|Bid||46.19 x 800|
|Ask||46.20 x 1800|
|Day's range||46.05 - 48.37|
|52-week range||31.13 - 61.19|
|Beta (5Y monthly)||1.73|
|PE ratio (TTM)||23.16|
|Forward dividend & yield||N/A (N/A)|
|Ex-dividend date||06 May 1996|
|1y target est||N/A|
(Bloomberg) -- When Samsung Electronics Co. brass addressed analysts during its last earnings call, much of the talk revolved around finally turning the corner after years in the doldrums. That was in January, before Covid-19 threw the global economy into a tailspin.Now, executives are struggling to assess the damage. In the short term, Samsung’s most profitable business is riding a surge in online activity from the millions confined to home, driving demand for the memory chips that help power datacenters and cloud services. But should the pandemic persist into the second half -- a worst-case scenario -- the tech giant foresees missing its own 2020 revenue projections by a double-digit percentage, according to people familiar with internal discussions.Samsung unveils preliminary earnings Tuesday, becoming one of the first major technology corporations to paint a picture of how the pandemic impacted the global tech industry in 2020’s first three months. As the world’s largest maker of memory chips, phones, displays and appliances, the Korean giant is exposed to the economic shocks of Covid-19 like few other tech corporations. The novel coronavirus has already forced Korea’s largest company to shut plants from Gumi at home to India, costing Samsung days of lost production. While it’s expected to post first-quarter revenue growth, the question is whether the initial surge in semiconductor demand can offset a hit from what could be the worst global economic shock in at least a generation.“We are truly in uncharted waters as the tech industry in general has continued to grow, perhaps at varying rates, but we haven’t seen a broad-based, global downturn such as we may be in line for,” said Robert Maire, president of Semiconductor Advisors in New York. Chip demand in particular “will likely not be as robust as it could have been as demand for devices that contain semiconductors, such as smartphones, TVs and consumer electronics, will be reduced through negative economic impact.”Foremost among the divisions under scrutiny is the semiconductor unit, which accounts for more than half of operating profits at Samsung. It’s been pounding out memory chips -- the lubricant of the tech industry -- round the clock, essential in datacenters hosting everything from video conferences to e-commerce. But executives and investors worry that prolonged Covid-19 lockdowns may crimp final demand for smartphones and other electronics -- and ultimately deal a serious blow to the chip industry’s nascent recovery.Read more: Apple Tells Staff U.S. Stores to Remain Closed Until Early MaySamsung’s shares have dived more than 20% since their January 2020 peak, depressed by a series of analysts’ price-target cuts. Much of the hit could come this quarter since Covid-19 escalated globally in March. Revenue growth is likely to fall off steeply, according to Eugene Investment & Securities, which projects a 12.3% decline in the June quarter from a forecast for a mere 0.1% increase in the January to March period.Among the analysts that cut price targets was Hana Financial Investment, which also slashed its projection for Samsung’s 2020 smartphone sales from 300 million units to 260 million. It expects OLED panel shipments to plunge 12% to 373 million this year. Now that the Euro 2020 soccer tournament and Tokyo Olympics have been postponed, TrendForce also lowered its market forecast for TV shipments by 5.8% to 205.2 million units, warning that could slip further as the situation worsens in North America and Asia.“The current financial crisis that accompanies the pandemic has produced a lot of uncertainties and could surpass the Financial Crisis of 2007-2008 in scale,” TrendForce said on March 30. “Hence, the general economic outlook for 2H20 could become even gloomier as the pandemic is not expected to be brought under control in the short term.”Read more: Micron Gives Strong Outlook Lifted By Data-Center DemandThat’s a far cry from just a month ago, when Samsung told shareholders the memory market will stabilize this year thanks to upgrades in manufacturing processes, datacenter expansions and the rollout of fifth-generation or 5G wireless networks. Having learned its lesson from previous industry slumps, Samsung was confident it could maintain a balance between supply and demand for memory chips, the people said, asking not to be identified talking about internal deliberations. Their prime concern was avoiding a repeat of the oversupply that triggered a chip price crash in 2019, they said.The industry is still toting up the impact of the pandemic. In a positive scenario, analysts expect pent-up demand for smartphones and sustained use of online learning and work-from-home gear like laptops to engender a soft-landing for Samsung later this year. Just a week ago, Qualcomm Inc. and Western Digital Corp. said they were seeing a recovery in demand from Chinese consumers for phones and computer disk drives. And Micron Technology Inc. has predicted stronger-than-expected revenue.What Bloomberg Intelligence SaysMemory chips are likely in tight supply due to disruptions in obtaining certain raw materials and equipment on the Covid-19 outbreak. This may bolster DRAM and NAND sentiment following rising contract prices in March, supported by rising remote work access needs, despite an extended smartphone shipment slump to 2Q.