Humpty is not having such a good morning, down over a buck early on and the P/E (gasp!) dropping below 97.
I think a really interesting time is coming up as we have been told that TSMC will have 20nm production up and running in Q1 of 2014. Just around the corner really. So, soon we will have a real opportunity to see if the ARM marketing department really ever talks to the engineering department. I think not. As an astute poster on the Investors Hub message board noted - we hear two different stories. One reasonable one during the conference calls and a different one from the marketing people as supported by ARM-flappers like Nenni.
Everything we've heard about 20nm from the marketing people has been extremely positive - volume production coming up soon, it will ramp fast, I love you and the check is in the mail. We just haven't seen any evidence of this at larger nodes and I therefore see little reason to buy the hype at smaller, much more difficult and challenging nodes.
Not to be excessively repetitive (who wants to appear Grandpa Tiglet dysfunctional?), but we have compelling evidence that the fabless model is broken. TSMC's dividends have exceeded their free cash flow for the last 4 years. A sign that the breaking is not a new thing at all. So, the CapEx needs are more than they can reasonably handle.
It's all about the FinFET. Intel has it. ARM not. Trying to get to FinFET while trying to move the flawed 20nm node at the same time is something to advise the kids not to try at home.
Well, Intel up 6 cents and ARM down 98 cents. Humpty is slipping. The fall is coming.