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Apple ( AAPL ) suppliers Broadcom ( AVGO ) and Qualcomm ( QCOM ) were pitted Tuesday in a theoretical battle to acquire Xilinx ( XLNX ) which, late Wednesday, is expected to report flat fiscal fourth-quarter sales along with down earnings. Xilinx stock was up 1.3% to 46.38 on the stock market today . It split the difference between gains by fellow takeover candidates Cavium ( CAVM ) and Marvell Technology Group ( MRVL ), up 3.4% and 0.75%, respectively. MKM analyst Ian Ing lists the trio among small- and medium-size fabless firms subject to acquisition as semiconductor companies scramble to serve the top 20 customers: Apple, Samsung, Cisco Systems ( CSCO ), Nokia ( NOK ), Ericsson ( ERIC ) and China’s Huawei, among others. “Customers prefer the fewest suppliers while preserving multi-sourcing choice,” Ing wrote in a research report. “Fabless companies can improve their operating models with more scale in manufacturing and operations.” Field-programmable gate array (FPGA) makers are proving attractive targets. In December, Intel ( INTC ) completed its acquisition of Altera, an FPGA-maker. For Broadcom, the technology would round out its networking and communications equipment needs. Qualcomm needs to diversify from its core mobile business which is threatened by chipsets and disagreements with licensees in China, Ing wrote. Ing expects Xilinx to tack on $3 earnings per share to 2017 run rates, “should a large acquirer apply scale benefits.” He rates Xilinx stock a neutral and has a 46 price target, noting it’s coming off a 2015 data center and communications trough. For Q4, which ended in December, Xilinx is expected to report flat sales of $566.2 million and adjusted earnings per share of 52 cents, down 10% year over year. For fiscal 2016, the consensus of 21 analysts models $2.2 billion and $2.03, down a respective 7% and 16.5%. Scalper1 News
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