58.61 +0.36 (0.62%)
Pre-Market: 9:15AM EST
|Bid||58.25 x 900|
|Ask||63.60 x 3000|
|Day's Range||58.25 - 59.52|
|52 Week Range||34.21 - 59.52|
|Beta (5Y Monthly)||0.60|
|PE Ratio (TTM)||26.12|
|Forward Dividend & Yield||2.42 (4.12%)|
|1y Target Est||55.78|
(Bloomberg) -- A Chinese chip designer who helped Bitmain Technologies Ltd. become the world’s largest maker of Bitcoin mining rigs before starting his own company has been arrested, according to three people familiar with the matter.Yang Zuoxing, a tech mastermind with Bitmain until June 2016, was detained by police in Shenzhen at the end of October in relation to a legal dispute with his former employer, said the people, who asked not to be identified discussing legal matters.Prosecutors in the city’s Nanshan district said in a Dec. 12 statement that Yang was arrested recently on suspicion of embezzlement, and that legal procedures were ongoing. The statement omitted the second of three Chinese characters that make up Yang’s full name, possibly to shield his identity. It didn’t mention Bitmain or MicroBT, the crypto-mining company Yang founded a month after quitting Bitmain.MicroBT has grown into a serious contender, clawing market share away from Bitmain with its Whatsminer equipment. While crypto-miner makers produce machines with similar specs and prices, they compete against each other for tight chip supplies from foundries operated by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.The arrest of Yang comes as competition between Bitmain and its rivals intensifies. While MicroBT’s flagship Whatsminer 20 series are the best-selling Bitcoin mining rigs so far this year, Yang’s absence has halted his company’s ability to make key decisions including on pricing, said two of the people.Representatives of MicroBT and Bitmain declined to comment. The prosecutors’ office in Nanshan didn’t respond immediately to a request for comment.Bitmain has waged several legal battles against prominent ex-staffers. In 2018 the Beijing-based company lost a court ruling against MicroBT over allegations that Yang’s startup infringed its patent rights. Earlier this year, Bitmain filed a lawsuit against three former employees who started rival mining pool Poolin for allegedly violating a non-compete agreement.An internal power struggle within Bitmain saw billionaire chief Wu Jihan kick co-founder Micree Zhan out of the company recently, and the company has been trying to tout new sales initiatives to lure new customers.Yang toldpreviously that he helped Bitmain design its highly sought-after machines, but he left the company after Wu and Zhan turned down his request for a stake in the business. Yang, the majority shareholder of MicroBT, graduated from Beijing’s prestigious Tsinghua University with a PhD in mechatronics before entering the chip-design industry.Read more: Ex-Bitmain Chip Designer Takes on Crypto’s Mining GoliathTo contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Colum Murphy, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- China has made developing its own chip industry a matter of patriotic pride. It helps that “China chip” and “China heart” sound the same in the local language. The strain of this 1.7 trillion yuan ($243 billion) endeavor may be too much for the debt-clogged arteries of its municipal governments, though.Over the past decade, Beijing hasn’t hesitated to deploy its fiscal might in pursuit of economic and social objectives. After the 2008 collapse of Lehman Brothers, the government spent 4 trillion yuan building roads and railways to bolster the economy, sending growth into overdrive. Between 2015 and 2018, authorities poured roughly 3.5 trillion yuan into shanty-town developments to aid the poor.Lately, fiscal spending has turned to loftier aspirations. With its national champions ZTE Corp. and Huawei Technologies Co. pinched by U.S. sanctions, China has become more determined to develop its own 5G, artificial-intelligence and chip technologies. More than 50 large-scale semiconductor projects have sprung up across the country, with a total of 1.7 trillion yuan of investment pledged, online media outlet Caixin estimates. Most of these multibillion-dollar projects will be state-financed. For instance, the government holds 74% of the equity in three-year-old Yangtze Memory Technologies Co. The company is managed by Tsinghua Unigroup Co., the business arm of prestigious Tsinghua University, President Xi Jinping’s alma mater. Yangtze Memory’s NAND memory technology shows potential, and is only half a generation behind the global flash memory leaders. Huawei subsidiary HiSilicon, meanwhile, is seen as a leading design house for smartphone applications.These promising examples are too few and far between, though. Elsewhere, it’s mostly too much effort for too little reward. China’s chip manufacturing technology is three to five years behind Taiwan Semiconductor Manufacturing Co., the world’s leading contract supplier, and the country is sub-scale in assembly and testing, industry experts say. Meanwhile, financial cracks are showing. A chip park in eastern China, with 4.5 billion yuan already spent, has ground to a halt after the impoverished municipal government failed to cough up more money, a Caixin investigation found. Another industrial park in the central city of Wuhan had its land usage rights frozen by a court because of financial difficulties. Wuhan has positioned itself as an inland technology hub in the mold of Phoenix, Arizona.As Korean and Taiwanese industry leaders know, chip manufacturing is a terribly expensive business. Samsung Electronics Co., for instance, splashed out about $25 billion