|Bid||254.00 x 0|
|Ask||254.50 x 0|
|Day's Range||252.50 - 254.50|
|52 Week Range||206.50 - 270.00|
|Beta (3Y Monthly)||1.49|
|PE Ratio (TTM)||20.06|
|Forward Dividend & Yield||12.50 (4.96%)|
|1y Target Est||N/A|
Jul.19 -- Taiwan Semiconductor Manufacturing Co.projected current-quarter revenue ahead of estimates, as the Apple Inc. supplier shrugs off a smartphone slump and U.S. sanctions on Huawei Technologies Co. to ride demand for cutting-edge chips. Bloomberg's Selina Wang has the story.
(Bloomberg) -- In the semiconductor industry, bigger is not usually better. For 60 years, chip companies have strived to make the brains of computers as tiny as possible.Startup Cerebras Systems will turn this maxim on its head on Monday when it unveils a processor measuring roughly 8 inches by 8 inches. That’s at least 50 times larger than similar chips available today.The logic behind going big is simple, according to founder Andrew Feldman. Artificial intelligence software requires huge amounts of information to improve, so processors need to be as fast as possible to crunch all this data -- even if that means the components get really chunky.The company’s Wafer Scale Engine chip is large because it has 1.2 trillion transistors, 400,000 computing cores and 18 gigabytes of memory. (A typical PC processor will have about 2 billion transistors, four to six cores and a fraction of the memory).“Every square millimeter is optimized for this work,” Feldman said. “AI work is growing like crazy. Our customers are in pain.” The biggest limitation of current AI systems is that it takes too long to train software, he added.Feldman has experience and industry backing that’s essential to tackling an engineering problem of this magnitude, he said. He co-founded server maker SeaMicro Inc. and sold it to chipmaker Advanced Micro Devices Inc. for more than $300 million in 2012. Cerebras has raised over $100 million from Silicon Valley investors including Benchmark, Andy Bechtolsheim and Sam Altman. Feldman has a team of 174 engineers and Taiwan Semiconductor Manufacturing Co. -- Apple Inc.’s chipmaker of choice -- is manufacturing the massive Cerebras processor.Cerebras won’t sell the chips because it’s so difficult to connect and cool such a huge piece of silicon. Instead, the product will offered as part of a new server that will be installed in data centers. The company said it has test systems working at several large potential customers and will start shipping the machines commercially in October.The AI chip market includes Nvidia Corp., Intel Corp. and U.K. startup Graphcore Ltd. Google has been so keen to speed up AI progress that the internet giant developed its own special chips called Tensor Processing Units.Nvidia was the last company to successfully bring new semiconductor technology into servers, the machines that run data centers that Google, Facebook Inc. and others use to run internet services. Nvidia now gets almost $3 billion a year in revenue from the business, which took years and thousands of engineers to build, according to Chief Executive Officer Jensen Huang.“It takes a long time to be successful in data center,” he said in an interview last week.To contact the reporter on this story: Ian King in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair Barr, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Huawei Technologies Co. on Friday offered the first glimpse of an in-house software that may someday replace Google’s Android, an important step toward reducing its reliance on American technology.“HarmonyOS,” previously code-named “Hongmeng,” is a long-gestating operating system that could soon find its way into smart TVs and lower-end phones. The OS embodies Huawei’s shift toward self-reliance as American sanctions cut it off from vital technology, and escalating U.S.-Chinese tariffs jeopardize a carefully orchestrated global supply chain. Huawei’s efforts actually mirror Apple Inc.’s: to develop vertically-integrated supply and production lines that help reduce exposure to inclement market forces, unreliable suppliers and unpredictable events like international trade disputes.The newly hostile environment is putting to the test not just Apple’s “Designed in California, Assembled in China” slogan, but the overall preparedness of two smartphone-making giants as the decades-old made-in-China model fractures. Here’s a look at how dependent Apple and Huawei are on external suppliers.OS: Apple’s strength has always been the integration of software with hardware, and it has absolute control over iOS. Huawei is trying to do the same with HarmonyOS, but it has everything left to prove, starting today. For the foreseeable future, Huawei remains dependent on Android for its mainstream smartphones, especially outside China. Advantage: Apple.Software ecosystem: The enormous fortress of iTunes, the App Store and a dedicated following of enthusiastic app developers is a huge and profitable edge for Apple’s mobile