|Bid||58.20 x 1300|
|Ask||58.26 x 3200|
|Day's Range||57.87 - 59.17|
|52 Week Range||37.18 - 60.64|
|Beta (5Y Monthly)||0.62|
|PE Ratio (TTM)||26.09|
|Forward Dividend & Yield||2.42 (4.06%)|
|Ex-Dividend Date||Mar 18, 2020|
|1y Target Est||N/A|
After weathering the chip slump, STMicroelectronics (NYSE:STM) is set up to be a leader in the Internet of Things.Source: Michael Vi / Shutterstock.com The Internet of Things combines sensors, analysis software and communications. It brings previously inanimate devices under computer control.Self-driving cars are the best-known IoT niche. STM lists Tesla (NASDAQ:TSLA) and Intel's (NASDAQ:INTC) Mobileye unit among its top 10 customers. But traffic lights, sewers, phone networks, and even biological processes, can be constantly monitored and controlled using STM microcontrollers.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Exciting Stocks to Buy for Aggressive Investors A poor first half of 2019 at STM was followed by a strong second half. This sent the shares up 85% over the last six months. At its Feb. 14 opening price of $31.29 per share, STM has a market cap of $28.5 billion against revenues of about $9.5 billion. Its price to earnings ratio of 28 is close to that of Taiwan Semiconductor (NYSE:TSM). STM Business and EarningsA valuation like that of TSM makes sense because STM both designs and makes its own chips. Many are made using obscure processes like Fully Depleted Silicon on Insulator (FD-SOI), Radio Frequency Silicon on Insulator (RF-SOI) and Vertical Intelligent Power (VIPower).For its fourth quarter, announced in January, STM beat analyst estimates with earnings of $392 million, 43 cents per share fully diluted, and revenue of $2.75 billion. Management is projecting 2020 revenues of $12 billion and what it calls "solid, sustainable growth."Most people have never heard of STM because its brand name is hidden inside other companies' products. Its chips go into sub-assemblies, programmed to collect data and communicate it over fixed or variable distances. Still, the company claims about 18,500 patents and filed for 590 more last year.One example of what STM does is its new LoRA SOC. This enables long-range transmission of data for creating smart devices that are managed remotely. The company manufactures in both France and Italy, as well as Singapore, with assembly and testing facilities in Asia and Morocco. Waiting for the PunchI began writing about IoT technology in the early 2000s, calling it the "World of Always On." I now prefer to call it "the Machine Internet," and it's a focus for growth in the new decade. Growth has been slowed by a lack of standards, by questions of security, and by privacy worries. STM works, with groups like the Zigbee Alliance on standards aimed at making microcontroller communication invisible.Some of the technical hurdles are now being crossed and niches like self-driving cars are heating up. Analysts expect STM to earn $1.45 per share this year, compared with $1.14 per share last year. Zacks recently profiled it as "an incredible growth stock," because earnings estimates have been steadily rising. The Bottom LineThe biggest risks for STM stock right now would be a manufacturing slowdown caused by the coronavirus and growing international tension slowing trade.If that happens, bigger profits will be delayed, but only for a time. The productivity benefits from radio-controlled sensors are impossible to deny. STM also has over $2.7 billion in cash on the balance sheet to weather any storm, against long term debt of $1.9 billion. That's a strong capital position for a manufacturer.A big year for STM will also mean a big year for its customers, and thus for the global economy. Products that sense and manage their own condition can be fixed before they break. They're managed remotely and increase productivity.For people who grew up at the dawn of the computer age, what STM products allow may be indistinguishable from magic. But your grandkids take it for granted.Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of the environmental thriller Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Exciting Stocks to Buy for Aggressive Investors * 20 Stocks to Buy From the Law of Accelerating Returns * 7 U.S. Stocks to Buy on Coronavirus Weakness The post STMicroelectronics Waiting on the IoT appeared first on InvestorPlace.
