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Nice move - anyone else watching this one? What prompted the move up and can it continue?
Apparently, the market does not give a hoot about Barclay's down grade.
It held well in the early market and is not going up nicely.
Trueheart
Oh, I see. Thanks. Here is some info on that:
RFMD: Barclays Cuts to Hold; Smartphone Estimates Still Coming Down
By Tiernan Ray
Following a better-than-expected fiscal Q1 report last week by wireless chip vendor RF Micro Devices (RFMD) last week, Barclays‘s Blayne Curtis nevertheless cuts the stock to Equal Weight from Overweight, and cuts his price target to $5 from $7, writing that the “catalysts” for the stock he foresaw “have largely played out.”
Those catalysts had included gains by RF Micro at Samsung Electronics (005930KS) and Apple (AAPL). Curtis also reiterates an Equal Weight rating on shares of Skyworks Solutions (SWKS) and cuts his target to $20 from $24.
“We do believe RFMD has executed well but we now see more risk to estimates than upside and believe investors will be unwilling to assign a premium multiple given the uncertainty in the mobile market,” writes Curtis.
With areas of the smartphone market still facing downward pressure in unit shipment estimates, a lot seems to hang on Apple’s introduction of an iPhone “5S” this fall:
Samsung just saw a large correction in GS3/4 and Note 2/3 builds (down 50%+ from March to Sept), so the high-end group at Samsung likely has less risk for a correction into Q4; however, we believe mid/low-range smartphones still have more room to correct and represent a risk to SWKS, RFMD and Broadcom (BRCM). There is risk that China sees a correction after seeing a very robust C2Q. Certain companies in the supply chain (RFMD) are baking in a down Sept where SWKS is baking in growth. This then places a major emphasis on the success of the IP5S refresh cycle.
Curtis goes further and thinks that the next version of the iPhone after the 5S, an “iPhone 6,” could actually cut the amount of amplifier chips, which would not be good for RF Micro and others:
While it may seem early to think about the AAPL IP6 with the IP5S not yet released (est. Sept/Oct ’13 launch), we believe the IP6 moves to a multi-mode PA (MMPA) architecture similar to the Samsung GS4. The shift toward an MMPA architecture is a rational move by OEMs to reduce the overall RF BOM (AAPL increasingly focused on reducing semi BOM and pressuring vendor margins). Given this, we see the potential for the IP5S to have peak content as it stayed discrete yet likely added 3-4 additional LTE bands. AAPL is still the largest driver for the RF market given there is 3-4x the amount of RF content per phone.
The one stock that Curtis seems positive about in the group is Avago Technologies (AVGO), with the company having “very little China exposure” and a larger business at Apple than at Samsung.
RF Micro stock is off 23 cents, or 4.4%, at $5.28, while Avago stock is down 34 cents, or 0.9%, at $36.44.
All is well with me and I hope as well with you.
Barclay's downgraded RFMD to equal weight and dropped the target price to $5. Should be an interesting day for the stock tomorrow.
Trueheart
Hey True - I was out all day long. Missed the whole day! :(
Hope all is well!
Hiya, Eastunder. This stock has been bottom fishing all day long. I like it and am considering a buy.
Trueheart
RFMD: Craig-Hallum Ups to Buy from Hold; Ups Tgt to $7 vs $5.5
Wednesday, July 24, 2013 08:16ET
Issuer: RF Micro Devices Inc (NasdaqNM: RFMD)
Analyst Firm: Craig-Hallum Capital Group LLC
Ratings Action: UPGRADE
Current Rating: Buy (from Hold)
Target Price Action: INCREASE
Target Price: $7.00 (+27.27% from $5.50)
http://www.knobias.com/story.htm?eid=3.1.dab349ae489988e59dd7bc2e0a84601c840bd19e1c228909dd0bfda6603509a1
RFMD: Q1 EPS 9c vs 1c Beats 7c Est; Guidance In-Line with Consensus
Tuesday , July 23, 2013 16:16ET
QUARTER RESULTS
RF Micro Devices Inc (RFMD) reported Q1 results ended June 2013. Q1 Revenues were $293.00M; +44.58% vs yr-ago; BEATING revenue consensus by +1.76%. Q1 EPS was 9c; +800.00% vs yr-ago; BEATING earnings consensus by +28.57%.
