, Pitzer wrote. NXP is based in the Netherlands and its standard products division is located outside the U.S. Also, he points out, the segment isn’t producing specialty technology. “This portfolio consists of a large variety of catalog products, using widely-known production techniques with characteristics that are largely standardized throughout the industry,” he wrote. On Monday, NXP topped the chip count in an iFixit teardown of the 9.7-inch iPad Pro . The chipmaker supplies a Touch ID sensor, a controller and a charging component. NXP also supplied a controller for the new iPhone SE . Its Freescale acquisition in December opens NXP up to the high-margin automotive industry. NXP said “90% of auto innovation” is in electronics and it plans to lead the industry in terms of infotainment, vehicle networking, body, safety and secure access. NXP stock was flat, near 83, in afternoon trading on the stock market today . Its shares are down 1.5% this year. Scalper1 News
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