Tag Archives: amat

Will Apple iPhone 7 Sell, With Bigger Upgrade Coming Next Year?

Apple ( AAPL ) shares have gotten a lift this week on reports of higher-than-expected production orders for the upcoming iPhone 7. But Wall Street is starting to wrestle with worries that iPhone users might skip that modest upgrade and wait for next year’s expected radical redesign. The iPhone 7, likely to be released in September, is expected to look much like the current iPhone 6S series, but with a thinner body, faster processor and better camera. It also could be the first waterproof iPhone. But next year’s iPhone 8 is rumored to use an OLED display, which offers richer colors, darker blacks and lower power consumption. OLED displays also are thinner than LCD screens and are flexible, allowing new design options. The iPhone 8 could feature an all-glass, curved screen design. It might even eliminate the physical home button in favor of the pressure-sensitive screen, according to tech news reports. Universal Display ( OLED ) stock climbed to a record high Tuesday on the iPhone 8 speculation. Universal Display is a key supplier of technology and materials for OLED displays. Universal Display climbed as much as 5.8% to 64.83 in intraday trading on the stock market today . In afternoon trading, it was up 5%, near 64.50. Apple shares were up 1.4%, below 98, in afternoon trading Tuesday. Semiconductor equipment manufacturer Applied Materials ( AMAT ) also is benefiting from interest in OLED. Last week, Applied Materials said its Q2 display orders rose a whopping 483%, driven by demand for machines used to manufacture OLED displays. With rumors rampant about the iPhone 8, smartphone users looking to upgrade will have to decide whether to get a more traditional-looking iPhone 7 or hold out for the revamped iPhone 8. Consumers Won’t Skip iPhone 7 Upgrade: Wells Fargo Wells Fargo Securities analyst Maynard Um said in a research report Monday that he doesn’t believe next year’s iPhone will hold back upgrades during the iPhone 7 cycle. “While it is reasonable to assume Apple may introduce an iconic iPhone in 2017, we believe it is not a foregone conclusion that the consumers will skip the iPhone 7 upgrade in 2016,” Um said. “The core of our premise revolves around continued competition for subscribers as two-year contracts come up for renewal.” If wireless carriers continue to run aggressive promotions to reduce subscriber churn and to attract new customers coming off two-year contracts, there may be strong incentives for people to upgrade, Um said. Um has an outperform rating on Apple stock, with a fair value of 120 to 130. Despite encouraging iPhone 7 production reports , UBS analyst Steven Milunovich is cautious. He recently lowered his iPhone forecast to unit growth of 2% for fiscal 2017, down from 4% previously. Apple’s fiscal 2017 starts on Sept. 25. For fiscal 2018, during the iPhone 8 cycle, he expects unit sales growth of 15%. Milunovich rates Apple stock as buy, with a 12-month price target of 115. “A lack of differentiation in the iPhone 7 will cause the upgrade cycle to lengthen,” he said in a report. “Although it’s possible that Apple has a ‘gee-whiz’ upgrade in store for the iPhone 7, the absence of leaks makes it unlikely.” RELATED: Universal Display Spikes On iPhone OLED Prospects Apple Begins Retail Refresh With San Francisco Store

Could Lam-KLA Marriage Face ‘Deal-Killing’ Objection By Intel, TSM?

Lam Research ( LRCX ) and KLA-Tencor ( KLAC ) could be forced to trim competitive segments to push through the $10.6 billion merger that threatens to swallow rival Applied Materials ( AMAT ), Semiconductors Advisers President Robert Maire said Monday. And unlike Applied Materials’ failed attempt to acquire Tokyo Electron, Lam only sees $250 million in initial savings and therefore has less wiggle room to negotiate potential antitrust remedies, Maire wrote in a research report. “Both Lam and KLA are already superbly run companies without a lot of cleaning up to be done,” he wrote. “This suggests that there is not a lot to be gained in efficiency by the combo as they are already quite profitable as separate entities.” The synergies, however, have likely prompted antitrust concerns. Last week, the U.S. Department of Justice sent a “ second request ,” asking for more information into Lam’s plan to buy KLA. Now, the duo could be forced to sign a “plea bargain,” Maire said. KLA products measure competitors’ dep and etch tools, leading to a “fox guarding the hen house” paradigm where a Lam-owned subsidiary would be charged with rating rivals’ tools. Under the DOJ consent decree, KLA could be forced to divest those businesses or license its technology. “The range (of potential remedies) is quite broad, from almost zero cost to deal-killing cost and everything in between,” Maire said. Applied Materials and Tokyo Electron eventually called off their merger in the face of stringent regulatory concerns. After the DOJ rules, the Lam-KLA deal still faces potential fights from regulators in Japan, China, Korea and the Netherlands, where a number of rivals operate. And major chip manufacturers  Intel ( INTC ) and Taiwan Semiconductor Manufacturing ( TSM ) also will likely have objections, Maire says. “We would imagine that they are concerned about their suppliers gaining too much leverage against them and holding too much consolidated power,” he wrote. “Both are probably happier with the status quo.” On the stock market today , Lam and KLA stocks were each rose a fraction, trailing a 1% rise in Applied Materials stock. No. 1 chip-gear maker ASML ( ASML ) stock also rose a fraction Monday.

Applied Materials Q3 Guidance Tops By $300 Mil After Narrow Q2 Beat

No. 2 chip-gear maker Applied Materials ( AMAT ) toasted Wall Street’s current-quarter guidance expectations late Thursday and reported in-line Q2 metrics, prompting shares to rise in after-hours trading. Late Thursday, Applied Materials stock was up more than 4% in after-hours trading Thursday, after the company posted its Q2 earnings results. Shares closed down a penny in the regular session in the stock market today , at 19.91. Top rival ASML ( ASML ) stock fell 1.3% Thursday. Soon-to-merger KLA-Tencor ( KLAC ) and Lam Research ( LRCX ) stocks split the difference, down and up less than 1% each in the regular session. IBD’s 34-company Electronic Semiconductor-Manufacturing industry group fell nearly 1%. For the quarter ended May 1, Applied Materials reported $2.45 billion in sales and 34 cents earnings per share ex items, flat and up 17%, respectively, vs. the year-earlier quarter. Sales edged analyst views for $2.43 billion and EPS beat the consensus for 32 cents. Three months ago, Applied Materials guided to a 5%-10% sequential increase in sales, implying $2.37 billion to $2.48 billion, and 30-34 cents. Applied Materials guided to a 14%-18% quarter-over-quarter jump in current-quarter sales, implying $2.79 billion to $2.89 billion and topping the consensus of 22 analysts polled by Thomson Reuters for $2.51 billion. Sales would be up 14% vs. the year-ago quarter. EPS minus items guidance for 46-50 cents was a dime above Wall Street at the low point, and would be up 45.5%.