Q1 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $293.00M $202.66M +44.58% $287.93M +1.76%
---------- ------------ ------------ ---------- ------------ ----------
EPS: 9c 1c +800.00% 7c +28.57%
---------- ------------ ------------ ---------- ------------ ----------
7/23 RF Micro Devices® Grows 45% Year-Over-Year, Delivers Record Revenue Of $293.0 Million
Tuesday , July 23, 2013 16:00ET
http://www.knobias.com/story.htm?eid=3.1.e963f841ad00d2042565b1861ff634f1d8f254382c0d8ece93ffe32bfbe23125
GREENSBORO, N.C., July 23, 2013 /PRNewswire/ --
Quarterly Highlights:
-- Revenue Increases Approximately $90.3 Million Year-Over-Year To $293.0
Million
-- On A GAAP Basis, Gross Margin Is 31.9% And GAAP Diluted EPS Is $0.01,
Versus $(0.07) In Q1 Fiscal 2013
-- On A Non-GAAP Basis, Gross Margin Is 35.1% And Diluted EPS Is $0.09,
Versus $0.01 In Q1 Fiscal 2013
-- RFMD Anticipates Revenue Of Approximately $305 Million To $310 Million
And Non-GAAP EPS Of Approximately $0.10 To $0.11 In The September 2013
Quarter
RF Micro Devices, Inc. (Nasdaq GS: RFMD), a global leader in the design and manufacture of high-performance radio frequency solutions, today reported financial results for the Company's fiscal 2014 first quarter, ended June 29, 2013.
Quarterly revenue increased approximately 4.4% sequentially and 45% year-over-year to a record $293.0 million, compared to $280.6 million in the prior quarter and $202.7 million in the corresponding period of fiscal 2013. The sequential and year-over-year increases in revenue reflected broad-based adoption of RFMD's best-in-class RF solutions.
GAAP gross margin for the June 2013 quarter was 31.9%, quarterly operating income was $3.2 million, and quarterly net income was $1.6 million, or $0.01 per share.
On a non-GAAP basis, gross margin expanded by 70 basis points sequentially and 100 basis points year-over-year to 35.1%, quarterly operating income totaled $28.0 million, and quarterly net income was $25.6 million, or $0.09 per diluted share.
Strategic Highlights
-- RFMD's Cellular Products Group (CPG) achieved highly-diversified,
year-over-year revenue growth of 56%, led by nearly every major
manufacturer of smartphones, tablets, and handsets, across all tiers and
air standards
-- CPG benefited in the entry smartphone segment from participation on
major reference designs and expanding customer engagements at Lenovo,
Coolpad, Skycom, WaterWorld, and others
-- CPG enjoyed increasing industry adoption of its envelope tracking and
antenna control solutions
-- CPG's leading carrier aggregation switch portfolio was selected to
enable the world's first LTE-Advanced handset
-- RFMD's Multi-Market Products Group (MPG) delivered broad-based
sequential revenue growth across multiple markets, including WiFi, Power
Broadband, and Hi-Rel applications
-- Year-over-year, MPG achieved 10.4% growth, with high-performance WiFi
growing 77%, led by expanding participation on leading consumer premises
equipment platforms
Do you see any targets here with the pps?... short range and long range?
