Semiconductors

Samsung is primed to seize AI chipmaking crown

9 Jan 2024

The $390 bln Korean giant could become a one-stop shop for AI semiconductors. Losses in its memory chip unit are probably shrinking, and it is bulking up in logic chips and packaging. Samsung is rapidly moving towards a level of integration that could give it an edge over TSMC.

Intel becomes proxy for Biden’s America Inc

27 Dec 2023

The chip giant’s $3.2 bln subsidy to build a plant in Israel follows similar outlays from the USA and Germany. The investment loop is a unique boon to shareholders: President Biden wants to build an allied semiconductor supply chain to fend off China; he must use Intel to do so.

Capital Calls: ASML’s new CEO

30 Nov 2023

Concise views on global finance: Peter Wennink has delivered a 1,000% shareholder return during his tenure at the Dutch group that is a key player in chip manufacturing. His successor, Christophe Fouquet, faces a more challenging future.

Capital Calls: Arm, Insurers’ climate score

9 Nov 2023

Concise views on global finance: The $56 bln chip group said it can’t be sure when certain customer deals will translate into revenue, undermining its quest for a steadier top line; insurers are still too addicted to dirty energy, a new study shows.

Broadcom deal tempts a treacherously tasty trade

6 Nov 2023

The chipmaker’s $82 bln acquisition of VMware hangs by a Chinese thread. This lingering doubt has created a quirky anomaly on whether a small slug of shares winds up being bought for cash or stock, or not at all. There’s 25% upside to grab, but only for the bravest arbitrageurs.

Biden AI plan is one step in avoiding crypto trap

30 Oct 2023

The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.

Japan Inc is only winner in nixed chip deal

27 Oct 2023

The collapse of Kioxia-Western Digital merger talks is bad for the two struggling companies, complicates Bain’s exit strategy and highlights investor-rival SK Hynix’s conflicts. But Tokyo now seems more open to cross-border deals, even for national champions. That’s a positive.

US tech controls help and hinder China chipmakers

20 Oct 2023

Washington’s latest restrictions aim to curb Chinese access to semiconductors for AI and warfare. Beijing is years away from replicating sophisticated components and tools like those made by ASML. But the rules create opportunities for local champions such as $30 bln SMIC.

KKR’s Japan chip gear IPO clears high first bar

18 Oct 2023

Kokusai’s $720 mln float is the country’s largest in five years and coincides with the bottom of the semiconductor cycle. Pricing was cautious and two investors bought nearly half the offer. But with war drums beating, Japan’s elongated, inefficient listings process is in focus.

Fixing Intel ends with taking it apart

29 Sep 2023

The chip giant faces the existential challenge of regaining its lost lead in manufacturing. Doing so could double its $145 bln market value, but maintaining an edge requires ever more spending, fed by serving outside customers. The best way to do that: split Intel in two.

Bankers’ IPO support could easily buckle

26 Sep 2023

Arm, Instacart and Klaviyo egged on opening pops for their listings by selling a meager number of shares, but have fallen since. While big debuts are good for the companies, their inability to outpace a still-weak market means the opportunity for others to follow remains narrow.

Listing duo offers followers a cautious playbook

21 Sep 2023

Chip designer Arm and grocery delivery company Instacart have secured relatively successful stock launches, offering hope of a wider reopening of the IPO market. In this Viewsroom podcast, Breakingviews columnists explain how cornerstone investors and lowly valuations helped.

China’s next chip battle is for the bottom line

19 Sep 2023

Huawei’s new smartphone proves the country can make cutting-edge hardware despite US restrictions. But it’s unclear if semiconductor provider SMIC can scale supply. Huawei’s flashy phones have hogged the limelight: SMIC’s shrinking margins deserve the same scrutiny.

Arm’s $52 bln IPO value sets stage for a fall

13 Sep 2023

CEO Rene Haas convinced investors to pay the top of the range for the chip designer’s float. To justify the valuation, he’ll have to turbocharge growth while keeping a lid on costs. Anything but laser-perfect results for the next two years will cause a rapid share price tumble.

Arm’s IPO valuation rests on big dose of hope

7 Sep 2023

The SoftBank-owned chip designer is getting ready to list. In this Viewsroom podcast, Breakingviews columnists argue that even the company’s reduced price tag of $50 bln is still far too high, and debate what investors would have to believe to buy the shares.

SoftBank’s reduced Arm price tag is still too high

5 Sep 2023

The Japanese group may float its UK chip designer for $50-54 bln. That’s lower than initially hoped, but still implies an implausible future where revenue and profitability soar. If Arm merely grows at recent rates and nudges up margins, its market worth is more like $35 bln.

Nvidia gives Arm IPO a double leg-up

4 Sep 2023

The $1.2 trln semiconductor designer’s AI-inflated stock price provides a following wind for the UK group’s float. Now Nvidia and two peers may endorse its valuation by buying into Arm’s offering. Owner SoftBank will be hoping other investors buy into the somewhat circular logic.

SoftBank could live with a cut-price Arm IPO

30 Aug 2023

The Japanese conglomerate wants a $60-70 bln price tag for the UK chip designer, according to reports. But it has reasons to push on even at a lower value, in part because a float would boost the parent group’s creditworthiness. That gives investors an incentive to play hardball.

Arm’s changing business model is wildcard for IPO

24 Aug 2023

As well as jumping on the AI bandwagon, SoftBank’s soon-to-float chip designer has altered the way it charges big customers to boost growth and smooth out revenue. If it works, a valuation north of $60 bln looks slightly less implausible. But investors lack evidence so far.

AI frenzy’s feedback loop stuffs Nvidia

23 Aug 2023

The $1.2 trln semiconductor designer’s second-quarter revenue doubled. Tech giants’ valuations are soaring on AI hype, so naturally companies are pouring money into it, including by buying Nvidia's chips. As long as investors quack for more, Jensen Huang's firm gets fed.