business. Huawei will need developers to build valuable apps for its ecosystem, which is another major question mark. Advantage: Apple.Processors: Both design their own processors but neither controls their actual production. Instead, they rely on Taiwan Semiconductor Manufacturing Co. to put them together and on SoftBank Group Corp.’s Arm for the licenses they need to design semiconductors. Advantage: Neither.Memory and storage: SK Hynix Inc., Samsung Electronics Co. and Micron Technology Inc. anchor the two smartphone makers’ storage needs. The Korean duo have a significant lead on RAM modules. Neither Apple nor Huawei has the capability to produce their own storage chips, though Huawei recently launched the Nano Memory Card. Advantage: Neither.Display: Samsung is the biggest supplier of the organic light-emitting diode displays that Apple uses for its iPhone X and XS top-tier devices. Others such as Japan Display Inc. and LG Display Co. provide liquid-crystal display panels for the likes of the iPhone XR and earlier models. While Huawei is in much the same boat, it’s increasingly relying on home-team vendor BOE Technology Group Co. for its OLED panels, which are starting to win customers beyond China. In short, neither is capable of doing the manufacturing itself. Advantage: Neither.Modems: Essential to mobile connectivity, modems are only going to become more important with the transition to next-generation 5G technology. Apple recently agreed to buy Intel’s modem division, a step toward designing its own 5G chips. But Huawei is already among the leaders on this front, having announced the Balong 5G01 modem in February. As with processors, neither has its own silicon facilities so they’ll again be reliant on specialist foundries. Advantage: Huawei.Assembly: Apple and Huawei are heavily reliant on assemblers such as Hon Hai Precision Industry Co., also known as Foxconn. Both also tap other Taiwanese contract manufacturers -- such as Pegatron Corp., Compal Electronics Inc. and Quanta Computer Inc. -- to varying degrees, while Huawei also relies on Flex Ltd. But unlike Apple, which decided years to outsource much of its global production in China, Huawei operates a few highly automated lines to make top-tier P series phones. Advantage: Huawei.Others: Apple and Huawei rely on a plethora of companies elsewhere in their smartphone production. U.S. companies Skyworks and Qorvo provide radio-frequency modules to facilitate 3G and LTE communications. Dutch semiconductor company NXP is the go-to supplier of NFC parts required for contactless payments. Sony Corp. is the undisputed leader in camera sensors and modules. And Apple-funded Corning Inc. supplies toughened glass. Advantage: Neither.Apple and Huawei appear to be the brains orchestrating a huge, international body of engineering muscle. They design their own software, processors, modems and phones, but ultimately have to hand those plans off to a legion of transnational suppliers and manufacturers.(Updates with OS’s unveiling from first paragraph.)To contact Bloomberg News staff for this story: Vlad Savov in Tokyo at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The worst may soon be over for an electronics slump that has dogged Asia’s export-driven economies.Goldman Sachs Group Inc. economists said a rebound in technology exports is overdue, citing gradual improvement in South Korean trade and evidence the memory-chip cycle is reaching its low point.While South Korean semiconductor shipments plunged 28% by value in July, they rose 15% by volume. The nation’s inventories of semiconductors fell a second straight month in June, a sign that orders are picking up.“The question is when South Korea’s exports will bottom out,” said Stephen Lee, an economist at Meritz Securities Co. in Seoul. “It could be the third quarter, either August or September.”The slump in tech exports has been one of the biggest drags on Asia’s manufacturing base. Key gauges for factory sentiment continue to show contractions for output in Japan, South Korea, Malaysia and Taiwan. Real investment growth across Asia slowed to 2% in the first quarter from 7% a year ago, according to S&P Global Ratings.Industry announcements across Asia signal a possible recovery, which is good news for a region that accounts for more than 60% of global economic growth.Samsung Electronics Co., the world’s biggest memory-chip maker, said Wednesday that data centers -- its biggest customers -- have started buying again, causing demand to increase.The world’s largest contract chip maker, Taiwan Semiconductor Manufacturing Co., surprised analysts last month when it projected current-quarter revenue ahead of estimates. TSMC’s business has bottomed out and should begin to rebound, Chief Executive Officer C. C. Wei said. The Apple Inc. supplier sees “very, very strong demand” in the second half of 2019, he said.Smartphone DemandApple’s suppliers -- dominated by Asia-based factories -- are preparing to produce components for up to 75 million new iPhones in the second half, roughly the same number as a year earlier, Bloomberg News reported.Apple’s sales forecast of $61 billion-$64 billion for the current quarter not only topped analysts’ estimates but also signaled year-over-year revenue could grow, thanks to healthy demand for iPhones.Another reason for optimism is that Samsung will begin selling its Galaxy Fold smartphone in September. The world’s biggest handset maker hopes the foldable phones, coupled with fifth-generation wireless networks, will kick the mobile industry back into a boom by giving consumers a compelling reason to upgrade their devices.