RF Micro Devices(R) to Webcast Quarterly Earnings Conference Call on July 23, 2013
RF Micro Devices (NASDAQ:RFMD)
RF Micro Devices, Inc. (Nasdaq:RFMD), a global leader in the design and manufacture of high-performance radio frequency solutions, will host a conference call to review fiscal 2014 first quarter financial results on Tuesday, July 23, 2013, at 5:00 p.m. (ET). The conference call will be webcast live on the Company's web site at http://www.rfmd.com (under "Investors").
A telephone playback of the conference call will be available approximately one hour after the call's completion and can be accessed by dialing 303-590-3030 and using the passcode 4627660. The playback will be available through the close of business July 30, 2013.
I do. I just own many stocks and I don't pay attention to a lot of them. I just let them do their thing.
So far....RFMD is just doing it's thing. ;)
Consolidating.
I'm hoping it holds it's bright blue trend line but then again we are starting into 'pull back season' amongst all the stocks.
It's best I ignore RFMD right now. LOL because I hope the trend shift it is working on is up.... but she just might be heading to a pull back? There are some mixed signs with the negatives ruling the roost.
The Apple deal on the iPhone 5S would be cool.
QCOM, SWKS, RFMD: Wireless Names Weak on Apparent Mobile Slowdown
July 8, 2013, 11:24 A.M. ET
http://blogs.barrons.com/techtraderdaily/2013/07/08/qcom-swks-rfmd-wireless-names-weak-on-apparent-mobile-slowdown/?mod=yahoobarrons
By Tiernan Ray
Shares of chip makers, especially the wireless variety, are weaker today as analysts ponder the impact from lower-than-expected results reported Thursday and Friday by Samsung Electronics (005930KS) and HTC (2498TW).
Mark McKechnie of Evercore Partners, reiterating an Overweight rating on shares of Qualcomm (QCOM), and a $75 price target, cuts his estimates for this year and next, “to reflect a deeper look at near- term patterns for top customers AAPL and Samsung.”
McKechnie now sees Qualcomm delivering $24.2 billion in revenue and $4.51 per share in profit this fiscal year ending in September, down from a prior $24.36 billion and $4.55. For next year, he goes to $25.95 billion and $4.85 from a prior $26.36 billion and $4.90 per share.
McKechnie’s “checks” of the supply chain reinforce the cautious view of his colleague Patrick Wang’s trip through Asia recently, and he now sees Samsung’s Galaxy S4 sales not making up for the “product transition” of Apple (AAPL) from the iPhone 5 to an expected iPhone 5S this fall:
While US and China sales of the GS4 came up strong in our checks, Europe and Korea came up light, due in part we believe to limited 4G/LTE coverage in Europe and subsidy cuts in Korea. All in we anticipate ~ 22M GS4’s sold in Q2 vs. ~ 25M built. This will be offset by the GS4 mini which will help QTL royalties but not QCT chips as we believe the mini uses BRCM (OW, $33.77, covered by Patrick Wang) […] iPhone 5S and low-cost delayed ~ a month; this is not a major issue, but impacts near-term forecasts for QCOM – our forecast assumes a mid/late September intro, and 3) solid ramp of white box China OEMs which helps QTL but not QCT.
And Citigroup’s Glen Yeung, who today wrote about weakness in the PC market, and the weak outlook for Intel (INTC), also reiterated a Buy rating on Qualcomm, and an $81 price target, while removing the stock from the firm’s Top Picks Live ranking.
Yeung thinks the Samsung report last week points to a “substantial deceleration” in high-end smartphones:
Following on from Apple’s disappointing sales of iPhone5, production of Samsung’s Galaxy S4 is poised to decline ~20% in 3Q13, just one quarter from its launch. HTC’s flagship One phone is following similar trends, with sell-in demand sustained for a mere 2 months (April/May) before a production fall-off. We attribute the lackluster sales of high-end smartphones primarily to market saturation, noting that smartphone penetration in developed markets (the primary markets for high-end phones) has reached 75%, with full saturation (85%) expected to be achieved in 2014. When adding that the marginal utility of smartphone innovation is waning precipitously, we suspect high-end smartphone sales may be facing substantial deceleration. We admit that some controversy exists over the magnitude of Apple build plans in 2H13, although we err on the side of lower estimates given the high build cost (hence high subsidies) associated with Apple’s low-cost iPhone. We have been recommending Qualcomm on the premise that after a weak 1Q13, sales/margins would improve in 2H13; we still believe this to be true, albeit with reduced conviction. While we do not revise our estimates at this time (we are already modestly below consensus for 3Q13), we remove QCOM from Citi’s Top Picks Live! list reflecting the overhang from a saturating smartphone market.
