Tag Archives: xlnx

Rumored Xilinx Bidder Qualcomm Better Off Buying Apple Supplier NXP

Xilinx ( XLNX ) stock rocketed near the close Tuesday on a rumored $15 billion takeout offer, but Cowen analyst Timothy Arcuri says Apple ( AAPL ) supplier Qualcomm ( QCOM ) — often cited as a potential Xilinx buyer — would be better off targeting NXP Semiconductors ( NXPI ). Street Insider first reported the rumor of the offer, citing sources familiar with the matter, but didn’t identify the bidder. Xilinx stock shot up 5.7% near the close Tuesday and was up a fraction in after-hours trading. Arcuri retained his outperform rating and 60 price target on Qualcomm stock. Earlier Tuesday, MKM analyst Ian Ing reiterated his view that Broadcom ( AVGO ) and Qualcomm are potential Xilinx suitors. But Arcuri says Xilinx wouldn’t “move the needle” for Qualcomm, which may not be completely committed to the data center path. Xilinx’s field programmable gate array (FPGA) chips are ideal for data center acceleration, Ing wrote in a research report. “In some ways, Xilinx would clearly accelerate Qualcomm’s data center initiatives, but we wouldn’t view a Qualcomm/Xilinx deal all that favorably for Qualcomm and would much rather see it buy an asset like NXP,” Arcuri wrote in a research report. “This would simply be a huge amount of money to spend for a deal that isn’t transformational.” Acquiring NXP would allow Qualcomm to tap into offshore cash, which wouldn’t be possible in the case of Xilinx, Arcuri noted. And as Xilinx suits up for a FPGA battle against Intel ( INTC ), it’s planning on spending a lot of dough. “If we were Qualcomm, this factor argues it is better off to wait,” he wrote. Still, Xilinx is the singular merchant FPGA player following Intel’s $16.7 billion acquisition of rival Altera late last year, William Blair analyst Anil Doradla noted earlier Tuesday. The rumored takeout bid follows Xilinx’s late Monday analyst day. But Doradla wasn’t too impressed, saying the event “lacked confidence.” Xilinx is focusing on cloud computing, embedded vision, industrial Internet of Things and 5G markets rather than its bread-and-butter wireless and wireline markets.

Did Xilinx’s 2021 Forecast Undercut Intel’s $17 Billion Altera Buy?

Broadly, Xilinx ‘s ( XLNX ) analyst day Monday was an acknowledgement that the field programmable gate array (FPGA) industry will grow less than 10% in the long term, which could hurt the $16.7 billion bet placed last year by No. 1 chipmaker Intel ( INTC ) on FPGA-maker Altera, a William Blair analyst said Tuesday. Late Monday, stand-alone FPGA maker Xilinx reiterated its fiscal 2017 guidance for growth of 4%-8% for sales and 7%-9% for operational expenses. Through 2021, Xilinx expects $750 million in incremental opportunity, but that only represents a 6% compound annual growth rate. FPGAs are chips which customers can program “in the field,” after manufacture, according to their needs. The overall tone Monday was positive “but lacked conviction,” William Blair analyst Anil Doradla wrote Tuesday in a research report. Commentary regarding Xilinx’s bread-and-butter wireless and wireline segments was limited, leading Doradla to say demand “continues to be muted.” “We believe the company is working hard to diversify away from its traditional markets as the company’s core markets continue to face structural shifts and increasingly pose headwinds to the company,” he wrote. Asian product makers are unlikely to pay premium dollars for Xilinx’s high-end FPGAs, and the company’s aerospace and defense spending opportunities are highly exposed to volatile government funding, Doradla wrote. But he kept his outperform rating on Xilinx stock. Xilinx’s commentary Monday centered on growth opportunities within cloud computing, embedded vision, industrial Internet of Things (IoT) and 5G markets. There, Xilinx faces FPGA competition from Intel/Altera and an IoT rivalry with  Nvidia ( NVDA ) graphics chips. In morning trading on the stock market today , Xilinx stock nudged up 1%, above 45. Shares have climbed incrementally on seven of the past eight trading days. But Tuesday’s rise underperformed IBD’s 41-company Electronic Semiconductor-Fabless industry group, which was up more than 2% Tuesday morning. Intel stock was up 2.5%, near 31. Xilinx Viewed As Possible Takeover Target Xilinx’s fiscal 2017 investments could lead to greater market share gains against Intel/Altera, Rosenblatt analyst Kinngai Chan wrote in a report. Xilinx sees its 28-nanometer and 20-nm market share at 65% and 80%, respectively. And Xilinx forecasts a one-year lead on Altera in the 16-nm market. This refers to the width of the circuitry etching in chips, so the smaller the manufacturing capability, the more electronics that in theory can go onto a chip. The investments should lead to “robust” growth for patient investors in 2021, MKM analyst Ian Ing says. The competitive landscape vs. Intel looks “benign,” and Xilinx’s uniquely re-configurable chips are ideal for data center acceleration, he wrote in a report. But “we do not foresee Xilinx’s investment time frames shortening from the four-five years from initial investments to material revenues,” he wrote. “Specialty FPGA chips are unique, given that they must go through two complete design and development cycles before volume.” That could drive off potential investors, he wrote, reiterating his belief that Xilinx could benefit from an acquisition by Apple ( AAPL ) suppliers such as  Qualcomm ( QCOM ) or Broadcom ( AVGO ). William Blair’s Doradla noted as much — Xilinx remains the singular merchant player in the FPGA market, he said. Ing kept his neutral rating and 45 price target on Xilinx stock.

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.