(Bloomberg) -- Applied Materials Inc. gave a bullish sales forecast for the current quarter suggesting its chipmaker customers have returned to spending more on their factories.The Santa Clara, California-based 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. Its customers include Samsung Electronics Co., Intel Corp. and Taiwan Semiconductor Manufacturing Co. That makes Applied Materials’ results and forecasts important early indicators of future demand in the electronics industry.Key InsightsFiscal second-quarter sales will be $4.34 billion, plus or minus $200 million, Applied Materials said Wednesday in a statement. That compares with analysts’ average estimate of $4 billion, according to data compiled by Bloomberg.Adjusted earnings will be 98 cents a share to $1.10 a share in the period ending in April, the company said. Analysts projected 92 cents.“We believe we can deliver strong double-digit growth in our semiconductor business this year as our unique solutions accelerate our customers’ success in the AI-Big Data era,” 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 $892 million, or 96 cents a share, in the fiscal first quarter, compared with $771 million, or 80 cents a share, a year earlier.Revenue gained 11% to $4.16 billion in the period ended Jan. 26, making it the first quarter of year-over-year growth in five quarters. Analysts were looking for $4.11 billion.Stock ReactionShares rose about 1% in extended trading after the announcement. The stock closed at $65.37 in New York and has increased 60% over the last 12 months.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: Alistair Barr at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
AlphaOne Capital Partners was launched in 2009 by Paul Hondros and Daniel Niles. Mr Hondros is the fund’s President and CEO, while Mr Niles holds the position of the fund’s senior portfolio manager. Paul Hondros has a decade-long career focused on investment industry. He holds a BA in History from St. Joseph’s University. Since 1975 […]
Applied Materials has topped quarterly earnings estimates in the trailing four periods to help the stock jump 55% in the last 12 months. Is now the time to buy AMAT ahead of its Q1 fiscal 2020 earnings release...
Investors need to understand if Nvidia stock looks poised to continue its climb, with the chip company set to report its fourth-quarter fiscal 2020 results on Thursday, February 13...
Intel (NASDAQ:INTC) looks poised to outperform going forward, driven by multiple, strong, positive trends. Specifically, Intel stock is well-positioned to benefit from the growth of the cloud, data usage, AI and 5G.Source: Pavel Kapysh / Shutterstock.com On the competition front, Intel will benefit from the apparent closing of the gaps between its products and those of AMD (NASDAQ:AMD). Moreover, the valuation of Intel stock should rise closer to that of AMD and Nvidia (NASDAQ:NVDA).Encouragingly, Intel's Q4 data center revenue reachedan all-time record of $7.2 billion last quarter, versus analysts' average outlook of $5.4 billion. The unit's top line jumped 19% YoY, driven by strong demand from cloud infrastructure companies. Intel's revenue from cloud infrastructure vendors soared 48% YoY, Intel CFO George Davis told Reuters. Intel's overall results easily beat analysts' average outlook.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, Intel's chips are proving to be popular with developers of AI systems. * 7 Utility Stocks to Buy That Offer Juicy Dividends "Demand for our Intel Xeon scalable processors is very strong as customers continue to make Xeon the foundation for their AI infused data center workloads," Intel CEO Bob Swan said on the company's fourth-quarter results conference call last month. "One of the reasons Cascade Lake is our fastest ramping Xeon (computer processing unit) is its unrivaled AI performance," he added.Data centers are "increasingly are running AI algorithms to analyze data to, for instance, identify customer trends that otherwise might be too hard to spot," Dow Jones reported in December.Swan added that the company will launch new Cooper Lake chips in the first half of this year. The new chips will enable AI systems to be trained up to 60% faster than their predecessors, he stated. Facebook (NASDAQ:FB) is one of the companies reportedly using Intel's chips for AI. It sounds like Intel will continue to win a lot of deals from AI users. A Closer Look at Intel StockPotentially making Intel even stronger in the AI arena, the company in December bought Israel-based Habana Labs for about $2 billion. A maker of AI chips, Habana will "(help) advance our AI offerings for the data center with high-performance training and inference processors and a standards-based programming environment to address evolving AI workload, " Swan said.The company has stated that it expects data centers' demand for AI chips to reach nearly $12.5 billion in 2024. Intel's 2019 revenue from its AI-based products came in at $3.8 billion, so the company can likely meaningfully increase its AI revenue over the next few years.Swan identified Chinese eCommerce giant Alibaba (NASDAQ: BABA) as one of Intel's 5G customers. Closing the Gap With AMDIntel plans to release nine new 10-nanometer chips this year, including a mobile CPU, a 5G chip, an AI accelerator, and a Xeon chip for servers, data storage and networking. That should help INTC close the gap with AMD, as TheStreet noted that 10-nanometer chips are "competitive with the 7nm Taiwan Semiconductor (NYSE:TSM) node used for AMD's latest PC and server CPUs."TheStreet also reported that Intel is growing rapidly in areas where AMD "either doesn't compete or has a very