“It’s been pretty awful but probably not as bleak going forward as it has been,” Sian Fenner, lead Asia economist at Oxford Economics, said of the tech cycle.Early DaysFor sure, it’s too early to say for certain the worst is over.After all, Singapore’s electronics exports fell in June to their lowest since at least 1997. In Japan, shipments of electronic components and chip-making equipment to China both dropped by well over 20% in June.Tuuli McCully, head of Asia-Pacific economics at Scotiabank in Singapore, said that while the electronics sector may bottom late this year, “significant downside risks remain.”In addition to the U.S.-China trade war and a slowing global economy, demand for new smartphones is plateauing. Rising tensions between Japan and South Korea could also hurt. Japan has already slapped curbs on exports to South Korea of materials vital to manufacturing of semiconductors and displays, and things could get worse.“Even before the trade war hit, there was a bit of a moderation in the tech cycle,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore. “Smartphones have reached a saturation point.”Still, optimists argue that comparisons with robust growth numbers for electronics exports from a year ago is making the weakness look worse than it is.Beyond smartphones, Asia is also leading spending on the Internet of Things, accounting for around 36% of global spending this year, followed by the U.S. and Western Europe with 27% and 21%, respectively.“Initial shocks from the trade war might be behind us,” Goldman economists wrote in a note.\--With assistance from Debby Wu.To contact the reporters on this story: Enda Curran in Hong Kong at email@example.com;Michelle Jamrisko in Singapore at firstname.lastname@example.org;Sam Kim in Seoul at email@example.comTo contact the editors responsible for this story: Malcolm Scott at firstname.lastname@example.org, Henry Hoenig, Nasreen SeriaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The processor giant released a better-than-feared earnings report on July 25 that bodes well for the semiconductor industry’s second half of 2019.
(Bloomberg) -- Advanced Micro Devices Inc., the No. 2 maker of computer processors, gave a disappointing third-quarter sales forecast, indicating lower-than-expected orders for game-console chips from Microsoft Corp. and Sony Corp., two of its biggest customers.Revenue in the current period will be about $1.8 billion, Santa Clara, California-based AMD said Tuesday in a statement. That missed the average of analysts’ projections of $1.94 billion, according to a survey by Bloomberg. The company also pared its forecast for annual revenue, and shares tumbled in extended trading.Chief Executive Officer Lisa Su is trying to remake her company into more than just a purveyor of cut-price alternatives to Intel Corp.’s PC chips. While sales of PC-related products are improving, the company said revenue is taking a hit because demand from game-console makers is falling short of its original forecasts this year. In the second quarter, revenue in the division that includes server processors and custom chips for consoles declined 12%, AMD said.Console sales are dropping as the current versions of Microsoft’s Xbox and Sony’s PlayStation are in their seventh year of life and the companies have started talking about their replacements.Su, the chip industry’s first female chief executive officer, said her company is where she had hoped it would be in terms of unveiling competitive chips, and AMD is ready to take back share from Intel, whose products still garner 90% of revenue in the processor market. As the year progresses, she said, more of AMD’s recently announced chips will be available in electronic devices, boosting the company’s market footprint.