Tag Archives: cavm

Apple iPhone 7 Ramp To Slug Analog Devices On Declining Q2 Sales

Apple ‘s ( AAPL ) lukewarm iPhone 7 ramp may slug Analog Devices ( ADI ) early Wednesday, when the chipmaker is expected to report a 5% year-over-year revenue dip on a 40% sequential plunge in sales to Apple. But a “bright spot” of industrial and automotive sales will show a seasonal boost, outplaying rival Xilinx ( XLNX ), and wireless communication revenue will come off a trough to top competitors Nokia ( NOK ) and Cavium ( CAVM ), MKM analyst Ian Ing said Tuesday. In morning trading on the stock market today , Analog Devices stock was up a fraction, near 55.50. Shares are flat for the year vs. a 6% fall in IBD’s 38-company Electronic Semiconductor-Manufacturing industry group. Analog Devices stock hit a 2016 high on April 27 at 59.87, but it’s down 7% in the three weeks since then. In late April, Apple reported its first-ever year-over-year decline in iPhone shipments, in its March-quarter results. Analog Devices is expected to post $777.6 million in sales and 62 cents earnings per share ex items, down a respective 5% and 15% vs. the year-earlier quarter, for its fiscal Q2 ended on or near April 30, according to the consensus of 29 analysts polled by Thomson Reuters. That would follow flat Q1 sales and Analog Devices’ first EPS decline in 11 quarters. Wall Street expects typically strong Q3 and Q4 sales to also decline — by 2% and 6%, respectively. Over the past two years, Q3 had risen an average 13.5%, and Q4 sales had gained an average 20%. Recent reports indicate Apple suppliers are getting fewer orders compared with the year-ago period. Credit Suisse analyst John Pitzer expects Analog Devices to report $30 million in Q2 sales to Apple, down 40% sequentially. For Q3, he models $80 million in sales to Apple vs. consensus views for $110 million. “We suspect modest downside to our Apple revenue estimate for (the second half of the year) offset by upside to (industrial, automotive and communications),” he wrote in a research report. Apple accounts for about 10% of Analog Devices’ sales, Pitzer estimated. Views for $200 million in Apple sales for the latter half of 2016 would be down 15% year over year, but they still “might be $20 million to $30 million too high,” he said. But $1.33 billion views for automotive, industrial and communications sales, up 2% vs. the year-earlier period, doesn’t reflect accelerating advanced driver assistance systems (ADAS) and communications infrastructure opportunities, he wrote. Pitzer retained his outperform rating and 72 price target on Analog Devices stock. Ing kept his neutral rating and 56 price target. Analog Devices’ messaging has tilted in favor of “analog utility” investors vs. momentum growth investors, Ing wrote in a report. Analog utility investors prefer business-to-business ventures over “volatile” portables exposure.

Apple Supplier Broadcom, Tech Giant Cisco Pitted In Data Center War

Tech giant Cisco Systems ‘ ( CSCO ) 16-nanometer data center semiconductor could slug Apple ( AAPL ) supplier Broadcom ( AVGO ), which is ramping its 28-nm Tomahawk technology, an RBC analyst said Monday. Broadcom’s Tomahawk will go for $600-$700 per chip, replacing the outmoded Trident chip that costs less than $500, on average. Unlike Trident, however, Tomahawk won’t win across-the-board vs. Cisco, RBC’s Amit Daryanani wrote. Cisco recently unveiled its CloudScale application-specific integrated circuit (ASIC), in direct competition with data center chipmakers Broadcom, Cavium ( CAVM ), Intel ( INTC ), Marvell Technology Group ( MRVL ) and Mellanox Technologies ( MLNX ). In the past, Broadcom’s Trident won “across the board” at Cisco. This time, Cisco is likely to use its own CloudScale ASIC in its Nexus 9000, 9200 and 9300 platforms, leaving the 9500 to hold the Tomahawk silicon, Daryanani said. Other users include Hewlett-Packard Enterprise ( HPE ), Arista Networks ( ANET ) and Juniper Networks ( JNPR ), which had a two-year head start to begin ramping Tomahawk-based solution, Daryanani wrote. He sees a five- to six-year lifespan for the product. Still, “we believe Cisco encroachment into the merchant silicon market needs to be monitored by Broadcom investors,” he wrote. “For now, we continue to believe Broadcom’s solutions are the market-leaders for cloud/data center spenders.” Daryanani maintained his 180 price target and top performer rating on Broadcom stock. Shares rose a fraction Monday, to 152.89, on a day when Apple released new products that didn’t represent huge advances and were expected. Cisco stock fell a fraction on Wall Street Monday, while Apple was flat.

Chinese ZTE Sanctions Over Iran Sales Could Hurt Apple Chipmakers

A new U.S. export ban against Chinese mobile gear maker ZTE related to its under-the-table sales to Iran could hurt  Apple ( AAPL ) chip suppliers Qualcomm ( QCOM ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ), a Pacific Crest analyst wrote Wednesday. Regulators imposed the sanctions Tuesday, alleging that ZTE used four shell companies in China and Iran to “illicitly re-export controlled items to Iran in violation of U.S. export control laws.” The ban prohibits U.S. companies from selling to ZTE. Chinese foreign minister Wang Yi opposed the sanctions, saying that ZTE’s tech purchases support thousands of U.S. jobs, according to the AP. Chipmakers Cavium ( CAVM ), Integrated Device Technology ( IDTI ), Silicon Laboratories ( SLAB ) and Xilinx ( XLNX ) also sell to ZTE. “This approach will only hurt others without necessarily benefiting oneself,” Yi said at a new conference Tuesday. ZTE isn’t banned from selling products in the U.S. but cannot procure components from U.S. companies. U.S. firms can apply for an export license, but Pacific Crest analyst John Vinh sees the government unlikely to grant them. The development could shuffle the smartphone market. ZTE owns about 4% of the global smartphone market, Vinh wrote. Industry tracker IDC says that ZTE competes alongside Xiaomi and Huawei in the low-end to midrange smartphone market, vs. No. 1 smartphone vendor Samsung. Vinh expects short-term effects on chipmakers to be “negligible.” Longer term, he says that ZTE could lose share to Huawei, Ericsson ( ERIC ), Alcatel-Lucent ( ALU ), Nokia ( NOK ), Siemens ( SIEGY ), Xiaomi, Oppo and Lenovo. “Alternatively, ZTE could conform to the U.S. embargo list, which could result in sanctions being lifted,” he wrote. Xilinx is most at risk, with 3%-3.5% of total revenue stemming from sales to ZTE, Vinh estimates. Silicon Labs follows with 2%-2.5% of total revenue wrapped in ZTE sales. IDT, Qualcomm and Qorvo are each 2% tied to ZTE, Cavium 1%-2%, and about 1.5% of Skyworks’ sales stem from the Chinese smartphone maker. Wall Street largely yawned Wednesday, however. Midday on the stock market today , only Qualcomm stock was down, dipping a fraction. Cavium stock was up a fraction. Shares of Qorvo, Silicon Labs, Skyworks and Xilinx were all up more than 1%. Integrated Device Technology stock was up more than 2.5%.