limited presence, including "storage and network processors, Ethernet chips, vision processors for driver-assistance systems and server CPUs for telco networks and IoT/edge computing deployments."Moreover, Intel is expected to announce new Xeon Scalable server processors for servers that will include more cores than its previous offering.After launching the new processors, Intel will "do a better job of spec matching against AMD's [processors]," CRN quoted Marc Fertik, vice president of technology solutions at Ace Computers, an Intel partner, as saying.Similarly, the company last month unveiled its new 10-nanometer Tiger Lake processors that will offer "better graphics performance and increased use of artificial intelligence to handle processing workloads."Additionally, Intel stated that the processors' performance will be at least 10% better than its predecessor. And importantly, TechRadar recently reported that Intel's upcoming flagship Core i9-10900K chip for desktop processors "handily beats" AMD's competing Ryzen 9 3900X chip in terms of speed.According to PCGames, the performance of Intel's new chip will be about 15%-16% better than its predecessor.Intel has been cutting prices on a number of its products that compete with AMD's offerings. For example, INTC lowered the price of its Core i9 chips for desktops by 40%-50%, and it cut the price of its L-series Cascade Lake Xeon chips for servers by over $4,700.I think the company's strategy is to lower the margins of its products that compete with those of AMD. At the same time, it will look to keep its overall margins at least stable by selling more high-margin products in the segments in which AMD is not competing.Finally, recent data on AMD's share of the desktop market presented by tomsHardware appears to be upbeat for Intel stock. During each of the last three quarters of 2019, AMD's share rose 0 percentage points, 0.9 percentage points, and 0.3 percentage points, according to the data.During that time, the company's market share rose by just 1.2 percentage points. By contrast, over the three quarters that ended in the first quarter of 2019, its market share jumped by 4.1 percentage points. The data indicates that AMD's market share gains have slowed meaningfully to a level that will not hurt Intel very much. The Bottom Line on Intel StockThe forward price-earnings ratio of Intel is only 13.4, versus 31.75 for AMD and 34.5 for Nvidia, respectively. I believe that as Intel's growth accelerates due to its increased penetration of the AI and 5G markets, while it performs better against AMD, its 2020 guidance for roughly 2% revenue growth will prove to be extremely conservative.Consequently, the multiple of Intel stock will move closer to the levels of AMD and NVDA, enabling INTC to handily outperform the market.As of this writing, the author did not own the stocks of any of the aforementioned companies. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Utility Stocks to Buy That Offer Juicy Dividends * 10 Gold and Silver Stocks to Profit Off 2020's Fear Trade * 3 Top Companies That Should Be More Careful With Your Data The post This Is the Beginning of Another Great Run for Intel Stock appeared first on InvestorPlace.
We found three highly-ranked semiconductor stocks that recently topped earnings estimates that investors might want to buy right now...
(Bloomberg Opinion) -- Let me start by saying that I am new to writing about Alphabet Inc. I’m usually based in Asia, where I write about Foxconn Technology Group, Samsung Electronics Corp. and Alibaba Group Holding Ltd., among others.These are huge companies that lead their sectors and have different levels of transparency. When I started preparing to cover U.S. technology giants, I figured that the high standards of earnings disclosure at the center of global capitalism would make life a little easier.Then I started looking at Alphabet Inc., which on Monday reported revenue that missed some estimates. It beggars belief that for more than a decade analysts, investors and traders were forced to navigate blind through the black box that was its earnings report.Then came Monday’s announcement.For the first time, executives deigned to tell investors just how much revenue comes from YouTube ($15.1 billion) and from its cloud business ($8.9 billion). It feels like a revelation, as though we’ve been let in on a secret. But when you live in a dark cave, even candlelight can seem bright.While I welcome this move toward transparency, it feels more like a company trying to pacify investors rather than truly inform them. It’s long overdue, but the company can do even more.Before the fourth-quarter earnings announcement, Alphabet broke down advertising revenue only by properties, by network members’ properties, other revenue and other bets. By region, investors are given EMEA, APAC, U.S. and Other Americas. And it shares traffic acquisition costs. Now it’s added two more line items: YouTube, the world’s most ubiquitous video-sharing platform, and Cloud — a hot business that competes against Amazon.com Inc., Microsoft Corp. and dozens of others.Despite this additional information, I still don’t think investors truly have an understanding of exactly where this company gets its revenue, what divisions make and burn money, and which platforms are lucrative and which are loss leaders (or just losers).Google search and other advertising accounted for 61% of sales last year; that’s a very big pie that could certainly by sliced up further. It doesn’t feel like a coincidence that the two extra divisions it’s breaking out are the ones that grew the fastest last year.Still lacking is any clarity on the product that gives