In a week that marked the initiation of the fourth-quarter earnings season, the semiconductor industry is experiencing a mixed bag of results and forecasts.
While offering valuable insights, these earnings more importantly point to challenges and opportunities ahead. These help in investor positioning.
KeyBank Capital Markets shared their insights on the semiconductor space keeping the week’s earnings setup in frame. Among the companies in focus:
- Advanced Micro Devices Inc AMD, Jan. 30
- Microchip Technology Inc MCHP, Feb. 1
- Qorvo Inc QRVO, Jan. 31
- Qualcomm Inc QCOM, Jan. 31
- Silicon Laboratories Inc SLAB, Jan. 31 and
- Skyworks Solutions Inc SWKS, Jan. 30
The Semiconductor Analyst: KeyBanc analysts John Vinh, CFA and Jim Long, CFA shared their ratings and price targets on six semiconductor companies that are scheduled to report in the week ahead.
| Stock Ticker | Company Name | Rating | Price Target | Reporting On |
| SWKS | Skyworks Solutions, Inc. | Overweight | $120 | Jan. 30 |
| AMD | Advanced Micro Devices, Inc. | Overweight | $195 | Jan. 30 |
| SLAB | Silicon Laboratories Inc. | NA | NA | Jan. 31 |
| QCOM | Qualcomm Incorporated | Overweight | $165 | Jan. 31 |
| QRVO | Qorvo, Inc. | Sector Weight | NA | Jan. 31 |
| MHCP | Microchip Technology Incorporated | NA | NA | Feb. 1 |
The Semiconductor Stocks’ Thesis:
Tempered Outlook Based On Earnings So Far
Texas Instruments Inc TXN kicked off semiconductor stocks’ Q4 earnings on Jan. 23. It set the tone by unveiling lower-than-expected results and guidance, primarily attributed to incremental weaknesses in the industrial and automotive sectors.
Similarly, Intel Corp INTC, reported solid results but tempered its outlook on Jan. 25, citing headwinds from increased inventory correction in Mobileye Global Inc MBLY, Field-Programmable Gate Arrays (FPGAs), and 5G, alongside subseasonal performances in PCs and data centers.
Further revealing the industry’s landscape, STMicroelectronics NV STM and Tesla Inc TSLA echoed a broadening softness in the industrial sector and a slowdown in electric vehicle (EV) growth, respectively. The picture for communication infrastructure, painted by Telefonaktiebolaget L M Ericsson ERIC and Nokia Oyj NOK indicated a persistently muted investment outlook from carriers, particularly with a significant slowdown in India deployment.
Related: Semiconductor Player STMicroelectronics Tops Q3 Expectations But Revises Annual Outlook: Details
Tesla’s Market Cap Dips Below Eli Lilly Following Q4 Revenue Miss
Expectations With What Lies Ahead
Optimism surrounds AMD, anticipating higher results and guidance, driven by improving Genoa demand and server share gains. However, Vinh expects MCHP to post in-line results and slightly lower guidance due to broad-based demand weakness and persistent inventory de-stocking.
In the smartphone semiconductor segment, including QRVO, QCOM, and SWKS, solid results and guidance are anticipated by the KeyBanc analysts. This is driven by sustained Android recovery and replenishment demand during the holiday seasons, complemented by in-line iPhone demand.
Lastly, in the Internet of Things (IoT) domain, Vinh expects Silicon Labs (SLAB) to present in-line results and guidance, with a focus on making further progress in end-customer inventory destocking. While the recovery in this sector is anticipated to be gradual, the industry remains poised for growth.
Read Next: ‘Data As The New Oil’: Semiconductors ‘Catching Up’ With GDP In 2024, Says Analyst
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