Tag Archives: nxpi

Apple Suppliers Downgraded On ‘Modestly Lower’ iPhone Demand

Petering Apple ( AAPL ) and Samsung demand prodded a Raymond James analyst to downgrade suppliers NXP Semiconductors ( NXPI ), Qorvo ( QRVO ), Skyworks Solutions ( SWKS ) and others, even with the iPhone 7 launch expected in September. Apple suppliers broadly fell in morning trading on the stock market today . Radio-frequency chip companies Qorvo and Skyworks were down 2.6% and 2.2%, respectively, on the downgrade, tugging rival Broadcom ( AVGO ) down 1.3%. Maxim Integrated Products ( MXIM ) stock was down more than 1%, while Apple suppliers Analog Devices ( ADI ), NXP and Texas Instruments ( TXN ) stocks were all down roughly 1%. In all, Raymond James analyst Steven Smigie downgraded six semiconductor stocks to outperform from strong buy, citing likely in-line earnings and minimal upside to June guidance. Following a January drop in the stocks, the Philadelphia Stock Exchange Semiconductor Index has rebounded 20% since mid-February, Smigie wrote in a research report. Some stocks have run up 40%, he noted. But “with only modest signs that there is the potential for near-term upside to (earnings per share), and some signs of modest downside, we worry that shares have a limited upside, with reasonable downside risk,” he wrote. Confidence could improve in the seasonally stronger second half of 2016, when Apple typically launches its newest iPhone flagship. But “Apple is seeing modestly lower demand,” said Smigie, who questioned the likelihood of a positive June guide by Apple. He also noted some pain points for radio-frequency suppliers that have more than 45% exposure to Apple. “Even if the Apple guide is healthy, we think skepticism will remain until the summer when we start to get evidence of the iPhone 7 ramp and questions about iPhone SE cannibalizing other iPhone models get resolved,” he wrote. Bright Spot For Chip Outlook Samsung sales zoomed on its Galaxy S7 flagship, but pre-orders were likely influenced by free Gear VR (virtual reality) giveaways, Smigie wrote. Huawei, on the other hand, is a “bright spot” and recently guided to 120 million to 140 million units in 2016. The lion’s share of those units will be high-end smartphones, Huawei said. Outside mobile, PC and industrial results have been weak, offsetting some strength in the growing automotive and infotainment arenas — the latter being NXP’s bailiwick following its acquisition of Freescale Semiconductor. But even in the automotive segment, “we have heard concerns from a number of investors on subprime lending,” Smigie wrote. Until those fears level out, automotive-exposed semiconductors could face some headwinds. Respective estimates from industry trackers Gartner and IDC show the PC segment saw 9.6% and 11.5% year-over-year declines in Q1 shipments. And March industrial production fell 0.6% vs. expectations for a 0.1% decline, says Smigie. Smigie notes positively, “we still like many of the stories, however, so all else being equal, on a pullback we could look to get more aggressive again.”

Could $2 Bil Sway NXP Semiconductors To Curb Its Apple Exposure?

NXP Semiconductors ‘ ( NXPI ) rumored $2 billion price tag for its Apple ( AAPL )-facing standard products division is “significantly” undervalued, says Credit Suisse. A $3 billion to $3.2 billion bidding price seems more accurate, Credit Suisse analyst John Pitzer wrote in a research report Tuesday. The standard products division is expected to generate $1.54 billion in 2016 sales, about 12% of NXP’s total revenue. But the division is struggling. In 2015, sales of its standard products — signal discretes, power discretes, protection and signal conditioning — fell 3% to $1.24 billion. Q4 sales fell 18% year over year, to $271 million. For the current quarter, NXP guided $275 million to $285 million in sales, down 13% at the midpoint vs. the year-earlier period and up 3% sequentially. Chinese bidders reportedly are interested in the segment, which supplies components for handsets, computing, consumer and automotive, Pitzer wrote. Smartphone customers include Apple, Huawei and Samsung. Although China consumes roughly half of the world’s $350 billion in chips, the country’s chip companies account for just 2.5% of the sector’s revenue. The country is looking to curb its reliance on foreign chips by building its own thriving industry. But chip technology is closely guarded and a rumored $23 billion Chinese bid for U.S. memory chipmaker Micron Technology ( MU ) had analysts scoffing last year. U.S. regulators likely would have killed that deal, they said. NXP, though, wouldn’t face nearly as stringent regulatory hurdles, Pitzer wrote. NXP is based in the Netherlands and its standard products division is located outside the U.S. Also, he points out, the segment isn’t producing specialty technology. “This portfolio consists of a large variety of catalog products, using widely-known production techniques with characteristics that are largely standardized throughout the industry,” he wrote. On Monday, NXP topped the chip count in an iFixit teardown of the 9.7-inch iPad Pro . The chipmaker supplies a Touch ID sensor, a controller and a charging component. NXP also supplied a controller for the new iPhone SE . Its Freescale acquisition in December opens NXP up to the high-margin automotive industry. NXP said “90% of auto innovation” is in electronics and it plans to lead the industry in terms of infotainment, vehicle networking, body, safety and secure access. NXP stock was flat, near 83, in afternoon trading on the stock market today . Its shares are down 1.5% this year.

Is Apple Supplier NXP Semi Looking To Home In On Auto Market?

Apple ( AAPL ) chip supplier NXP Semiconductors ( NXPI ) could be looking to further focus on the automotive market, as it considers a $2 billion sale of its standard products unit, according to reports. NXP Semi shares jumped as much as 3.8% Friday morning in quick turnover to retake their 200-day moving average. But the stock pared its gains to closed with a 1.8% rise and fell back below the 200-day line. The standard products unit — which consists of transistors, diodes and other standard-chip products — accounted for 20% of NXP Semi’s 2015 sales, but the segment’s revenue fell 3% year-over-year, with an 18% drop in Q4. Chinese firms, including Beijing-based investment firm JAC Capital, are interested in a deal with NXP for the unit, sources told Bloomberg. The move could signal an effort by NXP to further focus on the automotive market, and even products it supplies to smartphone makers, including Apple. NXP became the largest chip supplier to the automotive industry with the completion of its $12 billion merger with smaller peer Freescale Semiconductor in December. At that time, the company said it had plans to lead the auto industry in terms of infotainment, vehicle networking, body, safety and secure access. NXP’s automotive segment revenue jumped 17% last year, boosted by the acquisition, to $1.34 billion. That represents 22% of NXP’s total sales for 2015. NXP, which has an IBD Composite Rating of 81 out of 99, is set to report Q1 earnings on April 25. Analysts expect the bottom line to drop 19% to $1.09 a share, while the top line jumps 51% to $2.21 billion. As NXP stock is trading 27% below its 52-week high, top-rated peer Nvidia ( NVDA ) is sitting just 2% below its recent high. The Tesla Motors ( TSLA ) supplier broke out of a cup-with-handle base several weeks ago and is now extended from buy range. Monolithic Power Systems ( MPWR ) is trading 8% below its high as it works on a base, while Silicon Motion Tech ( SIMO ) is nearing profit-taking zone after a breakout last month. Nvidia closed up 0.65%, Monolithic Power added 0.3%, and Silicon Motion climbed 2.4% Friday. Apple added 0.1%, and Tesla fell 2.8%.