directions to more people than anyone else (Google Maps), the one that has become one of the most pervasive email services (Gmail) nor the operating system that’s in the hands of literally billions of people across the planet (Android). I don’t own shares in Alphabet or any company I cover. But as an investor, I’d want to understand just how Google monetizes the Android operating system and whether that’s improving or deteriorating in tandem with the spread of smartphones globally. I’d also like to know whether Maps and Gmail are winners or loss leaders. Of course, it would be fascinating to know how that $1 billion HTC Corp. acquisition is faring, given that it’s meant to be a springboard into hardware devices that pit Google against its own Android partners.I guess Alphabet just lumps all this in with Google search or “Other.” Investors are right to want more information.And it’s not some esoteric pondering. There’s evidence to suggest that disclosure truly matters. For example, a study by Stanford University accounting professor Mary Barth and her co-authors found that “firms with more transparent earnings enjoy a lower cost of capital.” And Professor Robert G. Eccles of the University of Oxford and previously of Harvard Business School has written numerous papers discussing transparency from different angles, including the conclusion that the U.S. ranks low in terms of quality of disclosure.Amazon.com Inc. is an example of a company that’s improving. Its disclosures, in my opinion, have become more enlightening over the years to the point that observers can analyze multiple slices of the business to get a sense of which units are more profitable, which are growing, and where it’s making money. Investors can see, for example, that its overseas business is a loser and physical retail shrank. Yet those facts didn’t stop its market value from surpassing $1 trillion last week. Amazon still falls a little short, though.For a gold standard in transparency, let me offer up Taiwan Semiconductor Manufacturing Co., which trades in New York and Taipei. Despite being a $270 billion company entrusted with the secrets of the world’s most important technology clients, the chipmaker offers so much information about how it operates that you could almost replicate its business model. It may be worth noting that both TSMC and Amazon provided better risk-adjusted returns over the five years to Dec. 31 than Alphabet, though remember that correlation doesn’t equal causality.So while I applaud Alphabet on these latest disclosures, there’s no doubt that the world’s biggest search engine has a whole lot more to share.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Applied Materials stock will rise due to better-than-expected profits over the next year, Deutsche Bank says.
The stereotype that emerging market companies don’t adhere to sustainability is becoming outdated. Many of the leading companies in solar energy, electric vehicle components, or water filtration hail from China or South Korea.
(Bloomberg) -- Samsung Electronics Co. reported a 38% decline in profit due to falling memory chip prices, a warning sign for the global technology industry as it navigates trade tensions and the coronavirus outbreak.Net income tumbled to 5.23 trillion won ($4.4 billion) for the three months ended December, compared with the 5.31 trillion won average of projections. The miss is a surprise because Samsung carefully orchestrates earnings, including reporting preliminary numbers a few weeks before final results. The early numbers this month beat analyst estimates.Samsung has been struggling with a stubborn slump in the memory chip business, historically its most profitable division, and said the weakness may affect first quarter results. The company also flagged soft demand in the display business for some premium mobile screens and a bigger loss on large displays because of sliding LCD prices.“There are too many factors that need to be considered to conclude that we have entered into a definite demand upcycle,” said Jinman Han, senior vice president of the semiconductor business at Samsung, highlighting macroeconomic and geopolitical uncertainties that may have a negative impact in the future.The coronavirus that began in China has closed stores and factories in the country, the manufacturing base for much of the tech industry. Several companies, including Apple Inc., have said they are uncertain how the outbreak will affect them.Samsung shares fell 3.2% in Seoul. They had increased 5.9% this year through Wednesday, after rising about 44% in 2019. Operating profit was 7.16 trillion won on sales of 59.9 trillion won, the company said, in line with preliminary numbers released earlier this month.Apple, a rival and customer, reported strong earnings this week, sending shares to a record in U.S. trading. A surge in iPhone sales pushed the Cupertino, Calif.-based company into an approximate tie with Samsung for smartphone shipments in the fourth quarter, according to market researchers.Earlier this month, chip giants Taiwan Semiconductor Manufacturing Co. and Intel Corp. provided bullish outlooks for 2020, driven by demand for cloud-computing centers and fifth-generation smartphones.Samsung, SK Hynix Inc. and Micron Technology Inc. together control more than 90% of the market for dynamic random access memory, or DRAM, chips, used in everything from data servers to smartphones. Spot prices of DRAM and NAND started increasing in December after getting hammered for a year amid rising trade tensions between the U.S. and China as well as plateauing smartphone sales.The chip industry has been anticipating a recovery as the roll-out of fifth-generation wireless technology spurs higher demand for memory and greater speeds to process data. Samsung did say there are signs of recovering demand from data center customers and wireless operators.Contract prices for 32-gigabyte DRAM server modules fell about 5.9% in the December quarter, narrower than the 14% slide of the September quarter, according to InSpectrum Tech Inc. Prices for 128-Gb MLC NAND flash memory chips held steady in the final three months of 2019.