\- Anthea Lai and Anand SrinivasanClick here for the research.It may well be that the disease will encourage shifts in consumer activity that benefit the industry in the long run, said C.J. Muse, senior managing director at Everscore ISI in New York.“The world is changing,” said Muse. “There is clearly something that, over the long term in this kind of virus world, should be positive, given how our lives are evolving and how important the cloud is to a lot of what we do now and even more than ever.”Read more: ‘Nightmare’ for Global Tech: Virus Fallout Is Just Beginning(Corrects Trendforce’s forecast in seventh paragraph to refer to industry, not Samsung, shipments)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co.’s better-than-expected profit revives hopes that a surge in internet usage from people sheltering in place during the Covid-19 pandemic will help make up for a drop-off in demand for smartphones and other consumer electronics.Shares in Korea’s largest company climbed more than 3% after it posted operating profit of 6.4 trillion won ($5.2 billion) in the March quarter, surpassing the average analyst estimate by 3.6%. Sales rose 5% to 55 trillion won, according to preliminary results released Tuesday. The company didn’t provide net income or break out divisional performance, which it will do later this month when it releases final numbers.Samsung -- one of the first major technology corporations to unveil March quarter results -- demonstrates how the novel coronavirus outbreak is exerting an uneven impact on the global electronics sector in the short term. Soaring online activity from gaming to video streaming is driving sales of semiconductors -- the lubricant for the internet and Samsung’s most profitable business -- even as worsening employment prospects curtail spending on gadgets such as the company’s just-released flagship Galaxy S20.The Asian giant’s solid performance underscores expectations for resilient chip demand since Micron Technology Inc.’s stronger than anticipated outlook. That lifted Asian chipmakers such as Taiwan Semiconductor Manufacturing Co. and Nanya Technology Corp. Much now hinges on whether governments can mitigate the fallout from potentially the worst global economic shock in at least a generation.“Right now, we can only project a picture of the second quarter: soaring demand in server chips may offset slump in display, mobile and consumer electronics,” said Song Myung-sup, analyst at HI Investment & Securities Co. in Seoul. “The problem is, if the Covid-19 pandemic continues further, we can’t guarantee that the uptrend in expansion of servers will be sustainable in the second half of this year.”Samsung’s Symptom-Less Earnings Don’t Make It Immune: Tim CulpanAs the world’s largest maker of memory chips, phones, displays and appliances, Samsung is broadly exposed to the economic shocks of Covid-19. Despite Tuesday’s rally, the company’s shares remain down about a fifth since their January 2020 peak. The better-than-expected result unveiled Tuesday was helped by the South Korean won weakening about 5% against the dollar in the first quarter, lifting the value of income repatriated from overseas.Should the pandemic persist into the second half -- a worst-case scenario -- the tech giant foresees missing its own 2020 revenue projections by a double-digit percentage, according to people familiar with internal discussions. It’s grappling with plant shutdowns and store closures this quarter alongside rivals and customers like Apple Inc. and Huawei Technologies Co. At the same time, memory chipmakers have experienced rising demand and prices for DRAM and flash memory used in data centers and cloud service operators.Read more: Working From Home Gives Chipmakers Boost While Others SufferWhat Bloomberg Intelligence SaysSamsung Electronics’ strong 1Q operating profit beat may affirm rival Micron’s upbeat expectations for memory chip demand, despite the Covid-19 outbreak. DRAM contract prices rose in March after reaching a bottom in December, while those for NAND inched up from late 3Q. Chipmakers’ wafer cuts may tighten supply and restore inventory to normal levels.\- Anthea Lai, analystClick here for the research.Contract prices for 32-gigabyte DRAM server modules rose roughly 12% in the March quarter, according to InSpectrum Tech Inc. Prices for 128-gigabit MLC NAND flash memory chips increased about 5.6% in the first three months of 2020. Thanks to growing demand for online services from video-conferences to e-commerce and gaming, prices of server DRAM and enterprise SSD or solid-state drives are projected to keep growing in the current quarter. TrendForce raised its price-growth forecasts on server DRAM to 20%, while it expects enterprise SSD prices to rise by as much as 15%.