Semiconductor stocks’ upcoming results are anticipated to reflect the impact of widespread supply-chain disruptions. Moreover, the shortage of chipsets has pushed the semiconductor industry into negative territory.
This is evident from the monthly data on global semiconductor sales from the Semiconductor Industry Association. For February 2023, the sales figure was $39.7 billion, down 20.7% and 4% on a yearly and sequential basis, respectively.
Further, macroeconomic concerns like rising prices, geopolitical tensions, currency fluctuations and the fears of a global recession are expected to have hurt the performance of the semiconductor stocks during first-quarter 2023. Also, sluggishness in the memory segment and a slowdown in wafer fabrication equipment spending might have been a headwind.
Moreover, the quarterly results posted by Lam Research and Texas Instruments, both of which witnessed a year-over-year decline in revenues due to a weak demand environment across the end markets, reflect the downturn in the semiconductor sector.
Nevertheless, semiconductors are the backbone of the current-day technology-driven economy.
The growing proliferation of advanced technologies, including AI, ML, AR/VR, cloud computing, IoT, quantum computing, and blockchain is likely to have continued bolstering the prospects of semiconductor companies in the quarter under review.
The rapid adoption of autonomous vehicles, advanced driver assisted systems, gaming, wearables, drones and VR/AR devices, which has been continuously fueling growth in the semiconductor industry, is expected to have been a major positive.
Additionally, the accelerated deployment of 5G technology — the next-generation wireless revolution — is likely to have acted as a tailwind.
Upcoming Earnings Releases
Let’s see how some of the prominent semiconductor stocks like Lattice Semiconductor LSCC, onsemi ON, NXP Semiconductors NXPI and Rambus RMBS are poised ahead of their first-quarter 2023 results, slated to be reported on May 1.
Lattice Semiconductor’ results are likely to reflect content expansion and strength in data center servers, 5G wireless infrastructure and data center networking, which are likely to have aided its performance in the communications and computing market. Further, growing momentum across multiple applications such as industrial, automation and robotics, ADAS and infotainment systems is expected to have bolstered the company’s presence in the industrial and automotive markets during the quarter under review.
Additionally, the growing adoption of the company’s Nexus platform across all market segments and strong customer engagement on its Avant platform are expected to have remained a tailwind in the quarter under discussion.
Notably, Lattice Semiconductor has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy) at present.
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
For the first quarter, the Zacks Consensus Estimate for LSCC’s revenues is pegged at $179.93 million, indicating a 19.5% increase from the year-ago quarter.
The consensus estimate for earnings is pegged at 50 cents per share, implying year-over-year growth of 35.1%. The estimate has been unchanged over the past 30 days.
Lattice Semiconductor Corporation Price and EPS Surprise
Lattice Semiconductor Corporation price-eps-surprise | Lattice Semiconductor Corporation Quote
onsemi’s results are likely to reflect solid momentum in the automotive market, thanks to its intelligent power and sensing solution. Moreover, strength in silicon carbide modules, especially EliteSIC might have been a positive. Further, an expanding clientele, including the likes of Volkswagen, Tesla, Mercedes Benz, Jaguar Land Rover and Hyundai Motor Group, is expected to have led to top-line growth. Additionally, increased adoption of the company’s products in the industrial end market might have contributed well.
However, global supply chain constraints and persistent weakness in non-strategic end markets of computing and consumer are likely to have hurt the first-quarter performance of onsemi. (Read more: onsemi to Report Q1 Earnings: What's in the Cards?)
Notably, onsemi has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for ON’s revenues is pegged at $1.92 billion, indicating a 1.2% decrease from the year-ago quarter.
The consensus estimate for earnings is pegged at $1.09, implying a year-over-year decline of 10.7%. The estimate has been unchanged over the past 30 days.
ON Semiconductor Corporation Price and EPS Surprise
ON Semiconductor Corporation price-eps-surprise | ON Semiconductor Corporation Quote
NXP Semiconductors’ results are expected to reflect benefits from strengthening momentum in the automotive end-market on the back of solid adoption of xEV. Strength in auto radar systems, auto electrification systems, inverter control and battery management system is expected to have been a tailwind. Also, solid momentum in the S32 domain and sonar processor family might have contributed. In addition, strong demand for the company’s gallium nitride-based solutions is likely to have aided its Communication Infrastructure & Other revenues.
However, sluggishness in the consumer IoT market is expected to have remained a major headwind. Also, softness in the mobile end market might have been a concern. (Read more: What's in Store for NXP Semiconductors in Q1 Earnings?)
Notably, NXP Semiconductors has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
For the first quarter, the Zacks Consensus Estimate for NXPI’s revenues is pegged at $3 billion, indicating a 4.3% decrease from the year-ago quarter.
The consensus estimate for earnings is pegged at $3.02, implying a year-over-year decline of 12.5%. The estimate has been unchanged over the past 30 days.
NXP Semiconductors N.V. Price and EPS Surprise
NXP Semiconductors N.V. price-eps-surprise | NXP Semiconductors N.V. Quote
Rambus’ results are expected to reflect strength in the data center market. The company’s industry-leading chips and robust silicon IP are expected to have continued, benefiting its performance in the data center space during the quarter under review. Additionally, Rambus’ strength in the patent portfolio and expanding product offerings might have contributed well to the top line.
However, increasing spending on product development and global supply challenges are expected to have impacted the upcoming results negatively.
Notably, Rambus has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
For the first quarter, the Zacks Consensus Estimate for RMBS revenues is pegged at $145.9 million, indicating a 10% increase from the year-ago quarter.
The consensus estimate for earnings is pegged at 42 cents, implying year-over-year growth of 7.7%. The estimate has been unchanged over the past 30 days.
Rambus, Inc. Price and EPS Surprise
Rambus, Inc. price-eps-surprise | Rambus, Inc. Quote
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