“Memory-chip suppliers still have a high level of inventories,” said Lee Joo-wan, research fellow at Hana Institute of Finance. “As the first half of the year is off-season, it may take time for recovering prices to be reflected in the performance of suppliers.”Samsung’s smartphone division had a stronger quarter, posting 2.52 trillion won in operating income, up from 1.51 trillion won a year earlier. Although the total shipments of smartphones slightly decreased, high-end devices such as the Galaxy Note 10 and Galaxy Fold boosted profits in the fourth quarter.The average selling price of Samsung handsets and tablets was $216 in 4Q, which the company forecasts will increase this quarter as it launches new flagship and premium models. Samsung’s new clamshell-type foldable phone, which will be unveiled Feb. 11, is expected to further fuel growth, said Greg Roh, senior vice president at HMC Securities.Samsung’s operating profit from its display business was about 220 billion won, down from about 970 billion won a year earlier. The company is investing heavily in flexible organic light-emitting diode panels, upgrading its technology to ward off rising competition from Chinese suppliers such as BOE Technology Group Co.The consumer electronics unit, which includes TVs and appliances, had operating profit of about 810 billion won.(Updates with closing share price in sixth paragraph)To contact the reporter on this story: Sohee Kim in Seoul at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter Elstrom, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Samsung Electronics Co.’s earnings report and outlook reflect doom and gloom. Many are surprised. Positive signs from chip rival Taiwan Semiconductor Manufacturing Co. and smartphone stalwart Apple Inc. had fed the belief that the South Korean giant would put the worst behind it. The key takeaway here is that a rising tide doesn’t lift all boats.On the surface, as the one of the world’s biggest technology companies, it might be reasonable to suggest that Samsung ought to benefit from the turnaround enjoyed by major rivals. In reality, a major reason why Samsung is suffering while others rebound is that the company’s big strengths — memory chips and displays — are precisely the weakest parts of the tech sector right now.Its semiconductor unit posted a 56% drop in operating income for the period and its display business fell 77%. Between them, these component divisions usually contribute half to two-thirds of its profit. TSMC, Intel Corp. and even Advanced Micro Devices Inc. don’t dabble in such commodity products. When things are good in memory and displays, Samsung soars because it’s the world’s largest supplier of both. But when times are bad, like now, it suffers the most. That pain will continue in both divisions this quarter, with executives noting in a conference call that continued weakness in demand will hurt both revenue and profits.Bulls will find positive signs if they want. The memory chip market will surely improve as the year progresses, but heck, it couldn’t get much worse. And the whole world — from TSMC to Intel to Xiaomi Corp. — is betting that a 5G rollout will juice sales across the board. Just because TSMC, Apple and Intel reported solid results and gave optimistic outlooks doesn’t mean that every company in the sector is set to benefit from a turnaround in hardware. AMD, Intel’s chief competitor in computer chips, provided guidance just a day earlier that could be characterized as a bit light. Its shares fell 6%, their largest decline since August.Samsung’s 1.5% miss on net income was a break from the previous two quarters, when it surpassed analyst estimates. We already knew sales and operating figures from preliminary results provided earlier this month that hinted that things had reached a bottom and pointed to positive signs ahead. Operating income fell 34%, but was better than estimates, which makes this weak net profit figure confounding.The only division that didn’t share the pain is smartphones, a sandbox that Apple also plays in. Operating profit from that division climbed 67% from a year prior. But Samsung noted that the figure will remain only “steady” this quarter since an expected revenue boost from new models, including a foldable handset, will be offset by higher marketing costs. In the end, it may be best to look at reality. Samsung has chosen a strategy that allows it to dominate a select part of the tech industry. Unfortunately, that means feeling the most pain when such a bet doesn’t pay off.To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Apple Inc supplier Foxconn said it could continue to meet all manufacturing obligations in the wake of a coronavirus outbreak in China even as the iPhone maker flagged uncertainty created by the disease. "We do not comment on our specific production practices, but we can confirm that we have measures in place to ensure that we can continue to meet all global manufacturing obligations," Foxconn, formally known as Hon Hai Precision Industry Co Ltd, said in a statement on Tuesday. A new coronavirus has killed 132 in China and affected nearly 6,000 people, with several other countries reporting cases as well.
