Weekly Semiconductor Technology Notes: INTC, BRCM, TXN, AMD, CREE, AMAT

-3.69%
Downside
42.71
Market
41.13
Trefis
INTC: Intel logo
INTC
Intel

Semiconductor stocks have been one of the top performing sectors in 2014, significantly outperforming the S&P 500 index. Year-to-date, the SOX (Philadelphia Semiconductor Index) has increased 21%, significantly outgrowing the 8% gain in the S&P 500 index and the 10% increase in the Morgan Stanley High Tech Index (a proxy for the technology sector as a whole) over the same interval.  Having regained its growth momentum in 2013, the semiconductor market is expected to grow 4.4% in 2014, though brokerage analysts have estimates of 8% to 12%.  The Semiconductor Industry Association last week released global sales data for July of $28.1 billion, an increase of 10% over the prior year and the highest monthly posting ever. [1]

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

See Our Complete Analysis for These Companies Here

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Intel

Intel (NASDAQ:INTC) hosted its 2014 Developer Forum in San Fransisco last week (September 9 to 11), where developers, makers and creators gathered to share ideas and hear about how Intel will help them create the technology that will change the world. Intel provided and showcased upcoming technologies for PCs, mobile, the data center, Internet-of-Things (IoT) and wearable devices. (Read More) The company also announced signing a definitive agreement to buy over 1,400 Powerwave patents and patent last week. Additionally, Intel and MaxLinear unveiled the next phase in the Intel Puma platform family. (Read Press Release) Intel also declared quarterly dividends of $0.225 per share.

Intel’s stock traded close to $35 last week. Our valuation of $33 (market cap of $162 billion) for the company is only marginally lower than the current market price (market cap of $172 billion). We expect Intel to report revenue of around $53 billion and net income of $10 billion for 2014. We forecast non-GAAP diluted EPS of $2.18, which is in line with the market consensus of $2.17 (Reuters).

Broadcom

Broadcom (NASDAQ:BRCM) announced a series of new products and partnerships last week. Broadcom’s Ultra HD SoC technology will now power the new line of 4K media players of BrightSign, a global market leader in digital signage players. Broadcom also announced that its devices are to power the HD set-top box technology of Vodafone Germany, Korean Telecom and TiVo’s Ultra HD platform. It became the first chipmaker to achieve the latest generation Cisco VideoGuard security certification for Pay-TV. The company also launched the world’s first family of eight new hybrid satellite and terrestrial system-on-a-chip (SoC) broadcast devices for set-top boxes as well as the industry’s first low-power Global Navigation Satellite System (GNSS) and sensor hub combo chip to deliver new always on location applications for a full range of mobile devices. (Read Press Releases)

Broadcom’s stock traded between the $40 – $41 last week. Our valuation of $39 for Broadcom is slightly below the current market price (market cap of $24 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

Texas Instruments (NASDAQ:TXN) also introduced a number of new products last week for the analog and embedded markets. Additionally, the company enhanced its third-party ecosystem of digital power hardware and software tools as well as development services. (Read Press Releases)

TI’s stock traded around $48 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.

AMD

AMD (NYSE:AMD) announced that the next generation HP mobile and desktop workstations will feature its latest FirePro professional graphics and the same will also empower 4K video Workflows for Broadcast customers at IBC 2014. (Read Press Releases) The stock declined marginally last week (~2%). Our valuation of $4.17 is almost in line with the current market price, which translates into market cap of approximately $3 billion. 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.

CREE

Leading LED manufacturer, Cree announced that its products have been selected by Sanix Corporation, Japan, to be designed into their new solar inverters for use in the construction of commercial photovoltaic systems in the fast-growing Japanese solar energy market. (Read Press Release)

Cree’s stock price declined by approximately 3% last week. Our valuation of $58 for the company is at a more than 30% premium to the current market price. For calendar year 2014, we forecast Cree’s revenue and net income at $1.77 billion and $160 million, respectively. For fiscal year 2014 (ended June), we estimate non-GAAP diluted EPS of $1.87 as compared to the market consensus of $1.85.

Applied Materials

Applied Materials (NASDAQ:AMAT) announced a quarterly cash dividend of $0.10 per share on September 8, payable on December 11, 2014. Our valuation of $22 ($27 billion market cap) for Applied is at a slight discount to the current market price. We forecast the company to report revenue and net income of approximately $10 billion and net income of $1 billion for calendar year 2014. Our fiscal year 2014 (ended October) estimate for non-GAAP EPS stands at $1.23, compared to the market consensus of $1.06.

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