“The growing demand for server DRAM led to low inventory levels for both clients and suppliers,” TrendForce said in an April 1 note. “Also, following a new round of tenders from Chinese telecom operators in February, the supply of server DRAM has become much tighter, in turn maintaining the upward pull on server DRAM prices.”Samsung’s hardest-hit business was mobile because of disappointing demand for S20 devices released in early March. In the first quarter, the company shut its key Gumi plant several times after discovering infection among employees, prompting the shift of some of output to Vietnam. Lockdowns of major cities and store closures across North America have depressed overall business. Hana Financial Investment expects Samsung to report 62.2 million unit shipments of smartphones for the first quarter of 2020, compared with 71.5 million units a year earlier.“Although semiconductor earnings look set to increase on the back of memory chip price hikes, the divisions selling finished products” will likely see their earnings decline, said Greg Roh, senior vice president at HMC Securities.Samsung’s Beauty and Beast: Fully ChargedFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- As the coronavirus prompts talk of an earnings recession for most Asian emerging stocks, there’s an industry that’s holding up: chipmaking.The worldwide lockdowns due to the virus and the ensuing contractions in output have sparked indiscriminate selling across industries, and dismal earnings forecasts for this quarter and beyond -- except for the tech industry.Micron Technology Inc. last week reported adjusted earnings that beat Street estimates by 24% and predicted stronger-than-expected revenue, fueling optimism about other chipmakers’ prospects. With most of the population in major economies worldwide working or learning remotely, online and ecommerce services are booming, stoking demand for cloud storage and a recovery in memory-chip prices.“Definitely, demand for server chips is on the rise as people increasingly go on a shopping spree online and are working remotely with laptops,” said Lee Seung-Hoon, head of equity at DB Asset Management. “For the tech industry, demand for handsets and home appliances has been hit. But this new trend suggests chipmakers could rebound faster than other industries, once virus infections peak.”The earnings season kicks off in April with investors keen to look beyond the abysmal first quarter. Samsung Electronics Co., the world’s largest memory chipmaker, will give a clearer picture of the industry’s outlook in its preliminary earnings release scheduled next week. The company’s shares have been the most sold by foreigners among Kospi members in March.Shares of Samsung Electronics fell as much as 1.5% in Seoul, erasing an earlier gain. Peer SK Hynix Inc. was down as much as 2%.Here are three charts with evidence that global chipmakers have better prospects than most industries this earnings season:Korean ExportsKorea’s preliminary semiconductor exports gained further in March, extending a rebound from a low in late 2019, shrugging off the effects the global coronavirus outbreak.The advance contrasts with a slump in the Bloomberg Asia Semiconductor Index because of concern the virus would disrupt supply chains and destroy demand.Micron’s EarningsMicron Technology’s forecast-topping earnings and optimistic sales outlook bode well for other chipmakers in Asia and elsewhere, offsetting slow demand for smartphones and home appliances.DRAM PricesThe chipmaking industry’s earnings cycle has historically moved in tandem with semiconductor prices.DRAMeXchange has raised its DRAM server chip price forecast for the second quarter to a gain of 20%, up from its earlier forecast for a gain of 15%, citing growing demand from server manufacturers and cloud service providers.(Adds share price moves in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nick Vyas, executive director of the Center for Global Supply Chain Management at the University of Southern California, said the effects of COVID-19 on the world's supply chain are far-reaching. “I would call this a once-in-a-century disruption that we’re facing,” he said. “What makes it even more unique is that the disruptions aren’t happening all at the same time. It’s moving from country to country, continent to continent.”
Chipmakers tend to benefit from demand spike for PCs and cloud services, as increasing number of employees and students are working and learning from home amid the coronavirus-led global lockdown.
Micron Technology, Inc. (NASDAQ:MU) just released its quarterly report and things are looking bullish. It was overall...
Although Micron (MU) witnesses significant declines in Q2 revenues and earnings, management's positive commentary on the company's current-quarter performance is making investors hopeful.