(Bloomberg Opinion) -- Intel Inc. closed out 2019 learning the hard lesson that making cutting-edge semiconductors is truly difficult.Like a prizefighter who refuses to admit he just hit the mat, the world’s biggest chipmaker is coming out swinging. And it should, because how it gets through 2020 could decide the company’s fate. Once the most advanced supplier of semiconductors, Intel struggled last year to ramp up production of chips that use its latest 14-nanometer process node, “letting customers down,” as CEO Bob Swan said in October. Its full-year results released Thursday showed that revenue climbed 2% and that net income was flat — hiding the fact that Intel dodged a bullet when it wasn’t able to supply enough of its most advanced products when clients needed them most.It tried to offer some reassurance three months ago by noting that it would increase 14-nanometer capacity 25% this year while raising capital spending to nose-bleed levels. To help overcome that slip-up, executives are keen to tell investors how many customers have signed up for its latest offerings, including a chip dubbed Ice Lake and an upgrade to its Comet Lake mobile processor, which use the next-generation 10-nanometer process. In reality, Intel is badly lagging behind both contract manufacturer Taiwan Semiconductor Manufacturing Co. and South Korea’s Samsung Electronics Co. TSMC, for example, started selling its 10-nanometer chip technology in mid-2017 and last year boosted revenue from its more advanced 7-nanometer offerings by more than 200%. When Intel eventually hits 7 nanometers in 2021, it will be almost three years behind.Intel’s rebuttal is that so-called process-node technology isn’t the only thing. It’s right, and clients should look at total system performance to see how all the parts — the processor, memory and controllers — all slot together. No other company in the world can offer the breadth and depth that Intel can.But with Advanced Micro Devices Inc. back in the game after a decade in the wilderness and a raft of chip designers ready to tap TSMC’s technology advantage, Intel would be foolish to rest on the belief that it can stay ahead of the game while lagging behind on technology. It knows this and has committed to speeding up its migration from the pace of a new node every five to seven quarters to as little as four quarters. Yet investors ought to also note that the introduction of a new node compresses margins during the early stages before better yields provide economies of scale later. A quicker timetable won’t allow as much time to enjoy the upside before the next margin crunch comes.Intel’s strategy to offset this squeeze is to tap continued growth in the data-center market. Cloud providers like Amazon.com Inc., Alphabet Inc.’s Google and Alibaba Group Holding Ltd. are among customers for its 14-nanometer Cascade Lake products, while the global 5G rollout is expected to provide a couple of solid growth years. Its Data Center Group accounts for 32.6% of revenue but 46.4% of operating income, making it Intel’s most lucrative business unit by operating margin.But that business relies on Intel’s ability to churn out leading-edge chips that, even if not equivalent to what TSMC can offer clients, won’t be too far behind. A data center operator might be willing to forgive a single-generation lag, reasoning that the broader platform integration Intel offers can provide the cost-benefit metrics it needs. A two-generation delay is hard to overlook, though. Intel’s size and strength means it won’t be easily knocked out. But it needs to get through this year unscathed if it’s to remain the undisputed heavyweight champ.(Updates with details about Intel’s 10-nanometer offerings in the fourth paragraph.)To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The iShares MSCI Taiwan ETF (EWT) and the Franklin FTSE Taiwan ETF (FLTW) recently rallied following President Tsai Ing-wen's convincing reelection bid and while some market observers believe plenty of good news is priced into equities in the tech-heavy emerging market, they aren't writing off more upside for stocks this year. Taiwan’s markets could extend their rally if past moves after an election are any indication. Furthermore, the planned signing of an initial trade accord between China and the U.S. is also expected to further diminish global trade fears and add to Taiwan’s momentum.