annually in capital expenditure over the past five years. To catch up with TSMC’s leading-edge wafer capacity, a Chinese chip park needs to spend about $60 billion to $80 billion on equipment alone, Credit Suisse Group AG estimates. To make matters worse, bureaucrats from regions rich and poor are vying with each other to produce a national champion, seeing that the project is close to President Xi’s heart. As I wondered a year ago, what’s the advantage for Xiamen, a sleepy coastal city in southern China, or Guizhou, one of China’s poorest provinces, of getting into chip manufacturing? The result is resources spread too thin, wages bid up, and billions of dollars wasted in a business that’s all about scale.To be sure, bureaucrats the world over launch pet projects to please their bosses. But this chip craze begs the question of whether public funding is being properly used, especially as China’s economy struggles. The central government’s Big Fund and its clones aren’t dumb money — they will only finance true national champions such as Yangtze Memory; local industrial parks will have to be funded locally. The Tianjin government, for instance, doesn’t have the cash to bail out state-owned commodities trader Tewoo Group Corp., but nonetheless has a $16 billion fund for AI technology, another theme close to Xi’s heart.China’s local governments are notoriously poor: Municipals do all the dirty work of generating cash, but remit those funds to the Ministry of Finance, which then decides how to dole it out. As a result, even cities as wealthy as Beijing are deep in the red. As the economy slows and tax collection sputters, the situation will only get more severe. Local governments continue to spend more than they earn, with this year’s funding gap at 7.6 trillion yuan, Moody’s estimates. China’s desire for self-reliance is understandable. Last year, its trade deficit in chips widened to $228 billion, more than double what it was a decade earlier. Meanwhile, U.S. restrictions on exports of chip technology have provoked an intense nationalist backlash in China. Yet so far, this semiconductor drive has been all heart and no brain. To contact the author of this story: Shuli Ren at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Apple iPhone chip supplier Taiwan Semiconductor Manufacturing saw healthy sales growth in November thanks to strong demand for smartphone processors. TSM stock spiked to a record high.
(Bloomberg) -- Bitmain Technologies Ltd.’s billionaire Chief Executive Officer Wu Jihan is back in the driver’s seat following the ouster of his co-founder, touting new sales initiatives to attract clients as the company fends off rivals.Wu hosted a client meeting on Saturday, according to attendees who asked not to be identified because the event was private. It was his first public appearance since a power struggle six weeks ago when he announced as founder and chairman that his co-founder Micree Zhan Ketuan was no longer with the company. It also marked Wu’s re-emergence as the company’s CEO following his loss of control to Zhan, who had held de facto leadership from March until his resignation.Wu and other Bitmain executives announced at the event new sales initiatives to lure customers, including a promise to seek deposits as low as 20% for those who buy its Bitcoin mining rigs in large bulk, the attendees said. Usually, such deposits are 50% or full payment in advance is required. The latest models from Bitmain cost between $1,000 to $2,000. “The Bitmain you are familiar with is back,” read a presentation slide from the gathering, which took place in southwestern China’s Chengdu city, a hub for local miners. Nishant Sharma, a Bitmain spokesman, declined to comment.Bitmain revived plans for a U.S. listing earlier this year after its failed attempt in less crypto-friendly Hong Kong in 2018. The company, which was valued at about $15 billion in a private funding round last year, is grappling with intensifying competition from smaller rivals U.S.-listed Canaan Inc. and MicroBT.Canaan had a 22% market share of Bitcoin mining machines in terms of computing power sold in 2019’s first half, up from 15% for the same period last year, according Frost & Sullivan figures cited in Canaan’s IPO prospectus. While Bitmain and its major rivals produce machines with similar specs and prices, they live and die competing against each other -- and smartphone makers -- for tight chip supplies from foundries operated by Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.Bitmain’s two co-founders had long served as co-CEOs but they had been replaced this March by Zhan’s pick, Wang Haichao, as the company was grappling with lay-offs and a cash crunch triggered by Bitcoin’s price plunge. Wang is still employed by the company.In October, Wu announced Zhan’s resignation in a memo, warning employees against taking further instructions from Zhan or attending any meetings he convened. The two had started the mining gear company together six years ago.Saturday’s event reaffirms Wu’s control of the company. Fan Xiaojun, a long-time Bitmain sales chief who had been demoted by Zhan, showed up at the meeting and had regained his position, said the attendees. Bitmain also promoted Wu’s new crypto financial startup Matrixport at the event, they said. Right after Wu’s note about Zhan’s departure, Wu also announced his pick for the company’s head of human resources to replace Zhan’s appointee, according to a memo viewed by Bloomberg News.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
If TSMC makes good on its latest promise, it could hold onto its recently-won chip manufacturing lead for some time.
