Computer Hardware

Chipmakers ailing from a double dose of trouble

19 May 2016

Sales at the likes of Qualcomm are falling for a second year in a row. Tight buyers in an unsettled global economy are partly to blame, but the semiconductor industry also lacks whiz-bang products. After a similar downturn during the financial crisis, the prognosis may be grim.

European tech stocks send conflicting signals

20 Apr 2016

ARM and ASML each posted consensus-beating first-quarter earnings, but the outlook is less assured. The UK chip designer warned on the impact of slower economic growth, while the Dutch etching equipment maker’s net bookings dropped. At least both are in better shape than Intel.

EMC deal math has snowball’s chance for Dell

19 Apr 2016

The PC maker is targeting up to $2 bln in annual savings and three times more revenue uplift from its $60 bln purchase of the data-storage company. The cost cuts alone can’t justify the price. Cross-selling is the great hope, but Dell has been too optimistic about that before.

German M&A rules leave targets worse off

24 Mar 2016

An attractive tie-up of U.S. cash dispenser Diebold and German rival Wincor Nixdorf was left hanging in the balance because of safeguards meant to protect minorities. The deal stacks up strategically and financially. Rules and taxes that prevent sensible value creation don’t.  

Moore’s Law may barely outlive its biggest fan

22 Mar 2016

The rule that semiconductors will keep getting smaller, cheaper and better may have had no greater advocate – and beneficiary – than Andy Grove. Yet the former Intel boss’ death comes as the famous law fades. Even Silicon Valley’s bedrock principles are subject to disruption.

IBM’s Watson figures everywhere but the figures

25 Feb 2016

Big Blue’s investor day focused squarely on a big bet on artificial intelligence. Software that interprets floods of data is becoming the next big thing. The hard part will be making it profitable. Years of effort have yet to produce a real financial result or forecast from IBM.

China’s chip dream can survive U.S. setback

24 Feb 2016

Beijing-backed Tsinghua Holdings dropped its $4 bln investment in Western Digital after a U.S. body said it would review the deal. Officials in America and elsewhere will scrutinize China’s chip acquisitions. But barring an outright ban, the likes of Tsinghua will keep shopping.

Sinophobic U.S. politics sting Western Digital

23 Feb 2016

CFIUS, the shadowy body that reviews deals on national-security grounds, is ostensibly apolitical. But the decision that scuppered a PRC firm’s $4 bln purchase of 15 pct of Western Digital looks like election-year pandering. It’s another headache for M&A sellers to contend with.

Troubles in China add to Lenovo’s growth worries

3 Feb 2016

The Chinese tech group’s revenue fell 8 pct to $13 bln in the three months to December as demand for PCs and smartphones slowed. Lenovo also faces fierce competition at home from the likes of Huawei and Xiaomi. Even though it is slashing costs, margins will remain under pressure.

Apple may be in for model-cycle purgatory

26 Jan 2016

The $550 bln tech giant’s top line nearly flatlined as demand for its smartphones stalled in the last quarter of 2015. Sales are set to slide in the current period. A $216 bln cash hoard and a low valuation should offer solace, but investors could fixate on the next new iPhones.

Ads put Alphabet within spitting range of Apple

22 Jan 2016

The former Google’s market cap has topped $500 bln and is inching toward the iPhone maker’s. Investors value the search firm’s earnings from fast-growing digital advertising twice as highly as Apple’s from a saturating smartphone market. They may be overlooking serious risks.

How Symantec let bad math lead to a shaky deal

21 Jan 2016

Carlyle’s buyout of the software company’s Veritas unit was never actually worth the $8 bln headline figure. Excessive leverage was dressed up to make it look workable. Even the new 8 pct price cut is misleading. Boards and investors can help themselves by getting M&A sums right.

Carlyle gives LBO targets cause to flap

20 Jan 2016

The yellow-bellied deal squawker is back. Symantec now will sell Veritas for $7.4 bln, 8 pct less than originally agreed. The separation hurt the data-storage firm’s sales and debt markets didn’t help. Hen-pecked investors should beware dangerous games of buyout chicken.

Apple’s Asia suppliers have bigger challenge ahead

7 Jan 2016

Reports of coming output cuts have hit shares in several of Apple’s component makers. Erratic sales are to be expected with the iPhone. The real test will be adapting to a more uncertain era where smartphones are no longer the main growth driver.

Virtual reality will spring to life

24 Dec 2015

Headsets from Facebook, HTC, Sony and others will help turn VR into reality in 2016. The market could generate $10 bln or more in sales within five years, provided coders create games and apps with wide appeal. Software houses, hardware makers and tech giants should all benefit.

Qualcomm separates activist wheat from chaff

15 Dec 2015

The $70 bln chip company dismissed Jana’s call to separate its manufacturing and licensing arms. The firm led by Paul Jacobs has been more amenable to sane suggestions to cut costs, shake up its board and return capital. That’s a good balance between short- and long-term greed.

China’s chip landgrab sparks $8 bln of hasty M&A

15 Dec 2015

China wants to assemble a domestic semiconductor giant via foreign takeovers. So rattled rivals are rushing to secure assets, especially in Taiwan. Micron’s $4.1 bln buyout of a JV partner makes sense. ASE’s gatecrashing of an agreed tie-up with the Chinese looks riskier.

No simple cures for Gilead and Apple valuations

28 Oct 2015

Like the iPhone maker, the biotech is the best in its industry and churns out hefty profit. Yet its stock trades at a big discount to the market. Investor impatience for astonishing new products - and fears that neither company will find them - borders on the irrational.

Apple: a tech company with Chinese characteristics

27 Oct 2015

Almost a quarter of sales – and two-thirds of revenue growth – came from China. Apple’s new iPhone installment plan could bump this up even further. Chief Executive Tim Cook’s bet on the Middle Kingdom is yielding impressive dividends, but carries existential political risks.

Aging tech firms suddenly look spry at M&A shindig

21 Oct 2015

The merger boom has hit data-storage provider Western Digital, chipmaker Lam Research and other old-line companies with $30 bln in transactions. The codgers see tie-ups as a way to boost efficiency and cut costs. More peers may join them before the deal clock strikes midnight.