Just started building a position in AMKR with a buy of 2000 shares at $5.61. Have no idea if this is the bottom, will buy more if it continues to drop.
Sentiment: Strong Buy
Read the other day Xiaomi is using the Snapdragon 410. Trying to get a feel for what is going on with their #1 customer Qualcomm so hearing about the Xiaomi biz is a plus. Xiaomi, a Chinese smart phone maker is privately held. Supposed to be worth around $46 billion.
Even though the last qtr was seen as a disappointment revenue was up almost 7% yoy.
Understanding equipment utilization was how Boruch built the company. That understanding was loss for a few years but it certainly looks like Kelley read JB's playbook. I sure hope so!
I don't think that is a bad move. Just like to add this. KIm did not think he had enough # of shares . He exercise option of 60k around 9-11-14 @5.31. Fast path of mobile phones growth is over, but we continued to need a lot more of semi. for sure. I hope 10nm will not come for few years.(not all semi. related products need 10nm). Stop spending and get all the existing equipment running , will move this stock up big.
Easy to fix. Just to get few Tier-2 customers which they are working on. Tech. support & Customer services is important , but I think Guan Xi is more important. When AMKR can get Mediatech , Rockchip ,and Allwinner's biz. , you will see the Street's response.
You are completely right! They don't care a bit about what "non-executive share holders" views are if they disagree with the Kim's. Get over it, it is not going to change but the bigger point is that it is not illegal and it is clearly explained in SEC filings, time and again. The SEC says that public companies follow the law and policies that are supported by a majority of the shareholders. This is not a one person, one vote democracy. It's one share, one vote! The Kims control almost 2/3 of the shares. That's the bad news. The good news is that Kim is getting a terrible return and as the questioner said they are not getting any real benefit from being a public company. Management has to fix that or he will replace them. You can pick your guess for what the plan is (you know mine) but a horrid return is a HUGE motivation. I'm sure it bothers them so much more than it does the other 1/3. There is a plan, there is a big picture, there is an end game!
Invest, to your point . . . if Kim's return is so paltry, then why is the board so complacent? After all, they obviously don't care about non-executive shareholders? Someone's got to be held accountable. Sitting around (or riding around the golf course) and simply pocketing their director's fees insults the public shareholders.
Nope, pretty much sums it up to me. Thought we would see it improve with new management and while it may have operationally, market doesn't care or think so.
I agree with the general view of your statements, except for #4 and that is the only one in your list that has any real meaning to me. To any shareholder, the return is why you invest. The Kim's are receiving a very minimum return on what I'm sure they see as their real investment. I would be very surprised if they did not view it at less than 3 billion. The return they are getting on this investment, including salaries, loan interest, and perks is peanuts compared to what the return should be on 3 billion and there is real market risks involved. Kim is doing so poorly (less than 1%) there has to be a another answer. They can not be satisfied, there has to be an end game that will generate the proper return for a large amount of money and years of hard work. That is not wishful thinking on my part. How could that not be true? Now, unfortunately I have no idea if and when they can make it happen. The last team they had struck out badly! Perhaps this new one can make it happen. So far there has been some real progress and the fact that Kelley hold a meaningful amount of shares that ties his interest with ours is meaningful. So I still think we got a shot. That what I think you have missed.
Let's see if I understand this correctly:
1. OSAT is an extremely capital intensive industry that has failed to meaningfully consolidate in the 16 years AMKR has been public.
2. AMKR's puny operating margins are not consistent with a cap intensive company that supposedly is a purveyor of high end packaging technology critical to 'enabling an electronic world'.
3. AMKR has been saddled with expensive debt since rescuing its Korean sibling, Anam, 15 years ago.
4. Kim has done quite well as major a debt investor in AMKR; neither income nor wealth generation seem to be a consideration.
5. For all intents and purposes, AMKR is a private company. There has been no evidence that executive management is interested in building shareholder value.
6. Conversely, I am at a loss to understand how AMKR's directors, which have consistently abdicated their fiduciary responsibility to represent shareholder interests, can honestly consider themselves as stewards of a public company.
7. Did I miss anything?
MediaTek's Plan To Take On Qualcomm And Move Up In The Cut-Throat World Of Mobile
This story appears in the #$%$ne 2015 issue of Forbes Asia.
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MediaTek began in 1997 by building the components and drawing up the designs for a flurry of consumer electronic goods–CD-ROM drives, DVD players, TVs. Entering the phone world, the Taiwan company became the supplier of choice for cheap, second-generation (2G) and third-generation (3G) Chinese handsets, earning MediaTek’s billionaire chairman and chief executive, Tsai Ming-Kai, the title of “King of the Bandit Phones.”