As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds' thoughts towards the market and […]
Shares of the Van Eck Semiconductor ETF (NYSEARCA:SMH) exchange-traded fund have had a monstrous run since making lows at the $80 area last Christmas. This ETF, which is comprised of the largest computer chipmakers, is up over 50% this year. This is double the impressive 26% total return of the S&P 500.Source: Shutterstock Certainly some of the outperformance was warranted, given the previous pessimism surrounding semiconductor stocks. The red-hot rally has now come too far, too fast though. Time for SMH to underperform over the coming weeks.SMH is comprised of 25 of the top chipmaking stocks listed on the U.S. exchanges. Taiwan Semiconductor (NYSE:TSM) and Intel (NASDAQ:INTC) are the two largest holdings and account for 25% of the overall weighting. As such, these two chip making giants have the biggest impact on the SMH.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Fundamentals of Semiconductor Stocks in the SMH ETFA quick look at the current fundamentals of Taiwan Semiconductors show valuations to be at an extreme. The price-to-earnings of 24.5 is at the richest multiple in the past 10 years and at a 50% premium to its 5-year average of 16. The price-to-sales ratio is now at a rather rich 8X, also a 10-year high by a wide margin. The price-to-book ratio just passed 5 for the first time in the last decade.Intel also just reached a new 10-year high on a price-to-sales basis with a reading of 3.7X. Its price to book is also at a similar extreme at 3.4X. Certainly not cheap on either a comparative or absolute basis. * 7 Companies Using Artificial Intelligence to Outperform the Market SMH reached extremely overbought levels on a technical basis before finally pulling back. The 9-day RSI breached the 70 level before turning sharply lower. Prior instances when this occurred marked significant short term tops in semiconductor stocks. MACD just went negative and issued a sell signal. Shares traded at a big premium to the 50-day moving average before finally turning lower.More importantly, SMH had a reversal day Tuesday. The semiconductor ETF tried but failed to make a new high by a penny, then reversed to close lower on the day. This type of pattern is many times emblematic of a short term top in the underlying. The buyers have finally become exhausted and the sellers have taken control. It is an even more powerful indicator given the strength of the previous rally in SMH and that it happened at all-time highs.The chart shows that prior instances when the SMH ETF reversed from overbought conditions led to a pullback to at the least the 50-day moving average -- or a further drop to the trendline. In this case, that equates to an initial downside target of $125 with an ultimate downside target of $120.Stock traders should use any strength to short SMH. A meaningful breakout to new all-time highs would be a viable stop out area. Downside profit objectives are at the previously mentioned $125 and $120 levels.Option traders should look to take advantage of comparatively cheap implied volatility (IV) at only the 17th percentile and buy a put diagonal. The Jan $127/Dec $125 is priced around $2.50. Maximum risk on the trade is $250 per spread. Ideally SMH clsoes near $125 at December expiration. the trade structure allows for additional selling of weekly options to further reduce the initial cost.As of this writing, Tim Biggam did not hold a position in any of the aforementioned securities. Anyone interested in finding out more about option-based strategies or for a free trial of the Delta Desk Research Report can email Tim at firstname.lastname@example.org. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Companies Using Artificial Intelligence to Outperform the Market * 7 Earnings Reports to Watch Next Week * 6 Retail Stocks Dropping Hard Ahead of Black Friday The post Time to Cash In the Chips on the Semiconductor Stocks appeared first on InvestorPlace.