Cautious, but not as negative, this morning is D.A. Davidson‘s Aalok Shah writes that the results suggest “muted demand” for high-end smartphones:
We have been worried that the market for smartphones will see a) stretched replacement cycles and b) the next wave of growth focusing on emerging markets where price sensitivity is critical. We believe the recent results from RIMM (BBRY), HTC and now Samsung may be pointing us in the direction that the lack of new, innovative features is leading to more muted demand. Of course, to fully test this hypothesis, we need to see how the iPhone 5S does, but we remain concerned that the smartphone cycle is beginning to enter a new phase where component vendors will face significant ASP pressure as handset OEMs themselves will be forced to compete against low cost alternatives.
Still, he doesn’t view the Samsung situation as a disaster, but actually still relatively healthy:
Recently, Korean news site iNews24 released a report claiming that Samsung has shipped over 20 million Galaxy S4s. While this has not yet been validated, if true we see it as a positive for demand; it will have taken roughly two months to reach the 20 million mark versus 100 days to hit the same level with the GS3 and ten months for the GS2. We believe these numbers are based on “sell- in” not “sell-through.”
Shah, who rates RF Micro Devices (RFMD) a Buy, as well as Skyworks Solutions (SWKS) and TriQuint Semiconductor (TQNT), offers that the rumored iPhone 5S, and perhaps a rumored lower-cost iPhone, may be of benefit to his favorite names:
Our current belief is that the iPhone 5S will stand as an updated version of the iPhone 5; sharing a similar RF architecture and form. We believe most of the dollar content per device will remain the same. Although the release of a low cost iPhone is yet to be confirmed, we believe it is the most logical choice for Apple. Emerging regions offer the most potential for smartphone penetration and open a significant opportunity for a resurgence of growth. Our belief is that the device will be in the sub $200 range to compete with other players in the space. While predicting the internal design of a new device is difficult as there is no historical precedent to follow, we do see several opportunities for increasing dollar content in the device. We continue to believe RFMD may have secured a PA socket win, it’s first at Apple, and that TriQuint may have won the BAW filter content as they now have the capacity.
As far as the stocks, “We believe that a 5%-8% sequential downtick in Samsung related orders was already in our PA related names forecast.”
Qualcomm stock today is down 3 cents, or 0.6%, at $60.56; RF Micro shares are down 3 cents, or half a percent, at $5.34; TriQuint is down 16 cents, or 2%, at $7.03, and Skyworks is off 35 cents, or 1.6%, at $21.50.
Jen - are you still holding this? The doom and gloom about apple and Samsung is killing me. Do you see any positive prospects?
I think we held up pretty well given how low the market went - I just hope we can spring back just a fast as we went down.
50 Day MA (5.38) giving this thing trouble as usual.
Today's action is really making me start to think that the analysts are truly anticipating some good numbers coming from the company. To be acting this way in a down market is pretty remarkable for this stock. The volume isn't great but the sellers just seem a lot less interested.
Next resistance areas are 5.45, 5.50, 5.60 and 5.75 (roughly the top of the current ascending channel), then blue skies and 2011 levels. Not saying it's going to get there but that's the basic technical setup.