“There’s a real pull for the products,” Su said. “I feel really good about the customer engagements.”The company’s second-quarter net income fell to $35 million, or 3 cents a share, compared with $116 million, or 11 cents, a year earlier. Excluding certain items, profit in the recent period was 8 cents, matching analyst predictions. Revenue in the period was $1.53 billion, 13% lower than a year earlier but topping analysts’ average projection of $1.52 billion.Gross margin, or the percentage of sales remaining after deducting the cost of production, widened to 41% in the second quarter, in line with the average analyst estimate. A year earlier, that measure of profitability came in at 37%.AMD said it now expects full-year revenue to gain at a percentage in the mid-single digits, compared with an earlier prediction for annual sales to rise in the high single digits. Analysts had projected an annual sales increase of about 6%. At the same time, the company slightly raised its forecast for gross margin for all of 2019, to 42%.The company’s shares fell about 5% in extended trading following the report, after earlier climbing 1.2% to $33.87 at the close in New York. The stock has been on a tear this year, gaining 83% so far.Last week, Intel gave an upbeat forecast and said second-quarter demand had exceeded its earlier outlook. Buyers of computer components stocked up ahead of the potential for tariffs to be levied on trade between the U.S. and China, Intel said. Still, executives warned that the temporary boost can’t be expected to continue. Demand for servers from corporations and government agencies was weak, particularly in China.Under Su, AMD has been staging a comeback in the lucrative business of chips for servers, machines that are the backbone of corporate networks and the internet. The company owned about a quarter of that market a decade ago, until delays to new chips and lagging performance allowed Intel to banish AMD to less than 1% market share. AMD’s new Epyc range of server processors is aimed at clawing back those lost orders.AMD is also trying to exploit Intel’s delays in shifting production to more advanced technology. AMD now outsources manufacturing of its best chips to Taiwan Semiconductor Manufacturing Co., which analysts calculate is now more than a year ahead of Intel in implementing new processes.Su’s efforts have had an impact. At the end of last year, AMD had 3.2% of the market for server chips, up from 0.8% 12 months earlier. AMD has made faster progress in laptops and desktop computers, where it has more than 10% share of shipments, according to Mercury Research.(Updates with CEO comment in sixth paragraph.)To contact the reporter on this story: Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The forecast for a chip industry recovery in the second half of 2019 is in doubt at the start of second-quarter earnings season. Chip stocks have rallied lately on hopes for a recovery.
(Bloomberg) -- Apple Inc.’s suppliers are preparing to produce components for up to 75 million new iPhones in 2019’s second half, roughly the same number as a year earlier, according to people familiar with the matter.The volumes planned for the next iPhone launch cycle would signal steady demand for the company’s most important product, despite U.S.-China trade tensions and a decline in the overall smartphone market. The Cupertino, California-based technology giant stopped divulging iPhone shipment numbers in the holiday quarter last year as unit growth turned negative and started providing metrics to highlight the growth of services such as Apple Music. Analysts estimate Apple sold 70 million to 80 million new iPhones in the second half of last year.The company’s Asian suppliers are gearing up to produce components for three new iPhone models to meet holiday-season demand, the people said, asking not to be identified citing internal estimates. The U.S. company’s Asian partners could ramp production up to 80 million new phones if needed, one of the people said. Main iPhone assembler Foxconn Technology Group has stepped up hiring in Shenzhen and is offering staff about 10% more than a year ago to secure a peak-period workforce, another person familiar with the matter said.The iPhone assembler Pegatron Corp. added to gains and closed 2.3% higher, while lens maker Largan Precision Co. rose 2.6%. Taiwan Semiconductor Manufacturing Co. pared earlier losses and closed unchanged.Apple has announced new iPhones each September since 2012 and the new models typically go on sale in the final weeks of that month. The company reports third quarter earnings on July 30, and the firm’s guidance could indicate its expectations for iPhone sales at the end of the fourth quarter ending in September. Apple still provides iPhone revenue figures, with the company generating $52 billion from iPhones last holiday quarter, a 15% decline, and $37 billion from new iPhones in the last fourth quarter, a 27% increase. Those numbers, however, include a mix of both last year’s new models and earlier versions of the iPhone.Jeff Pu at GF Securities estimates that shipments of newly released iPhones will rise to 74 million in the second half, up about 7% from his estimate of 69 million last year, while TF International analyst Ming-Chi Kuo forecast that Apple would sell 75 million to 80 million new iPhones in the second half of 2018. This year’s volumes may signal stabilization after a year of uncertainty, though that’s a far cry from the double-digit growth numbers of years past.Of course, the fact that Apple suppliers plan to produce parts for 75 million new iPhones doesn’t necessarily mean the company will sell that many. Apple will assess sales after launch and the total shipments may not reach that mark. The company declined to comment.Apple is struggling with soft smartphone demand as people take longer to replace their gadgets and Chinese rivals like Huawei Technologies Co. grab market share. The trade war is also denting Chinese economic growth while souring consumers there on American brands. Analysts have been betting on a 13.3% drop in iPhone shipments to roughly 189 million in fiscal 2019, according to average projections compiled by Bloomberg.