According to Jon Peddie Research, 4.9 million professional graphics cards were sold in 2013. AMD accounted for 20% of the market and shipped 0.98 million professional GPUs (20% of 4.9). We estimate the global professional GPU market to increase to 5.2 million units in 2014. If AMD’s professional GPU market share rises to 30% (as predicted), then it implies that the company will sell 1.6 million GPUs (30% of 5.2), half a million more compared to 2012. Assuming that the entire increase is attributed to the Apple MacPro deal, this implies that Apple will be selling a quarter million MacPro’s (0.5 million divided by 2, since each MacPro uses dual GPUs) this year.
Considering that the current demand for the new MacPro is outpacing supply by a wide margin, we don’t think selling a quarter million unit of the new MacPro is an unachievable target. The MacPro is a fast selling product and has a current waiting period of 5-6 weeks. 
In the past, Apple has shifted between Nvidia and AMD graphics in the consumer space. If AMD manages to hold onto the Mac Pro deal, it stands to gain significantly in the long run. If the company also manages more design wins with Apple for its consumer products ( iMacs, Mac mini, Macbooks) in the future, it can gain additional share in the market. We estimate the professional graphics segment to account for 7% of AMD’s valuation.
AMD may reach 30% share in professional GPU market in 2014
Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Monday 23 December 2013]
AMD may reach a 30% share in the professional graphics card market at the end of 2014, up from around 20% currently, because Apple has turned to adopt AMD's FirePro graphics cards for it new Mac Pro products, according to sources from the upstream supply chain.
The market share rise is also expected to boost AMD's profitability in the year, the sources noted.
The new Mac Pros have two workstation-level FirePro graphics cards.
As for server-related products, both AMD's FirePro S10000 and Sky series GPUs adopt PCI Express Gen3, while Nvidia's Tesla K20C is currently still using the PCIe Gen2. Meanwhile, AMD's GPUs adopt OpenCL, an open platform, while Nvidia uses its closed CUDA platform, the sources noted.
Altera gave a brighter forecast than rival Xilinx (XLNX), which expects revenue to be flat to up 4% sequentially next quarter. We continue to believe that healthy PLD demand from the Chinese 4G LTE buildouts will be a key driver for Altera for the foreseeable future. We believe the shares are attractive at the moment, trading at a discount to our fair value estimate.
Engineers tend to become trained and well versed in programming PLDs from a specific vendor and will often stay loyal to a company's products because of the familiarity they gain with the software and design tools of that particular platform.
In addition, once an electronics maker has chosen a PLD for an application, it will tend to stick with the chip because it would have to redesign its products in order to switch logic devices. These dynamics keep lesser PLD competitors at bay and also make it difficult for customers to switch between Altera and Xilinx.
Additionally, the initial up-front costs of developing cutting-edge ASICs have risen exponentially as semiconductor technologies advance. As a result, the volume necessary to make ASICs cost-effective has grown substantially, which in turn has expanded the market opportunities for PLDs. This trend has allowed the PLD segment to outgrow the overall chip industry and will provide significant tailwinds for Altera.
As mentioned, if you are not in the company's record books on the date of record, you won't receive the dividend payment. To ensure that you are in the record books, you need to buy the stock at least three business days before the date of record, which also happens to be the day before the ex-dividend date.
Tailwind From China Propels Growth for This Chipmaker
Altera (ALTR) reported strong first-quarter results, thanks to higher demand for programmable logic devices from the 4G LTE wireless infrastructure buildout in China. We are maintaining our $41 fair value estimate and narrow Morningstar Economic Moat Rating.
For the quarter, revenue was $461 million, up 1% from the fourth quarter and an increase from sales of $411 million in the year-ago quarter. First-quarter sales exceeded the firm's January outlook of down 2%-6% sequentially, thanks to strong wireless telecom spending on 4G LTE infrastructure buildouts in China. The Chinese LTE buildouts helped increase PLD sales to the telecom and wireless segment by 14% quarter over quarter. Telecom and wireless is Altera's largest end market and accounted for 49% of total revenue in the quarter. As for the other end market segments, sales to industrial, military, and automotive customers grew 1%. However, revenue fell 20% and 3% quarter over quarter in the networking, computer, and storage segment and the other segment, respectively. Altera achieved a gross margin of 67.1%, down from 68.3% in the fourth quarter, because of product mix associated with higher telecom and wireless PLD sales. Operating income came in at $135 million versus $117 million last quarter.
