Weekly Semiconductor Technology Update: AMD, BRCM, TXN, MU, NVDA, QCOM

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Having regained its growth momentum in 2013, the semiconductor market is expected to grow 4.4% in 2014, though brokerage and other analysts have estimates of 8% to 12%. The Semiconductor Industry Association released global sales data for July 2014 of $28.1 billion, an increase of 10% over the prior year and the highest monthly posting ever. [1] Semiconductor stocks have been one of the top performing sectors in 2014, significantly outperforming the S&P 500 index.

Below is a weekly update for some of the technology companies that Trefis covers.

See Our Complete Analysis for These Companies Here

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AMD

Last week, AMD (NYSE:AMD) collaborated with Canonical to provide one of the industry’s easiest ways to deploy an OpenStack private cloud, featuring AMD’s SeaMicro server. AMD also signed a multi-year agreement with Synopsys which gives the former access to a range of Synopsys design IP including interface, memory compiler, logic library and analog IP for advanced FinFET process nodes. Some of the biggest scalar vendors – MStar, Novatek and Realtek – extended their support for AMD’s Project FreeSync. (Read Press Releases)

AMD’s stock price declined marginally by 3% last week. Our valuation of $4.17 (~market cap of 3.2 billion) is now slightly above the market price. We forecast AMD’s 2014 revenue to increase to $5.4 billion and net income to turn positive by year end. Our GAAP and non-GAAP diluted EPS estimates stand at $0.15 and $0.37, respectively.

Broadcom

Broadcom (NASDAQ:BRCM) introduced the industry’s highest performance, lowest power multi-rate 100 Gigabit Ethernet (GbE) gearbox physical layer transceiver (PHY), optimized for next-generation cloud-scale data center, enterprise and core networks. Leading South Korean telecommunications provider, SK Broadband, selected the company’s Ultra HD SoC power its new set-top box (STB) and IPTV services.

Broadcom’s stock increased marginally last week (~2%). Our valuation of $38.50 for Broadcom is now at a marginal discount to the market price. The company has a market cap of nearly $25 billion. Our 2014 revenue and net income estimates for the company stand at $8.7 billion and 720 million respectively. Our non-GAAP diluted EPS forecast is $2.98, as compared to the market consensus of $2.55.

Texas Instruments

Last week, Texas Instruments (NASDAQ:TXN introduced seven Simple Switcher regulators to help engineers create energy-efficient, electromagnetic interference (EMI) compliant products and a new family of ADCs that provide a best-in-class power-to-performance ratio for industrial designs. The company announced a 13% increase in its quarterly dividend (from $0.30 to $0.34 per share) and gave $1.3 million to a variety of North Texas arts and culture organizations. (Read Press Releases)

TI’s stock price gained approximately 5% last week. Our valuation of $42 (~ $45 billion market cap) for TI is at a more than 10% discount to the current market price. We expect the company to report $13.1 billion and $2.6 billion in revenue this year. Our GAAP diluted EPS forecast for TI stands at $2.43 while the market consensus is at $2.41.

Micron Technology

Memory products manufacturer, Micron Technology (NASDAQ:MU) announced a next-generation, client-class solid state drive (SSD) which sets a new bar for low-power, high-performance storage for personal computers, last week. (Read Press Release) The stock traded between the $31 – $32 range. Our $30 valuation for Micron is marginally lower than the current market price. The company has a market cap of nearly $35. For calendar year 2014, we forecast revenue, net income and diluted non-GAAP net income of approximately $17 billion, $2.2 billion and $3.04, respectively.

Nvidia

Leading graphics processor manufacturer, Nvidia (NASDAQ:NVDA) launched the 32GB 4G LTE version of its Shield tablet (Read Our Article), introduced the first high-end products based on its Maxwell chip architecture (Read Press Release) and  kicked-off GAME24, an unprecedented 24-hour event celebrating PC gamers, last week. The company was also added to Dow Jones list of North America’s best performing companies in sustainability.

Nvidia’s stock price traded close to $19 last week. Our price estimate of $19 for Nvidia is slightly lower than the current market price. The company has a market cap of nearly $11 billion. We estimate Nvidia will report revenues of around $4.3 billion and net income in excess of $600 million this year. We forecast a non-GAAP diluted EPS of $1.42 as compared to the market consensus of $1.00.

Qualcomm

Last week, Qualcomm (NASDAQ:QCOM) introduced the Qualcomm Vuforia mobile vision platform to power the next generation of digital eyewear and announced the general availability of the LTE Broadcast Software Development Kit (SDK) through the Qualcomm Developer Network. (Read Press Releases) Our price estimate of $74 for Qualcomm (market cap of 125 billion) is only marginally lower than the current market price of $76 (market cap of $129 billion). The stock traded between $75 and $76 last week. We expect the company to report revenue of around $28 billion and net income of $7 billion for calendar year 2014. For fiscal year 2014 (ended September), we forecast non-GAAP diluted EPS of $5.14 as compared to market consensus of $5.31.

 

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Notes:
  1. Global Semiconductor Market Maintains Broad, Consistent Growth in July []