“Apple’s growth has become more cyclical and slowed along with the global smartphone market, leaving it dependent on iPhone upgrades to drive sales,” Bloomberg Intelligence analysts John Butler and Boyoung Kim said. “Apple’s inability to raise iPhone prices much higher is constraining growth. Weakness in China due to competition and the trade war with the U.S. remains an issue.”While Apple is relying on services to take up the slack, sales of the gadget remain its largest revenue driver and the U.S. company needs to get the latest devices into the hands of its users so they can actually download and subscribe to new services like the upcoming Apple Card, Apple Arcade gaming service, and Apple TV+, a Netflix rival.The major attraction in this year’s models lies in enhanced cameras: the two high-end models to replace the iPhone XS and iPhone XS Max will include three back cameras, up from two, and a successor to the iPhone XR will include a second back camera. The third camera will serve as an additional ultra-wide lens, Bloomberg News reported in January, allowing the phone to automatically repair parts of an image that may be initially chopped out of a frame. It will also enable a wider range of zoom. All three new models will also include faster A13 processors built by TSMC, Bloomberg News reported in May.Beyond the additional rear cameras, the new iPhone models will look similar to the 2018 versions, which looked like the 2017 iPhone X. Apple is planning a more extensive revamp of the iPhone with an updated design, 5G connectivity, and new augmented reality cameras for 2020, Bloomberg has also reported.Read more: Apple’s 2019 and 2020 iPhone and iPad PlansWall Street sentiment on Apple may be starting to brighten somewhat after a prolonged period of investor-pessimism. Morgan Stanley boosted its target price on the stock this week, days after another firm upgraded the shares. Apple may benefit from a U.S. ban on the sale of American technology to Huawei, not to mention Japanese exports curbs to Korea that threaten Samsung Electronics Co. Apple’s main chipmaking partner, TSMC, also helped allay fears of a protracted industry slump when it projected current-quarter revenue ahead of estimates. Longer term, investors hope Apple can rejuvenate its most iconic gadget.(Add share price changes in fourth paragraph.)To contact the reporters on this story: Debby Wu in Taipei at email@example.com;Gao Yuan in Beijing at firstname.lastname@example.org;Mark Gurman in San Francisco at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
IBD Stock Of The Day: VanEck Vectors Semiconductor ETF is in buy range, offering a way to play the chip stocks rally while limiting company-specific risk on names like Intel, AMD and Micron.
On July 18, TSMC reported its second-quarter earnings, which beat estimates and hinted that the worst could be over. TSMC's earnings guidance shows a similar picture. Before we discuss TSMC more, let's first understand what the company does.
Japanese stocks rebounded solidly on Friday from the previous day's tumble, as riskier assets got a lift after a senior Federal Reserve official bolstered expectation of a U.S. rate cut later this month, with the semiconductor sector leading the gains. TSMC, the world's largest contract chipmaker and supplier to Apple Inc, on Thursday posted a decline in second-quarter profit but said demand is likely to recover over the rest of the year, particularly from smartphone makers.
Taiwan Semiconductor Manufacturing, known as TSMC, on Thursday beat analyst estimates for sales in the second quarter and matched on earnings. The TSMC earnings news drove its stock higher.
One big options trader is looking for the next big thing in tech to drive a breakout in a major global chip stock. Taiwan Semiconductor Manufacturing (NYSE: TSM) is the world’s third-largest player after Intel Corporation (NASDAQ: INTC) and Samsung.
The chip manufacturing giant issued upbeat Q3 sales guidance and forecast this year's capital spending will be at the high end of a prior guidance range.
Starting on Monday, June 22, about 55% of the widely followed PHLX Semiconductor Sector Index (XSOX) reports earnings over the next two weeks, but that index and exchange-traded funds tracking it could ...