For the second quarter, management looks for revenue to grow 2%-6% sequentially, as it expects further growth in the telecom and wireless segment as well as the computer and storage end market. However, it anticipates the industrial, military, and automotive segment to decline while the other segment remains flat. Altera gave a brighter forecast than rival
The company also recently declared a quarterly dividend, which is scheduled for Monday, June 2nd. Stockholders of record on Monday, May 12th will be given a dividend of $0.15 per share. This represents a $0.60 dividend on an annualized basis and a yield of 1.84%. The ex-dividend date of this dividend is Thursday, May 8th.
•Declaration date - This is the date on which the board of directors announces to shareholders and the market as a whole that the company will pay a dividend.
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Why All These Dates?
Ex-dividend dates are used to make sure dividend checks go to the right people. In today's market, settlement of stocks is a T+3 process, which means that when you buy a stock, it takes three days from the transaction date (T) for the change to be entered into the company's record books.
As mentioned, if you are not in the company's record books on the date of record, you won't receive the dividend payment. To ensure that you are in the record books, you need to buy the stock at least three business days before the dat
The 13 year ban on video game consoles in China has ended, but it’s taking a while for companies to be able to capitalize on the reversal. Things are especially tough for Microsoft MSFT -0.27%, not based in nearby Japan like Sony or Nintendo , but they’ve just announced when the Xbox One will make it to Chinese shores.
The console will arrive this September, thanks to their partnership with BesTV which will take advantage of the Shanghai Free Trade Zone to make systems and games to sell to China. This news actually means the Xbox One could beat the PS4 and Wii U to China, making it the first foreign console to (legally) arrive in the country in over a decade.
Before Microsoft fans start celebrating that opening up the Xbox One to China will allow it to surge ahead of the PS4 with a billion new potential customers, things are likely to be far more complicated than that.
In fact, QQ reports that BesTV and Microsoft are only expecting to ship 100,000 Xbox Ones to China this calendar year. It’s not exactly as if the floodgates open and repressed Chinese consumers will suddenly all run out to buy $500 consoles, particularly since PC and mobile gaming is already massively popular there, and a huge black market exists for consoles and games already.
There hasn’t been an official price announcement yet as to whether the Xbox One will indeed cost the equivalent of $500 USD in China. Though there were a few hints that games themselves might be cheaper than in the rest of the world. They may be sold for about 300 RMB, which would be less than $50 each.
China is also practically a different planet in terms of market. Microsoft, BesTV and other partners will work together to make new games exclusively aimed at Chinese consumers. One subsidiary, E-Home Entertainment, had their chairman explain what’s to come in terms of game production:
“Via our cooperation with the world’s leading team, we will continue to develop video games fused with Chinese culture and provide further
The company's high-end chips for smartphones also faced increasingly tough competition in China, which led to the reduced profits and revenue in the first quarter.
Some analysts also suggested Broadcom could sell its struggling mobile and wireless business, which posted an operating loss for the first time since 2009 in the first quarter.
"Over the past 12 months, [Broadcom's mobile and wireless] revenues declined by 4%, and its operating margins declined by 1,600 basis points to 6%," Jefferies said in a research note. "Management is conceding connectivity share loss in midrange smartphones, and new cellular LTE products won't ramp until the second half of 2014...In the event Broadcom fails in cellular, we would expect them to either divest the business or shut it down."
Financial results from Irvine, Calif.-based Broadcom Corp. (Nasdaq:BRCM) remain frustrating. While the company's networking business is performing exceptionally well and the broadband business is also quite solid, the company continues to pay the price for tilting at mobile windmills. Management may be reluctant to turn its back on what looks like potentially billions in mobile/wireless revenue, but ongoing losses from these efforts will likely continue to weigh on a fair value in the mid-$30s.