RF Micro Devices recommended on strong Spreadtrum numbers at Northland
"Northland recommends buying RF Micro (RFMD) on strong Spreadtrum (SPRD) numbers and said RF suppliers will benefit from strength in low-end Chinese smartphones. The firm adds that Omnivision (OVTI) and InvenSense (INVN) should benefit from strong image sensors and gyroscope volumes."
Maybe this stock can now follow through for more than one day.
http://finance.yahoo.com/news/rf-micro-devices-recommended-strong-132459912.html
Another Charter Equity Upgrade link:
This gives a bit more insight into the "Strong Buy" component:
http://www.streetinsider.com/Analyst+Comments/RF+Micro+Devices+%28RFMD%29+Wins+Content+in+iPhone+5s+-+Analyst/8402696.html?si_client=st
That's correct. Davidson was 7.
http://www.streetinsider.com/Upgrades/DA+Davidson+Upgrades+RF+Micro+Devices+%28RFMD%29+to+Buy/8379241.html
If they placed a target on todays upgrade it will eventually show up.
Thank you. :)
Not a clue. But didn't DA Davidson have a target of 7? Maybe in that neighborhood or a little higher.
Thanks for posting the link.
Any idea on the target that goes with that upgrade?
Here's the note from their website:
"Big wins on iPhone 5S will likely boost prospects in 2H13. Upgrade to STRONG BUY. (June 10, 2013)"
http://www.charterequityresearch.com/Coverage/RFMicroDevicesRFMD/tabid/65/Default.aspx
RFMD raised to STRONG BUY by Charter this am.............
yep looks like today's presentation was received with the usual who cares? so the lower part of the channel is looming. Dropped below the 50 today so it's all downhill for a while.
Looks like this one is starting to go opposite of market now--it should have recovered and bounced with the NAZ but didn't. Funds are hitting the bid in a major way. Look for a possible pullback to the 5 area. Just can't find enough buyers to offset the profit taking.
I have never been good about seeing the "summit" in a chart. LOL
But what I am watching right now is the daily finviz chart and the resistance line (Pink)- hoping for a move above that and with higher volume to help encourage my thinking. :) I think some indicators in a regular chart show that move is possible right now.
I have traded some of the lower priced shares and I will add if there is a pull back to the blue line, should RFMD not break out above that pink line.
I've been in it for a year and a half. My original intention was to get in and out with a profit, but when it went up I held waiting for higher when it tanked. Since than I've been holding for the right moment and have added on the way. Do your charts indicate when the summit will be reached?
I'm glad to see you are still hanging in here.
What have you been up to with RFMD? Trading? Holding?
Thanks Jen... yours too.
Chart looks like it's setting up. PSAR flipped positive, MACD looking to maybe crossover positive and it's above the zero line. Stochastic on an upward trajectory.
Stock just got an upgrade to Buy with a $7.00 PT from DA Davidson, Hmm...what else, ADX (not pictured) green line crossed above the red line. Price is now solidly above the 50 day SMA.
Stock ended in the green on a very bad market day and would probably have had a solid white candle had the market been positive or less negative.
Really? You just had to ask that twice? ;)
Hope your weekend is wonderful!
J
Isn't anyone out there following this stock?
Isn't anyone out there following this stock?
I found this one a while ago, got the idea from an article @ Seeking Alpha.
showing a steady rate of growth - anyone watching this one besides me?
There's been some positive movement of late - anyone have some projections?
What do the charts say?
