|Bid||51.95 x 0|
|Ask||52.35 x 0|
|Day's Range||51.55 - 54.75|
|52 Week Range||43.34 - 115.00|
|Beta (3Y Monthly)||-0.02|
|PE Ratio (TTM)||524.00|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
(Bloomberg) -- European technology stocks reached the highest level since June 2018 after the U.S. and China signaled a truce in the trade dispute, and the U.S. said it would permit some companies to do business with blacklisted Huawei Technologies Co.Chipmakers in Europe have taken a hit since the U.S. blacklisted China's Huawei and scores of its affiliates around the world in May. That decision also exacerbated trade tensions between the U.S. and China, hurting chipmakers since China is a key end market for their components. Two silicon wafer companies, the U.K.’s IQE Plc and Germany’s Siltronic AG, both warned last month about the impact of the ban, and the broader effect of the trade war on the semiconductor sector.The Stoxx 600 Technology sub-index rose as much as 2.5%, the most intraday since April 24, with semiconductor firms leading the charge. AMS AG, STMicroelectronics and Infineon Technologies AG all surged, as did chip equipment makers like ASML Holding NV and ASM International NV.Conversely, telecoms equipment groups Nokia Oyj and Ericsson AB have benefited from the blacklisting of Huawei as it removed a key competitor for contracts to build the next generation of 5G mobile networks. Those two were among the worst performers in a mostly green tech sector on Monday morning.Here’s what analysts are saying:CowenCurtailing restrictions on Huawei “could temporarily improve sentiment” on the semiconductor capital equipment group. Although most of these companies, such as ASML and Applied Materials Inc., don’t sell directly to Huawei, they’ve been affected by recent semiconductor supply chain disruptions, the analysts said.Morgan Stanley“A resumption in trade talks is a step in the right direction, although it will not cure the fundamental problem of weaker demand and excess inventory that continues to plague semis. A resolution on trade could provide an important catalyst to help demand, but as of right now it feels like status quo.”Oddo“The readacross is positive for the smartphone market and the semiconductor market as the U.S. and China converge toward a deal. The halt on additional tariffs should also bring some stability to the semiconductor market.”Liberum“These moves are positive for the entire tech industry, especially semiconductor suppliers. The semiconductor down cycle is currently at its trough” with a new up cycle expected to start from the second half of the year, the analysts said.“The removal of sanctions on Huawei and the holding off of additional tariffs is likely to strengthen the recovery in coming months.’’New Street“First of all, it is worth noting this is not a full lift; tensions will remain. Second, it means China will accelerate the development of alternative supply chains and ecosystems. It means investments will probably accelerate, to the benefit of the semicap equipment industry.’’“On the 5G front, it means things will get back into motion. Huawei will likely lose some market share in Europe, where operators will continue to buy from Huawei but reduce exposure to the vendor, while European players will likely lose ground in China in similar magnitude.’’Baader Helvea“The positive element certainly is Trump’s softened stance on Huawei, which has not been expected ahead of the meeting. This may raise hopes that a technology war can be averted. However, the Huawei issue will probably be part of any trade deal and may only be addressed at a later stage when other stumbling stones have been resolved.’’(Adds analyst comments.)To contact the reporters on this story: Sam Unsted in London at firstname.lastname@example.org;Kasper Viita in London at email@example.comTo contact the editors responsible for this story: Beth Mellor at firstname.lastname@example.org, Monica Houston-WaeschFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Ten months ago, I warned that storm clouds were brewing over the global technology industry. The situation today is much worse.Back then, a U.S.-China trade war was more risk than reality, Apple Inc.’s pending iPhone update held promise, and central banks were still in tightening mode. Yet inventories at the end of June 2018 had climbed to the highest since the financial crisis a decade earlier and a sector-wide slowdown was looming.At the time, the Pollyannas were louder than the Chicken Littles. The next iPhone had yet to launch and Christmas shopping season was coming, argued the optimists.Since then, global technology companies have issued loud warnings about lost sales due to U.S. actions against Huawei Technologies Inc. In short, because the U.S. is restricting what can be sold to the Chinese giant, the company and its suppliers are cutting orders. This is causing a ripple effect from semiconductor materials supplier IQE Plc to chip designer Broadcom Inc.But there’s something you need to know about the Huawei effect: It isn’t the cause of this technology recession. If anything, the company is the reason why the situation didn’t worsen earlier. The U.S. war on Huawei propped up the tech sector, notably semiconductors, over the past year.Let me explain. Immediately after the Trump administration in May blacklisted Huawei from buying U.S. components, Bloomberg News reported that the maker of telecommunications equipment and smartphones had been been stockpiling components in anticipation of some kind of action. Chairman Ren Zhengfei saw his own storm brewing and started saving for the rainy day that came on May 17.This tells us that some proportion of global component demand over the past year wasn’t led by end-product sales, but merely by shelf-stocking. More significantly, what revenue component makers did see was probably a false signal, pointing to demand that didn’t exist.These suspicions were confirmed earlier this month when Mark Liu, chairman of made-to-order chipmaker Taiwan Semiconductor Manufacturing Co., told me that he wasn’t sure how much of his company's recent revenue