Reasonable Results For Q1, But With Caveats
All told, Broadcom delivered a pretty good quarter. Revenue was down 1% year over year and down 4% sequentially, but still a bit higher than the sell side expected. The devil is in the details, though, as mobile/wireless remains weak (down 15%/down10%) and weigh on good broadband results (up 4%/up 2%) and infrastructure (up 35%/up 1%).
Margins, too, were better than expected but on the back of good results outside of mobile. Gross margin improved 20 basis points from last year and declined 40 basis points sequentially, but came in about 30 basis points better than expected. Operating income fell by double-digits (down 19% year on year and down 14% quarter over quarter), but was about 14% better than expected. The problem here again was the mix; the margins in networking have become exceptional (around 35%) but the company continues to lose money on its mobile/wireless business.
Not surprisingly, guidance was also mixed. Revenue for the next quarter was trimmed slightly and margin expectations were raised, but management reduced and pushed out expectations for the mobile business.
Broadcom traditionally doesn’t announce products until they’re sampling or shipping but with the goal of investor transparency let me share our plans for the next couple of quarters. Between Q1 and the summer, we expect to have taped out a new family of LTE advanced products. These new products will include five mode support with TDS-CDMA so we can better penetrate the China market. They will also include carrier aggregation and support for at least Cat 6. Our leadership products will enable performance levels not yet announced by others including Cat 7 and Cat 9 and 10, which supports downstream data rates of up to 450 megabits per second and upstream data rates up to 100 megabits per second. SoCs will include multi-core 64 bit processors that clock at least 2 gigahertz, advanced multimedia subsystems and integrated LTE advanced modems. Based on preliminary feedback from customers, we believe these will be truly leading edge products.
Our job is to deliver these products to customers who are now making design decisions for the next generation of LTE smartphones. Over the next few quarters, we should have greater visibility into the design win momentum that our new products will garner, although one or more key design decisions could be determined in the nearer term. Consistent with what I said at Analyst Day we will continue to monitor progress to milestones to ensure that our cellular investments are on a path to create sustainable shareholder value. I’m proud of what our engineers have accomplished and I believe these forthcoming products will favorably surprise quite a few people.
The Renaissance or X Nokia modem team is really, really good team. And I think that we’ve seen a number of things as a result of that acquisition. One is very strong creditability with customers and carriers. This is a team that’s been working on this stuff for decades. These guys invented LTE and so that strength of technical ability and creditability has really helped us in terms of working with carriers, in terms of working with customers. And the team has executed really well. I think everybody was concerned whenever you do acquisition, will the group perform and that acquisition has gone very well. That team executes well and we’ve been able to bond that together the pieces of the Broadcom team to provide the rest of some of those advanced LTE features and fill out the product set. So I am very happy with the engineering team from Renaissance. They’ve done a great job. And I think the strength of these products that we’re coming out with over the next quarters is definitely due to not only the strength we had here at Broadcom but exceptional team at Renaissance. And again I am proud of this guys and the products will probably surprise some people. No one else has yet talked about Cat 7, Cat 9 and Cat 10 products. And so for us to talk about that today shows the confidence we have in able to do advanced LTE products.
In terms of LTE design wins, we are engaged with multiple customers. We have multiple design wins. And in terms of the progress on our LTE milestones, we think we’re doing quite well on the technical milestones.
there are a lot of design wins in play right now with key customers and so I think an opportunity for us going forward.
We do continue to see the business as more backend focused into second half of this year and so we do some design wins ramping there. And I think if those design wins ramp strongly, we should see certainly an improvement on the bottom line. So assuming again we do see that ramp, I’d say definitely we should see some pickup in the second half.
So most of that strength will probably at 2015 as some of these new ones you’re alluding to will show up. Thanks for that. And then, a large base of your investors that are holding the stock on the idea that you will exit modems eventually. I know you’ve had lots of those conversations in last say year or so. You talk in general but you want to make profits in any business you’re in and this one’s not doing it now. What timeframe are you looking at to decide whether or not this makes any sense? You had the one business for quite a well now. Are we talking about next for 2014? Are you going for another two years to make a decision whether or not this is going to work or? And is it strictly profits or were you willing to move closer to breakeven if you saw some pull through connectivity and you’re gaining some share there? Thanks.