Zacks.com featured highlights include: Forterra, SYNNEX, Sony, Eagle Bancorp Montana and Taiwan Semiconductor Manufacturing
(Bloomberg) -- ASML Holding NV’s top executive brushed off concerns about tensions between the U.S. and China, a market that’s growing in importance to the Dutch chip gear-maker.“Someone needs to make those chips and to make those chips you would need EUV, and there is basically only one place where they can get it,” Chief Executive Officer Peter Wennink said in an interview with Bloomberg Radio, referring to its advanced lithography equipment. “For our total business it doesn’t really matter.“ASML, which has a monopoly on advanced lithography equipment needed to make next-generation chips, is already a crucial supplier to Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. but hopes to drive deeper into China. Beijing wants to build a world-class homegrown chip industry to wean itself off foreign imports -- an effort that would need ASML’s one-of-a-kind machines. Yet it’s faced difficulty getting the Dutch government to renew a license to export to China amid ongoing trade tensions.ASML shares rose 0.2% at 1:14 p.m. in Amsterdam trading.“It’s up to the Dutch government to determine whether there is a national security risk and of course there are views in the U.S. and China whether that’s a risk,” Wennink said, adding that the company has responded to requests for information from the Dutch government.Asked whether he was optimistic about obtaining the license, Wennink said “the Dutch government takes very due care when it concerns the facts and the circumstances.”Read more: China Stockpiles U.S. Chips as ‘Silicon Curtain’ DescendsChina relies on imported chip manufacturing equipment for its audacious ambition of creating a self-reliant semiconductor industry, which supplies key components for a wide spectrum of electronics from smartphones to satellites. ASML is an essential link in that plan, which will drive Chinese purchases of more than $30 billion of semiconductor equipment between 2020 and 2021, according to industry organization SEMI. China’s Ministry of Foreign Affairs said in a statement last week the Netherlands should make an objective decision on ASML’s exports based on its own interests.U.S. PressureEuropean businesses have been caught in the middle of trade tensions between the U.S. and China, even as Washington and Beijing last week sealed the first phase of a trade deal. But the U.S. still maintains tariffs on roughly two-thirds of imports from China and both sides still need to negotiate the pact’s second phase, with discussions expected to be difficult.U.S. officials have urged allies to scrutinize business ties with Beijing, invoking concerns around national security and espionage. The White House, concerned about China’s ambitions to dominate a swath of technology from AI to semiconductors, has sought ways to contain the country’s rise. China, meanwhile, has threatened European countries with retaliation on trade if its companies are shunned.European telecom operators are among those squeezed between the two major world powers after Washington called on European governments to exclude Huawei Technologies Co.’s equipment from the build-out of their 5G networks.The Dutch government has held back on renewing the license ASML needs to export its extreme ultraviolet lithography machines under pressure from U.S. officials, Reuters reported this month. That equipment is key to any chipmaker that wants to fabricate next-generation chips, say of 7 nanometer or lower nodes.Last week, U.S. ambassador to the Netherlands Pete Hoekstra told Dutch newspaper Het Financieele Dagblad that ASML’s technology “doesn’t belong in certain places,” suggesting China. The Chinese ambassador, Xu Hong, had warned days earlier in the same paper that the relationship between the Netherlands and China was at risk if the government blocks EUV machine exports.For its part, the Netherlands says it will take its own decision on the matter, independent of foreign influence. “They are free to express their view and we take note of that, but it is not decisive,” Dutch Prime Minister Mark Rutte said of the U.S. and Chinese ambassadors’ comments last week.ASML’s EUV technology has both civilian and military applications and therefore is subject to EU dual-use licensing obligations under the Wassenaar Arrangement, according to the Dutch Foreign Ministry.EUV LicenseWennink said at a press conference the Dutch government had asked the company questions about the EUV technology, how it works, and who the customer is. The level of detail the government is seeking “is probably more than they would normally do,” he said.The delay in getting the EUV license has “zero” impact on the company’s business, he said. The licensing issue concerns their first-ever EUV order from a customer in China, where few companies are at the stage of ordering the cutting-edge technology. ASML mostly ships the machines, which cost roughly 150 million euros, to the U.S., Korea and Taiwan.The company forecast first-quarter sales largely in line with analyst expectations and said it won orders for nine more of its EUV lithography machines in the last quarter. The Dutch company said it expects sales of 3.1 billion euros ($3.4 billion) to 3.3 billion euros for the first quarter, compared with an average estimate of 3.26 billion euros.ASML also announced a share buy-back program of as much as 6 billion euros over three years, as it said it expects to win 4.5 billion euros in EUV revenue this year.