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Print FormatKeyBanc Remains Upbeat On Auto-Based Companies Like Microchip, Indie; Shares View On Semiconductor Stocks
- KeyBanc analyst
John Vinh said nine companies were under coverage (Advanced Micro Devices, Inc NASDAQ: AMD, Cirrus Logic, Inc NASDAQ:CRUS, Lattice Semiconductor Corporation NASDAQ:LSCC, Monolithic Power Systems, Inc NASDAQ: MPWR, NXP Semiconductors N.V. NASDAQ:NXPI, ON Semiconductor Corporation NASDAQ: ON, Qorvo, Inc NASDAQ: QRVO, Skyworks Solutions, Inc NASDAQ: SWKS, Synaptics Inc NASDAQ:SYNA) and reported positive results but mixed guidance. - The broad-based analog (LSCC, MPWR, NXPI, ON) reported robust results/guidance, and
China smartphone-exposed companies (QRVO, SWKS) posted weaker results. - While the China COVID lockdowns are disrupting both supply and demand, particularly in consumer-facing end-markets, such as P.C./mobile, the impacts appear lesser than we initially had feared following Texas Instruments Inc's NASDAQ:TXN report.
- Notably, NXPI indicated that 50% of its customers in
China are now fully operational, another 30% are recovering, and 20% remain shut down, which suggests the supply chain inChina is healing nicely. - By end-markets, automotive, industrial & IoT, and data center demand remains strong; with softening consumer P.C., industry shipments in 2022 are likely to decline HSD% vs. flat to down LSD% previously, as enterprise strength continues to offset consumer/Chromebook weakness.
- Mobile demand, especially in
China , is being negatively impacted by the recent COVID lockdowns, with QRVO signaling a multi-quarter inventory correction in handsets and tempering 5G industry smartphone shipments in 2022 from 725 million (+32%) to 662 million (+20%). - Conversely, the iPhone and high-end smartphone demand remain resilient.
- Vinh saw that broad-based and auto-exposed companies Microchip Technology Inc NASDAQ:MCHP and Indie Semiconductor, Inc NASDAQ:INDI are likely to post solid results and guidance this week.