The Zacks Analyst Blog Highlights: Intel, Advanced Micro Devices, Alphabet, Taiwan Semiconductor and NVIDIA
(Bloomberg) -- Applied Materials Inc. gave a sales forecast for the current quarter that topped analysts’ estimates, suggesting a slump in orders for chipmaking equipment is ending.The company is the largest maker of machinery used in the manufacture of semiconductors, which are among the most important parts of the electronics supply chain. Customers of the Santa Clara, California-based company include Samsung Electronics Co., Intel Corp. and Taiwan Semiconductor Manufacturing Co., giving it a reach that makes its results and forecasts an important early indicator of business confidence. Intel and other chipmakers order equipment months in advance of starting new factories and production lines.Key InsightsFiscal first-quarter sales will be about $4.1 billion, Applied Materials said Thursday in a statement. That compares with analysts’ average estimate of $3.71 billion, according to data compiled by Bloomberg.Adjusted earnings per share will be 87 cents to 95 cents, the company said. Analysts projected 75 cents a share.The results “reflect a healthy uptick in demand for semiconductor equipment, combined with strong execution across the company,” Chief Executive Officer Gary Dickerson said in the statement.Chip-equipment makers often experience wild earnings swings. Machines cost tens of millions of dollars each. Delaying factory build outs is one of the fastest ways a chipmaker can preserve cash when they’re unsure of future demand.Net income was $698 million, or 75 cents a share in the period ended Oct. 27, compared with $757 million, or 77 cents a share, a year earlier.Revenue was little changed at $3.75 billion. Analysts were looking for $3.68 billion.Stock ReactionShares rose about 4% in extended trading after the announcement. The stock closed at $56.96 in New York and has increased 74% this year.More InformationFor more details, click here.To see the statement, click here.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, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Nvidia's diverse portfolio of GPU functionalities gives me confidence that this firm is going to continue to impress the markets in the years to come.
(Bloomberg) -- Hon Hai Precision Industry Co. reported quarterly profit above analysts’ estimates, indicating solid demand for Apple Inc.’s iPhone 11 range.The assembler of most of the world’s iPhones and iPads posted net income of NT$30.7 billion ($1 billion) for the September quarter, compared with an average estimate of NT$27.7 billion.Apple last month forecast holiday revenue that surpassed Wall Street’s projections, suggesting healthy appetite for iPhone 11 models with lower entry prices and vastly improved cameras. It’s now said to expect iPhone shipments to return to growth in 2020 when it finally introduces its own 5G devices -- a boon to hardware suppliers such as Hon Hai and chipmaker Taiwan Semiconductor Manufacturing Co. coping with a decelerating smartphone market. Assembly partners like Hon Hai and TSMC typically begin gearing up for production weeks, if not months, ahead of a device’s commercial launch.The outlook for Apple and its main suppliers remains overshadowed by an ongoing trade war. AirPods, Apple Watch, HomePod and other devices made in China have been hit with 15% tariffs, and U.S. President Donald Trump hasn’t ruled out the possibility of a levy on iPhones starting Dec. 15. Hon Hai said it’s getting into the production of wearable gear next year, potentially competing for more Apple business but also increasing its exposure to the trade war.Hon Hai, which gets half its revenue from its Cupertino, California partner, is now diversifying away from its main Chinese production base to mitigate the impact of potential punitive tariffs. It’s spending more than NT$17 billion building factories in India and Vietnam, responding to customers’ needs, Chief Financial Officer David Huang said at an earnings conference. Those two countries will become regional manufacturing hubs, he added.Read more: Apple Expects IPhone Shipments to Return to Growth in 2020Hon Hai’s investment encapsulates a fundamental trend that’s beginning to shake up production of most of the world’s electronics. Taiwanese companies like Hon Hai, which today make most of the most recognizable brands, began investing in China decades ago, kicking off a transformation that’s made China the world’s factory floor. But faced with growing trade tensions and U.S. tariffs, the leaders of those companies -- which typically operate on wafer-thin margins -- are reconsidering their commitment to China.Read more: The Tycoons Behind China’s Gadget Factories Boom Prepare to ExitAlthough any pivot away from the country is just starting, factories that leave won’t come back anytime soon. In Hon Hai’s case, billionaire founder Terry Gou has even promised to shift jobs and production into the American heartland. Gou has said he intends to press ahead with construction of a display panel factory in the state of Wisconsin, an endeavor once tagged as a $10 billion investment but that has fallen far behind schedule. Vice Chairman Jay Lee said that project was “‘on track.” Hon Hai has completed initial construction on the first, main factory and the company will also target the defense and aviation markets with its panels, he added.Hon Hai executives also forecast a rebound in consumer electronics demand in 2020, which could help prop up its top line. The company reported NT$1.39 trillion in sales for the September quarter, barely changed from a year earlier. Chairman Young Liu said the firm’s goal is to achieve 10% gross margins within three to five years. Its shares closed down 1.4% ahead of the earnings on Wednesday, after gaining 27% this year.“The lower pricing of the iPhone 11 has been effective in driving demand past the Street’s expectations,” Sean Lin, an analyst at President Capital Management Corp., said in a Nov. 4 note.(Updates with executives’ comments from the fifth paragraph)To contact the reporter on this story: Debby Wu in Taipei 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.
ANSYS (ANSS) Q3 results benefits from the acquisition synergies and growth across lease, maintenance and service revenues. Also, strong product portfolio drove the quarterly results.