RF Micro Devices® Achieves 49% Year-Over-Year Growth in Quarterly Revenue
Tuesday , April 23, 2013 16:00ET
GREENSBORO, N.C., April 23, 2013 /PRNewswire/ --
Quarterly Highlights:
-- Quarterly Revenue Increases Approximately $92.7 Million, Or
Approximately 49%, Year-Over-Year To $280.6 Million
-- Quarterly GAAP Gross Margin Expands To 31.4% Versus 30.1% In Fiscal
2012, And Quarterly Non-GAAP Gross Margin Expands To 34.4% Versus 32.4%
In Fiscal 2012
-- Quarterly GAAP Diluted EPS Is $(0.06), And Quarterly Non-GAAP Diluted
EPS Is $0.06
-- RFMD Anticipates Revenue Of Approximately $285 Million To $290 Million
And Non-GAAP EPS Of Approximately $0.07 To $0.08 In The June 2013
Quarter
RF Micro Devices, Inc. (Nasdaq GS: RFMD®), a global leader in the design and manufacture of high-performance radio frequency solutions, today reported financial results for the Company's fiscal 2013 fourth quarter, ended March 30, 2013.
RFMD's fourth quarter revenue increased approximately 3.5% sequentially and 49% year-over-year to $280.6 million, versus $271.2 million in the prior quarter and $187.9 million in the corresponding prior-year quarter. The increase in sequential revenue reflected increased adoption of RFMD's best-in-class cellular RF solutions and broad-based growth in high-performance WiFi, broadband/CATV, and standard products applications.
On a GAAP basis, gross margin totaled 31.4%, quarterly operating income was $1.7 million, and quarterly net loss was $(16.0) million, or $(0.06) per share. On a non-GAAP basis, gross margin totaled 34.4%, quarterly operating income totaled $20.6 million, and quarterly net income was $17.1 million, or $0.06 per diluted share.
Strategic Highlights
-- RFMD began production shipments in support of a high-volume flagship
smartphone containing multiple RFMD components, including multimode
multi-band (MMMB) power amplifiers (PAs), single-band PAs, and antenna
control solutions
-- RFMD benefited in the entry segment from leadership on major reference
designs and the expansion of RFMD's entry solutions product portfolio to
include industry-leading CMOS PAs
-- RFMD's Multi-Market Products Group delivered sequential growth across
all business units
-- High-performance WiFi achieved double-digit quarter-over-quarter revenue
growth and increased more than 100% over the March 2012 quarter
-- RFMD announced a flexible GaAs sourcing strategy, including its intent
to exit its pHEMT fabrication facility in the UK, to expand gross margin
and support aggressive growth
-- RFMD made a $10 million investment to secure duplexer capacity
http://www.knobias.com/story.htm?eid=3.1.6807d2a71e742fe2a51b18dd19213f731517bafa1f8ee05c5180837b91c0f028
RFMD: Q4 Adj EPS 6c vs (2c) Beats 5c Est; Guidance In-Line with Consensus
Tuesday , April 23, 2013 16:18ET
QUARTER RESULTS
RF Micro Devices Inc (RFMD) reported Q4 results ended March 2013. Q4 Revenues were $280.60M; +49.31% vs yr-ago; BEATING revenue consensus by +11.08%. Q4 EPS was (6c). Adjusted Q4 EPS was 6c; +400.00% vs yr-ago; BEATING earnings consensus by +20.00%.
Q4 RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $280.60M $187.93M +49.31% $252.60M +11.08%
---------- ------------ ------------ ---------- ------------ ----------
EPS: (6c) N/A N/A N/A N/A
Adj EPS: 6c (2c) +400.00% 5c +20.00%
---------- ------------ ------------ ---------- ------------ ----------
GUIDANCEFY RESULTS Reported Year-Ago Y/Y Chg Estimate SURPRISE
---------- ------------ ------------ ---------- ------------ ----------
Revenues: $964.10M $871.35M +10.64% $936.25M +2.97%
---------- ------------ ------------ ---------- ------------ ----------
EPS: (19c) 0c -19c 16c -218.75%
---------- ------------ ------------ ---------- ------------ ----------
Canaccord Genuity Upgrades RF Micro Devices (RFMD) to Buy
Canaccord Genuity upgraded RF Micro Devices (NASDAQ: RFMD) from Hold to Buy with a price target of $7.00 (from $5.50).
http://www.streetinsider.com/Upgrades/Canaccord+Genuity+Upgrades+RF+Micro+Devices+%28RFMD%29+to+Buy/8220214.html
Nice catch if you were in earlier. I almost bought in $4.40s earlier.