It’s no surprise that Tsai is an admirer of Harvard Business School guru Clayton Christensen and his theories of how scrappy upstarts unseat established incumbents. MediaTek has left behind a trail of disrupted rivals, and now, as it looks for a way into the U.S. and Western Europe smartphone markets, it has one giant rival in its sights: U.S. chipmaker Qualcomm QCOM -0.77%.
MediaTek’s talent lies in getting smartphone makers up and running, fast. It provides reference designs–blueprints that new manufacturers can follow quickly to put together their own phones. “We reduce the whole phone-design, mass-production cycle from one and a half years to six months,” says MediaTek’s senior vice president, Jeffrey #$%$. “People are happy about that.”
The company–which ranks at No. 788 on this year’s Global 2000 list, up from 1,029 a year ago–also builds the application processors and cellular modem chips behind most of these bargain smartphones. But Qualcomm, which comes in at No. 156, excels at mobile-phone processors and the latest cellular-modem technology–LTE, or Long-Term Evolution. For flagship phone models, top phonemakers have overwhelmingly used Qualcomm’s Snapdragon “system on a chip” line. Even a vertically integrated player such as Apple chooses Qualcomm’s modems to go into its iPhones. (Qualcomm usually works with big guys such as Samsung, but it started its own reference-design program similar to MediaTek’s in 2011.)
Credit: MAURICE TSAI/BLOOMBERG
While Qualcomm holds the lead in modem technology, MediaTek is spending a lot of money to catch up. In the past year it’s opened research-and-development offices in Bangalore, Finland and San Diego, where it’s a 15-minute walk from Qualcomm’s front door. #$%$ expects that in a year MediaTek’s LTE modems will be competitive with Qualcomm’s. In its new line of chips for higher-end phones called Helio, the LTE modems are equipped with “World Mode,” which allows the phones to work on most carrier networks in other countries. Right now MediaTek is going through the certification process with telecoms Verizon, AT&T and T-Mobile so it can sell its phones on their LTE networks in the U.S.
MediaTek is already the second-largest maker of LTE modems, according to research firm Strategy Analytics. Until 2013 Qualcomm controlled 95% of the market. But last year its share was down to 66% of the $22.1 billion market, with MediaTek next at 17%. Next year MediaTek aims to capture more than 40% of the LTE market in China, and analysts at UBS and elsewhere believe that many of China’s high-end phonemakers will switch from Qualcomm’s Snapdragon series to MediaTek’s offerings.
Qualcomm doesn’t seem worried. “The chip business has always been ultracompetitive,” says its vice president of worldwide marketing, Tim McDonough. “LTE is key for us, because we’ve invested heavily and maintain a significant advantage.”
One of MediaTek’s best bets for breaking into the U.S. and Europe is to piggyback on up-and-coming Chinese phonemakers. Over the next several years we’ll likely see a consolidation in China’s smartphone market, with the winning outfits bringing their products to the U.S. and Western Europe, says UBS analyst Eric Chen. The most likely candidates are Xiaomi, Huawei, OnePlus, Lenovo and Coolpad, and most of these have plans to enter the U.S. market soon, if they’re not already there in some limited fashion. “Today, when people talk about global brands, they’re talking about Apple and Samsung,” says Chen. “Going forward, people will have to look at what China is doing. For MediaTek the priority is quite simple: #$%$st tie up with China. It’s the only chance for MediaTek to go global.”
Emerging markets such as India and Africa also present opportunities for MediaTek, but the potential profits are less than what the U.S. could produce. “In an emerging market it’s a volume story; in developed countries it’s about higher-quality products generating better profit margins,” says MediaTek’s chief financial officer, David Ku. “Both are important to us.” India is already MediaTek’s second-biggest market. “Qualcomm’s chips are better, but at MediaTek’s low price they can get wider adoption in emerging markets,” says Mark Li, a researcher at Sanford C. Bernstein & Co.