We haven’t given a specific timeframe. We’ve instead said that there are some milestones that we put forward that we track and again there are technical milestones, there are customer earned milestones and then there are economic milestones that we look to -- in terms of can we create economic value and shareholder value with these products. And again, that’s no different than for any of rest of our products that we look at that. And certainly right now we believe that there is a tremendous in this business. And if we succeed in getting strong design winds with the products that I mentioned in the conversation, we could have a good business here. If we don’t see customer traction on those products and we don’t find the market attractive, then that would lead us to a different conclusion. So for me it’s very important to see how these products do over the next few quarters and I think that’s what I am looking for in terms of seeing whether we create economic value here. But again, these are pretty interesting products and I wouldn’t second guess them. And on the other hand we’re going to do the right to create shareholder value. We are saying we are going to do what’s rights for our shareholder in the end here.
McGregor said that the company has mobile phone chips that will work on the new long-term evolution standard coming to market this year. The success of those products and the economic viability of the unit will determine whether Broadcom continues to invest or shut it down.
“We don’t do businesses to lose money,” McGregor told analysts on a conference call. “Right now it’s too early to call.”
Gross margins, a key measure for technology companies, are projected to be in the range of 53.2% to 54.2% for the current quarter, up from 52.2% in the March quarter.
Spending on research and development is projected to be between $701 million to $721 million, compared to $706 million in the recently ended quarter.
St loves GM expansion by 1-2 bps. Stock should go up tomorrow.
If MW is sold, stock could exceed $50.
Chip maker Broadcom (BRCM) this afternoon reported Q1 revenue and earnings per share that topped analysts’ estimates, and a forecast for revenue this quarter more or less in line with consensus.
Revenue in the three months ended in March rose to $1.98 billion, yielding EPS of 51 cents.
Analysts had been modeling $1.96 billion and 46 cents per share.
Product gross margin, on an adjusted, non-GAAP basis, was 52.2%, down from last quarter’s 52.6%, but the same as a year earlier.
CEO Scott McGregor remarked that the company benefitted from “strength in broadband and infrastructure, stronger-than-expected gross margins, and continued operating expense discipline.”
“In the current quarter, we expect momentum in Infrastructure and Broadband to continue, driven by service provider spending on network build outs and technology upgrades.”
Further results are available in an investor slide download on the investor relations Web site.
For the current quarter, the company sees revenue of $2 billion to $2.1 billion, versus consensus for $2.07 billion. Gross product margin on an adjusted basis expected to rise by 0.75 to 1.75 percentage points.
Broadcom shares are up 11 cents, or 0.4%, at $31.25, in late trading.
Advanced Micro Devices Inc. (NYSE: AMD) still is enjoying an ongoing love-hate relationship with Wall Street. While a lack of PC growth is a negative for the company, its specialty chips used in gaming consoles and other devices are well liked and very profitable. It was recently confirmed that soon-to-be released AMD-powered desktops and notebooks will have pre-installed custom BlueStacks Android emulator. This will let customers enjoy the full Android OS experience at no extra charge, and that could be big for the company. The Jefferies price target is set at $5.50. The Thomson/First Call estimate is $4.04. AMD closed Monday at $3.71 a share.
Update: The all new Broadcom BCM4354 MIMO 5G WiFi 802.11ac / Bluetooth 4.0 / FM Radio Module has been added as the Combo-Radio Design Win of the Samsung Galaxy S5 Teardown. This is the next evolution of the extremely successful Broadcom BCM43xx series of combo-radios. -- Joel Martin, 4/7/14 3:45pm PT
Other design wins embraced chips in our Galaxy S5 SMG900H model, including the Skyworks SKY77615 GSM power Amp, the Wolfson WM5110E Audio Hub codec, Maxim’s MAX77804K Power SoC, STMicroelectronics' LPS25H Pressure Sensor, Yamaha’s YAS532B 3-axis electronic compass, and Broadcom’s BCM4753GPS receiver.