I'm waiting for pull back near $5 for entry consideration.
Oppenheimer Upgrades RF Micro Devices (RFMD) to Outperform, Risk/Reward Skewed Favorably
http://www.streetinsider.com/Upgrades/UPDATE%3A+Oppenheimer+Upgrades+RF+Micro+Devices+%28RFMD%29+to+Outperform%2C+RiskReward+Skewed+Favorably/8210669.html
Oppenheimer today upgraded RF Micro Devices (NASDAQ: RFMD) from Perform to Outperform with a price target of $7.00. Analyst Rick Schafer made note of RF Micro's spotty history, but he thinks this could be skewing risk/reward favorably.
"RFMD's checkered past is, in part, tied to its one-time overreliance on Nokia (NYSE: NOK). Over the past 2-3 years, however, RFMD has de-risked NOK from 50%-plus to ~5% of sales," said Schafer.
Apple (Nasdaq: AAPL) and Samsung now account for 30 to 40 percent of sales, with most other Tier-1 handset customers accounting for 5 percent of sales each.
"We look for RFMD to sustain/gain content on high-profile product refreshes through 2013 . . . we would be buyers here," concluded Schafer.
RFMD open Gap @ 4.48
(filled with a tail - full candle fill is always better.)
Open Gap:
Direction Date Range
up Jan-02-2013 4.48 to 4.53
RFMD, TQNT, SWKS Fall On New Threat From Qualcomm (Updated)
http://www.forbes.com/sites/ericsavitz/2013/02/21/rfmd-tqnt-swks-fall-on-new-threat-from-qualcomm/?partner=
RFMD, SWKS Drop on QCOM News; Raymond James Downgrades, Longbow Defends.
By Tiernan Ray
http://blogs.barrons.com/techtraderdaily/2013/02/21/rfmd-swks-drop-on-qcom-news-raymond-james-downgrades-longbow-defends/?mod=yahoobarrons
Shares of wireless chip vendors are crumbling today, after Qualcomm (QCOM) this morning said it will start selling a so-called “front-end module,” the parts that handle the RF portion of a wireless device, in addition to its existing franchise in the baseband portion of wireless circuitry.
Qualcomm shares are down 66 cents, or 1%, at $64.61, but shares of RF Micro Devices (RFMD) are down 74 cents, over 14%, at $4.44, TriQuint Semiconductor (TQNT) stock is off 35 cents, or 7.4%, at $4.40, Avago Technologies (AVGO) is down $1.10, or 3%, at $33.66, and Skyworks Solutions (SWKS) shares are down $3.06, or 13%, at $20.56.
Raymond James analyst Tavis McCourt cut his ratings on all three RF vendors today, reducing Skyworks to Outperform from Strong Buy, cutting RF Micro to Market Perform from Outperform, and cut TriQuint to Underperform, calling Qualcomm’s announcement a “bombshell.”
McCourt notes that the $4 billion to $5 billion front-end RF market is growing by 10% to 15% annually, propelled by the advent of “long-term evolution,” or LTE, cellular, which is generally increasing RF content in chipsets.
McCourt notes that not all of the technical aspects of Qualcomm’s offering are proven, or even known, for that matter:
Qualcomm expects to have commercial products with its RF front end in market in 2H13. Qualcomm has had internal projects around RF front end components for a number of years, but this is its first commercial deployment that we are aware of. Of note, Qualcomm is using a silicon CMOS-based power amplifier, and it has not published any power efficiency stats, so its actual performance versus existing GaAs-based PA solutions is uncertain. Additionally, Qualcomm is not integrating its RF front end with its snapdragon processor, so this is a discreet system that Qualcomm will attempt to cross sell (i.e., vendors can choose the Qualcomm RF front end or competitors’ offerings freely.) We expect the Qualcomm solution will target the Chinese market initially, but over the longer term, Qualcomm’s ambitions are obviously much larger.