“King of the Bandit Phones”: Chairman and CEO Tsai Ming-Kai. Credit: BRENT LEWIN/BLOOMBERG
Being in the smartphone game isn’t easy. Chipmakers Broadcom and Texas Instruments got out in recent years. Nvidia said last month it would sell its smartphone-modem business. “It’s a horror show,” says Bernstein researcher Stacy Rasgon about the phone market. “The guys who are left are very motivated–and some aren’t motivated by money.” Profit margins for MediaTek and Qualcomm are getting crunched as China works to build its own chip ecosystem with government-backed chipmakers such as Shanghai-based Spreadtrum. Then there’s Intel, desperate to find its way into phones after losing out in the first wave of the smartphone boom and not afraid to lose billions in the process. (Intel’s mobile unit lost $4.21 billion last year.) Intel has invested $1.5 billion in Spreadtrum-owner Tsinghua Unigroup for a 20% stake.
The growing battle with Qualcomm is charging up the troops at MediaTek’s headquarters, south of Taipei in the Hsinchu Science Park. In the cafeteria young engineers in sweatshirts huddle together over hamburger plates and bowls of beef noodle soup. But even as MediaTek looks to move upmarket, its traditional business is having trouble, and a huge jump in R&D spending is cutting profits. Net profits are expected to fall 15% this year, to $1.3 billion, on a 5% increase in revenue, to $7.4 billion. MediaTek’s stock is down more than 11% this year.
But Qualcomm may be facing even more severe headwinds. Its biggest customer, Samsung, opted for its own internally developed application processor in its Galaxy S6 phone over Qualcomm’s Snapdragon line.
For the next few years the world will be looking to China for the next big thing in smartphones, and MediaTek and Qualcomm will be duking it out. “Qualcomm will do whatever it can to maintain its market share,” says MediaTek’s Ku, “and we will do whatever we can to gain more market share.”
Qualcomm: Drexel Cuts to Sell as Apple, Others Demand Price Breaks
By Tiernan Ray
Shares of wireless chip giant Qualcomm (QCOM) are down $1.01, or 1.6%, at $63.66, after Drexel Hamilton’s Rick Whittington this morning cut his rating to Sell from Hold, warning of rising competition, while also trimming expectations for Micron Technology (MU) and writing of multiple challenges for Intel (INTC).
Whittington, cutting his Qualcomm target to $55 from $60, writes that customers, including Apple (AAPL), are demanding price concessions, he believes, which could hit September earnings:
We’re cutting forward estimates beginning Sep. 2015 FQ4 to reflect lower gross margins as Qualcomm fights to retain sockets and market presence. A blend of pricing concessions between chipsets and license royalties could take margins and earnings well beneath prevailing Street views.
Samsung Electronics (005930KS), which already rejected Qualcomm’s latest apps processor in the latest flagship phone, the Galaxy S6, is looking to make inroads in chips against both Qualcomm and Intel, he writes:
Apple and Samsung putting on the heat, smaller China mobile OEMs are also requesting price breaks as Samsung and Intel get more aggressive. Samsung baseband and app. processors being offered at advantageous terms to outside OEMs comes after of aggressive Intel mobile pricing. 14nm logic hitting yield milestones, Samsung is turning up the heat on Intel and Qualcomm in a quest for domination well beyond memory.
A lot hangs on new process technology work with Taiwan Semiconductor Manufacturing (TSM):
Apple sharing similar views on how Qualcomm prosecuted a once commanding patent portfolio is also requesting better pricing. Leading edge no longer available from long-time foundry TSMC and not wishing to rely on Samsung, Qualcomm has struck a China accord. Just where last week’s announced 14nm process development deals go, they’re liable to take time to bear fruit, TSMC 10nm at best two years out
Maybe they wanna keep it and give it to their kids and kids kids-know one knows unless they reveal to public-otherwise pure speculation. Maybe it's just a dream some shareholders tend to have just so they can make quick few $ps then move on to a better trading stock-maybe? Maybe, maybe, maybe this and maybe that-what if-coulda shoulda-if only-all that kinda speculation-guess it's ok to dream either way though. IMHO Anything and just about everything is POSSIBLE isn't it after all? :)
After hour, quite few blocks added to more than 1.5m #$%$ closing there was a block of 875000 @6.14. Today's trade will not be settled until 7-1-15. 6-30-15, quarterly institutional report may not reflect these trades( I am not sure about the filing rules here).
I remember when he sold Electronics Boutique to Gamestop. That was huge for the family.
I have no doubt they would sell Amkor - but just need a willing buyer and a willing seller at the right price. The Board and family are really aging now (no offense meant), so I am sure they would love a sale. But not at this $6 level. $12 or $15, I would say probably.
Years ago the founder sold a gaming retailer he started for over a billion dollar profit. Not saying we are going this way but Kim has done pretty well. Maybe post the Korean build out he will be motivated to sell. Just a possibility.