Semiconductors

TSMC’s new chips will leave Samsung in the dust

18 Apr 2019

Quarterly earnings at Taiwan’s $220 bln semiconductor maker fell 32 pct to $2 bln. However, cutting-edge technology means TSMC will benefit first as 5G handsets come into use and its South Korean rival will struggle to catch up. That justifies the rich valuation gap.

Apple and Qualcomm face up to mutual need

16 Apr 2019

The smartphone maker and chips firm ended a two-year fight over royalties, with a cash payment to Qualcomm and a licensing agreement. Apple can’t risk being stuck with second-rate chips, and Qualcomm has huge revenue at stake. At first blush, both sides benefit from the truce.

Founder’s exit gives Foxconn opportunity to reboot

15 Apr 2019

Terry Gou, chairman of the $39 bln iPhone assembler, says he plans to step down from day-to-day operations soon. The details are vague, and there is no obvious succession plan either. A well-managed handover, though, could bring new blood, and a long-delayed governance revamp.

Foxconn stumbles in first steps away from Apple

1 Apr 2019

Weak iPhone sales dented quarterly earnings at Taiwan's $32 bln contract electronics-maker. To move up the manufacturing chain, boss Terry Gou is reviving storied brands, including Nokia. But a disastrous year at the Finnish handset unit suggests Foxconn has its work cut out.

Nvidia chip deal big on vision and price

11 Mar 2019

The $94 bln graphics-chip company’s $6.9 bln acquisition of Mellanox, which makes hardware for data centers, is a bet that data will grow rapidly, and chip speeds only slowly. That view looks solid. But the price, pumped up by competing bids, presupposes a lot of success.

Germany’s Merck chips into aggressive M&A game

27 Feb 2019

The drugs and chemicals supplier is making a hostile $5.2 bln offer for Versum, after Barrick’s $18 bln unsolicited tilt at Newmont. Both aim to nix earlier agreed deals, while Roche is injecting $4.3 bln into new tech. Recent market wobbles have not yet dulled merger mania.

Breakdown: End of Moore’s law reshapes chip market

26 Feb 2019

For decades, raw computing power increased and became cheaper at a heady pace. The death of the trend means chip producers seeking an edge must specialize or find more difficult advances. One result will be a more fragmented industry. Intel and others have their work cut out.

Money can’t buy China’s chip industry much love

19 Feb 2019

Beijing may buy more U.S. semiconductors, a tacit admission of its $100 bln struggle to make advanced ones at home. Champions such as SMIC haven’t closed the gap with rivals. While distorting policies like Made in China 2025 draw fury, it’s an open question whether they work.

TSMC’s iPhone hangup can end well

17 Jan 2019

Taiwan's $183 bln chipmaker expects revenue to fall sharply this quarter. Weak demand for mobile handsets is one problem. But the pain may be short-lived. TSMC’s cutting-edge semiconductors will help to win customers in AI and 5G. That should ease its dependence on Apple.

Apple suppliers have few tools to defy gravity

3 Jan 2019

The iPhone maker’s profit warning has hurt shares in European chipmakers like AMS. Apple can appease investors with buybacks or extra software revenue. But suppliers are in a bind. Any attempt to diversify means they will have plough cash into new ventures that may easily flop.

Chip industry’s new paradigm looks like old one

16 Nov 2018

As cutting-edge semiconductors got harder to make and demand boomed from new fields like bitcoin mining, top manufacturers seemed invulnerable. Shrinking sales forecasts from Nvidia and Applied Materials show companies are as prone as ever to economic cycles and excess inventory.

China trade-secrets case brings sanctions closer

1 Nov 2018

State-backed chipmaker Fujian Jinhua was indicted for allegedly stealing designs from U.S. rival Micron. It was already barred from buying U.S. parts, so this raises the stakes. Former President Obama mulled sanctions for industrial espionage. That idea could be in play again.

Wilbur Ross finally picks right fight with China

30 Oct 2018

Washington has put a provincial chipmaker under an embargo similar to that which crippled telecoms giant ZTE. Fujian Jinhua is accused of IP theft by Idaho-based Micron; this retaliation presumes guilt. Still, targeting smaller state-backed firms is smarter than blanket tariffs.

TSMC can withstand a worsening trade storm

18 Oct 2018

The $200 bln Taiwanese chipmaker’s quarterly profit only dipped 1 pct in a tough market. U.S.-China tensions loom, but next-generation semiconductors are helping cushion the blow. Unlike fellow Apple supplier Foxconn, TSMC is also less vulnerable to customers moving production.

Samsung is closer to maxing out memory limits

5 Oct 2018

South Korea's tech titan expects quarterly operating profit to hit a record $15 bln, thanks to an upswing in chip demand. Memory prices will probably peak by year-end, however. Slower earnings growth, and the mounting legal woes of Samsung's leaders, will test investor patience.

M&A bankers better off hunting pheasant than elk

3 Oct 2018

The value of deals above $10 bln popped by 150 pct in the first nine months of the year. Some, like Comcast’s purchase of Sky, come with chunky financing fees. Still, the glory is spread less thinly on smaller deals, which are also growing quickly, and are easier to close.

Bitmain mines for a more precious currency

3 Oct 2018

The world's top crypto equipment maker collected a third of its $2.5 bln in sales last year in bitcoin and its ilk. Converting some of it into cash has helped fund the profitable business. As prices of virtual money fall, though, raising $3 bln in an IPO would be a sweet trade.

Japan’s Renesas speeds into autonomous M&A wreck

11 Sep 2018

The Tokyo-based chipmaker is buying U.S. peer Integrated Device Technology for $6.7 bln. A promised uplift in revenue from selling self-driving and connected-car technology sounds optimistic. Even if Renesas can achieve such synergies, the return on investment barely stacks up.

NXP’s time in M&A wilderness leaves it unloved

6 Sep 2018

Qualcomm’s planned purchase left the $32 bln chipmaker in stasis for nearly two years. With the deal’s failure, its shares have fallen back to trade at a 30 pct discount to peers. NXP’s stand-alone story may be partly forgotten, but it’s well placed to hand investors a windfall.

Japanese chipmaker deal is hard to process

3 Sep 2018

Renesas Electronics is considering buying U.S. peer Integrated Device Technology, for a price that could be around $6 bln. Its last acquisition hasn’t obviously delivered and the implied return on investment of this one is just 5 pct. Small wonder that investors are skeptical.