(Updates with CEO comments from the 15th paragraph)\--With assistance from Joost Akkermans and Gao Yuan.To contact the reporters on this story: Ellen Proper in Amsterdam at email@example.com;Natalia Drozdiak in Brussels at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Amy ThomsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Apple Inc. suppliers plan to begin assembling a new low-cost iPhone in February, people familiar with the plan said, as the company looks to address a wider swath of the global smartphone market ahead of its 5G handsets later this year.The Cupertino, California-based company is expected to officially unveil the new phone as early as March, one person familiar with its road map said. The assembly work for the new handset will be split among Hon Hai Precision Industry, Pegatron Corp. and Wistron Corp., the people added.This will be the first lower-cost iPhone model since the iPhone SE. It will look similar to the iPhone 8 from 2017 and include a 4.7-inch screen, Bloomberg News has previously reported. The iPhone 8 is still on the market, currently selling for $449, whereas Apple sold the iPhone SE for $399 when that handset launched in 2016.The new phone is expected to have Touch ID built into the home button, reusing established Apple technology instead of opting for an in-display fingerprint sensor like most modern Android rivals. It will not have Apple’s Face ID biometric authentication, but it will feature the same processor as Apple’s current flagship device, the iPhone 11.An Apple spokeswoman declined to comment.Apple Expects IPhone Shipments to Return to Growth in 2020Apple’s more affordable iPhones have proven popular with consumers, including the latest iPhone 11, whose starting price was $50 lower than Apple’s typical pricing. Strong demand for iPhones has prompted Apple to ask Taiwan Semiconductor Manufacturing Co. to make more chips in the current quarter, according to two people familiar with the matter.Shares in Japan Display Inc., which supplies LCD screens for Apple’s lower-tier iPhones, closed 1.35% higher on Wednesday.Apple is planning a slew of new high-end iPhones for release later in 2020 that include 5G connectivity, faster processors, and new 3-D cameras on the back, Bloomberg News has reported.A cheaper offering may help Apple better compete in the most price-competitive and fast-growing emerging phone markets, particularly India. iPhones are still a hard sell in the country, which is overrun by aggressively-priced Android rivals coming in at less than $200. Still, Apple has shown a will to carve out a niche for itself and is eyeing locations for Apple stores within its borders.The U.S. tech juggernaut is hoping its handset shipments will return to growth this year, having set itself the goal of shipping more than 200 million units in 2020. The successor to the iPhone SE will play a significant role in that task.(Updates with Japan Display share price move)To contact the reporters on this story: Debby Wu in Taipei at firstname.lastname@example.org;Mark Gurman in Los Angeles at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Apple Inc. has asked chipmaking partner Taiwan Semiconductor Manufacturing Co. to increase its output of A-series processors this quarter in order to satisfy higher-than-anticipated iPhone demand, people familiar with the company’s plans said.The iPhone 11 and 11 Pro models were well received on their debut in the fall and their sales in China have been particularly strong, outselling 2018’s releases in a market that has otherwise been shrinking. Even without fifth-generation wireless networking, iPhone demand has been outperforming the market and Apple’s expectations, and the company asked assembly partners to increase their production of the latest generation.The most affordable iPhone 11 model, equipped with an LCD screen, was a particular driver for the increased demand, one person said.New Low-Cost IPhone Said to Enter Mass Production in FebruaryAlong with the popularity of existing models, Apple’s business with TSMC is also set for a boost from an imminent iPhone SE successor, a low-cost model that will begin mass production in February ahead of an official unveiling as soon as March, Bloomberg News reported. It will be built around the same processor as the iPhone 11 generation.TSMC spokeswoman Nina Kao said the company doesn’t comment on its business with any specific customer. An Apple spokeswoman declined to comment.The Taiwanese chipmaker recently reported earnings above most analysts’ expectations and it forecast another good quarter ahead. Though it faces potential headwinds from the threat of tightening U.S. sanctions on key customer Huawei Technologies Co., analysts believe additional demand from Apple and Advanced Micro Devices Inc. will replace any potential Huawei drop-off.\--With assistance from Mark Gurman.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.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.