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Lattice Semiconductor Corporation Message Board

  • pacinc3 pacinc3 Jan 16, 2013 6:12 AM Flag

    SWKS, AVGO, QCOM Best Port in Rough Telco Climate, Says Lazard


    From Barron's; 15-Jan-13:

    SWKS, AVGO, QCOM Best Port in Rough Telco Climate, Says Lazard
    By Tiernan Ray

    Lazard Capital‘s chip analyst Ian Ing today writes that he expects “a disappointing start” to earnings season for communications semiconductor stocks, suggesting that the best investments are wireless chip makers such as Skyworks Solutions and Avago Technologies (AVGO), while stocks pegged to a recovery in carrier spending should be avoided.

    Ing describes how his “checks” suggest there’s little hope of a pickup in telecom worldwide this quarter, and any return in carrier spending is likely to be slow this year:

    Based on our checks into OEM and carrier customer engagement teams, we see little global telecom uptick in Q1 for both wireless or wireline. Additionally, our distributor checks suggested flattish industrial markets in Q1 (off a disappointing Q4) […] While end markets likely improve from here (China, US improving), we expect the recovery to prior peak ’11 estimates to be slower and more gradual than expected. In this environment, we believe it is better to reap recent leading-node investments (Qualcomm (QCOM), AVGO, SWKS) than continue to sow and spend at nextgen (Altera (ALTR), Xilinx (XLNX)). Telco spend should increase, but 1H13 could start out slowly. Catalysts would include deploying recently acquired spectrum to improve user throughput (via carrier aggregation/ supplemental downlink) which should help drive deployments. Too early to rotate from wireless to infrastructure: We believe the rotation from wireless devices to infrastructure is too early, as wireless remains strong, led by multiple applications for wireless modules (IoT appliances, M2M, etc.) and infrastructure spending remains muted.

    Ing maintains a Buy rating on Skyworks, Qualcomm, Avago, Silicon Labs (SLAB), Semtech (SMTC), Cypress Semiconductor (CY), and Lattice Semiconductor (LSCC). He cut shares of Altera from Buy to Neutral today.

    Ing has a $30 target on Skyworks, a $44 target on Avago, and a $79 target on Qualcomm.

    (At least LSCC maintains a 'Buy' rating while ALTR is cut to Neutral. Also, so PT for LSCC ??)

    We'll see next Thursday, 24-Jan, just what goes where.

    Sentiment: Strong Buy

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