had gone to supplying Huawei’s end-product demand versus building the Chinese company’s inventory. Almost every technology company is a client of TSMC. If Liu, who has the broadest and deepest picture of the global tech sector, can’t make out the difference between demand and inventory build, then you can be sure he’s not alone.There’s also solid data to show the scale of Huawei’s stockpiling. Total inventories climbed 33% last year. Its stash of components – measured as raw materials and works in progress – jumped 76%. At even its most optimistic, there’s no way that Huawei expected 76% revenue growth this year.Which brings us back to the sector as a whole.Here’s an update of the numbers compiled 10 months ago, based on nine leading technology hardware companies and charted by my colleague Elaine He. The results aren’t heartening:With few exceptions, inventories – measured in dollar terms or days outstanding – climbed since June 30, 2018, and were unequivocally higher than two years ago. The revenue slowdowns that have affected every corner of the hardware sector this year make this buildup ominous.Of even greater concern are data pointing to prolonged cash conversion cycles, a measure of how long companies take to turn manufactured goods into money. The only firm to see a solid dip is Apple, and that’s because it tends to generate revenue from customers before having to pay suppliers. Both TSMC and iPhone assembler Hon Hai Precision Industry Co. (aka Foxconn) have said they hold inventory on their books for their key client. Were it not for that fact, Apple’s rising inventory days outstanding would probably be even higher.A major reason for Hon Hai posting weak earnings in the first quarter was inventory provisions. Those can be reversed if products sitting on shelves get sold to consumers, Hon Hai CFO David Huang told me this month. But shipping an already-made device to meet demand means you don’t need to manufacture a new phone, which in turn means no need to buy components from suppliers, and so forth.That’s the situation we’re in now: plenty of inventory, false signals from the Huawei effect, and a pending global economic slowdown that’s likely to suppress demand. If that doesn’t make make you worry about the state of global technology hardware, then I applaud your optimism. To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
IQE Plc warned on Friday that revenue for financial year 2019 would be lower-than-expected, as U.S. restrictions on China's Huawei caused more order delays and several of its chip customers cut forecasts. IQE, which makes semiconductor wafers for chips used in Apple Inc products among others, now expects revenue in the range of 140 million pounds to 160 million pounds for the financial year 2019, compared to consensus estimates of 175 million pounds ($221.97 million). The company said this was a larger impact than previously forecast for risks related specifically to Huawei, due to the far-reaching impact the sanctions have had on other companies and supply chains that are now becoming evident.
IQE, which makes semiconductor wafers for chips used in Apple products among others, said less than 5% of its financial year 2019 revenue was exposed to risk from the Huawei issue. "The recent ban on sales of products from US companies to Huawei and its affiliates is a factor completely outside of IQE's control ... we believe the ban will have a limited impact on our mid to long term revenue trajectory," Chief Executive Officer Drew Nelson said. The United States blocked Huawei from buying U.S. goods last week, a major escalation in the trade war between the world's two top economies, saying the firm was involved in activities contrary to national security.
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. To wit, the IQE plc (LO...
Smartphone makers, including Apple Inc and Samsung, have tempered their sales outlook as they wrestle with a worldwide slowdown in the market. IQE, which makes semiconductor wafers for chips used in Apple products among others, said full-year adjusted core profit fell 29 percent to 26.4 million pounds in 2018, below its forecast in January of at least 27.5 million pounds. IQE shares, which have nearly halved in the past 12 months, fell more than 16 percent in early trading before clawing back some of their losses to trade down 9 percent at 75.21 pence.
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Friday's announcement by IQE, which makes semiconductor wafers used in Apple Inc products, comes on the heels of warnings from the iphone maker and Samsung Electronics, as well as dismal forecasts from chipmakers ranging from South Korea's SK Hynix to U.S.-based Texas Instruments.
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Shares in Apple supplier IQE failed to recover from Monday's slide, after it confirmed that a major customer was materially reducing its shipments following a warning yesterday.
The British company joins a list of firms in Apple's supply chain that have warned on their profits, pointing to weakness in iPhone sales. IQE, which had already warned on results on Monday without issuing numbers, said it now expects to earn about 31 million pounds for the full year. The company did not name the chipmaker, but is a major supplier to U.S.-based Lumentum Holdings Inc (LITE.O) which slashed its forecasts on Monday and said that one of its largest customers would "materially reduce" shipments for the current quarter.
Apple supplier IQE on Tuesday said it expects full-year core earnings to be about 16.4 percent lower from a year ago after a major chipmaker in the 3D sensing technology supply chain reported a reduction in orders. IQE, which had warned on full-year results on Monday, said it now expects to earn about 31 million pounds ($39.92 million), after one of the chipmaker's largest customers said it would "materially reduce" shipments for the current quarter. U.S.-based Lumentum Holdings Inc, the main supplier of the Face ID technology used in the latest iPhones, cut $70 million off its revenue forecast on Monday.
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