McCourt expects P/E multiples will be “capped” for the RF vendors given that he thinks it is a matter of time before Qualcomm finds success in the front-end market:
Historically, Qualcomm’s entry into new chip markets have had only modest success in the first 1-2 years, but almost universal success over a three- to five-year time frame given its substantial R&D scale and systems expertise. We expect Qualcomm’s entry will have no impact on Skyworks’ analog, WLAN, or other non-cellular end market businesses.
But there were also defenders today. Longbow Research’s Joanne Feeney reiterates Buy ratings on Avago, RF Micro, and Skyworks, and a Nuetral rating on TriQuint.
Feeney thinks the Qualcomm part is too generic to pose a real threat:
QCOM’s new front-end module (FEM) provides an off-the-shelf solution for OEMs, but the generic nature of this device—and a number of technology shortcomings—will be very likely to limit adoption. QCOM’s solution is based on all-silicon (SOI or SiGe) technology whereas leading-edge PAs are GaAs-based because that material provides superior performance, so we suspect this solution would be adopted only in lower-end smartphones. The FEM can only perform as well as its worst component – so handset OEMs which emphasize performance will likely steer clear of this one. Superior performance claims likely reflect QCOM’s baseband and the integration of envelope tracking (ET) technology—but others will have ET-PAs at the same time. Sub-par filter technology: QCOM is using SAW filter technology and this underperforms FBAR/BAW on certain bands – particularly LTE bands. Once again, this points to QCOM’s RF360 being targeted at lower-end devices. Uniformity for OEMs: QCOM’s solution removes the ability of OEMs to differentiate handsets. Handsets will end up having the same performance specifications. This would undermine the ability of the OEMs to segment its own customer base into high-spending customers and low, and would remove the ability to differentiate from competitors. No customization and no second source.
And Lazard Capital Markets’s Ian Ing stakes out a middle ground. For him, Qualcomm’s product may not be about competing at all, but rather about protecting its baseband franchise:
One could argue that QCOM intends to gain handset content by entering the RF market (despite unattractive gross margins), which would be a negative for RF vendors. More likely, we would argue that Qualcomm has viewed “band fragmentation” as a threat to building single- platform world phones (QCOM’s default combo chip) as it opens the door for other modem suppliers with more limited solutions (such as BRCM, Mediatek, etc). Given that RF vendors are without an easy turnkey solution to support the 40 radio-bands in the world, QCOM may be attempting to push the RF IC vendors to better match the bar set by the QCOM RF360 solution. QCOM has ‘kick started’ markets before: We note QCOM will often enter, then exit, markets just to “kick start” them to better help its QCT and QTL model. Recall, it produced CDMA handsets in the mid-to-late 90s, and recently sold its stake at an Indian BWA carrier (JV with Bharti). These moves were not meant to become a Motorola or a Verizon, but to create better opportunities for QCT and QTL in the long run.
Ing maintains Buy ratings on Avago, Skyworks, and Qualcomm, and Neutral ratings on RF Micro and TriQuint.
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RF Micro Devices, Inc. (Nasdaq:RFMD) is a global leader in the design and manufacture of high-performance radio frequency
components and compound semiconductor technologies. RFMD's products enable worldwide mobility, provide enhanced connectivity
and support advanced functionality in the cellular handset, wireless infrastructure, wireless local area network (WLAN), CATV/broadband
and aerospace and defense markets. RFMD is recognized for its diverse portfolio of semiconductor technologies and RF systems expertise
and is a preferred supplier to the world's leading mobile device, customer premises and communications equipment providers.
Headquartered in Greensboro, N.C., RFMD is an ISO 9001- and ISO 14001-certified manufacturer with worldwide engineering, design, sales
and service facilities.
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