(Bloomberg) -- Micron Technology Inc. predicted stronger-than-expected revenue helped by a surge in orders from data center operators who are building more capacity to deal with the expansion of people working from home.Revenue will be $4.6 billion to $5.2 billion in the fiscal third quarter, which ends in May, Micron said Wednesday in a statement. Analysts had projected $4.88 billion, according to data compiled by Bloomberg. Adjusted earnings will be 55 cents a share, plus or minus 15 cents. Analysts, on average, estimated 52 cents a share.Micron is one of the first chip industry companies to report earnings and give predictions since millions of people have been told to stay home to help slow the spread of the Covid-19 pandemic. That huge shift in the workforce has placed a greater strain on the internet’s infrastructure, spurring demand for Micron’s memory chips and making up for some of the shortfall in orders for smartphone components, as shoppers stay away from stores.“In the data center market, we benefited from strong demand for our products from key cloud and enterprise customers, driven in part by ongoing strength in cloud markets, increased use of online properties such as e-commerce, and the surge in remote-work requirements due to COVID-19 containment measures,” Micron Chief Executive Officer Sanjay Mehrotra said in prepared remarks posted on the company’s website.In a slide presentation, Micron also cited increased gaming activity. While the markets for smartphones, consumer electronics and autos are below previous expectations, Micron said it’s seeing an increase in demand for notebooks to support work at home and virtual learning.The company has two employees who have tested positive for the virus. Through efforts to quarantine them, there hasn’t yet been an impact on the company’s manufacturing output, Micron said. The Boise, Idaho-based company has plants in Singapore, Malaysia and Japan, where the spread of the virus was felt sooner. That raised concern Micron’s output would slow. The company, however, said it has resumed manufacturing in Malaysia and found testing and assembly facilities in other parts of the world to help.“Micron still has ample inventory that would limit a near-term supply chain disruption,” Cowen and Co. analyst Karl Ackerman wrote in a report before the results were released. “The supply bottleneck has morphed into a demand challenge, however, and our field work on the smartphone and PC supply chains indicates low visibility for second calendar-quarter production.”The company makes dynamic random access memory chips, which help processors crunch data in computers and smartphones, and Nand flash memory, which stores information in those devices. Memory used in servers is typically more expensive and chips used in storage for those machines also usually commands a higher price.Micron cautioned that its numbers are a lagging indicator of orders for end products and that some customers may be stockpiling chips, which may mask the true picture of demand.Shares rose about 5% in extended-trading following the report. They closed at $42.50 earlier on Wednesday, leaving them down 21% this year.Net income in the period ended Feb. 27 fell to $405 million, or 36 cents a share, from $1.62 billion, or $1.42 a share, a year earlier. Revenue declined 18% to $4.8 billion. Micron’s biggest competitors are South Korea’s Samsung Electronics Co. and SK Hynix Inc.(Updates with comments from CEO in the fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Notebooks that support work-from-home and virtual learning are increasingly in demand, Chief Executive Officer Sanjay Mehrotra said on a post-earnings call with analysts. The jump in remote work is also powering a surge in demand for data center services. Mehrotra said data center business in China was boosted by increased gaming, e-commerce and remote-work activities as the country locked down many cities and regions to combat the outbreak.
Micron (MU) delivered earnings and revenue surprises of 18.42% and 3.04%, respectively, for the quarter ended February 2020. Do the numbers hold clues to what lies ahead for the stock?
In a blog post, the Semiconductor Industry Association, which represents chipmakers with major U.S. factories such as Intel Corp and Micron Technology Inc, said it was working with the U.S. Department of Homeland Security to refine the guidance sent to state and local officials last week. "Ensuring the continuity of semiconductor and related supply chains is necessary to support the even greater range of services that will be digitised in the coming weeks and months," he wrote. "Since the semiconductor supply chain is highly globalised, semiconductor shortages created by operating restrictions in one region cannot be readily made up by production in other regions."
High business exposure to China might have adversely impacted Micron's (MU) Q2 earnings, as the country has been on a lockdown since late January due to the coronavirus outbreak.
It is gearing up to be another potentially volatile week for markets as coronavirus cases continue to rise and economic data reveals the outbreak’s damage on the U.S. economy.
While Micron's (MU) Q2 results might reflect negative impact of demand-and-supply disruptions due to the coronavirus outbreak, resumption of chip shipments to Huawei is likely to have been a positive.
(Bloomberg) -- Apple Inc. kept its business rolling through the coronavirus pandemic this week by launching a new iPad Pro and two new Macs. But that doesn’t mean its supply chain is in the clear.Deliveries of the new products will begin arriving on doorsteps next week. However, production of those devices likely started in early January, before the worst effects of China’s virus lockdown in February, according to people familiar with Apple’s supply chain.With a fresh round of supplier factory closures enforced by Malaysia, and the virus disrupting operations in much of the rest of the world, the iPhone maker’s supply chain has not fully recovered yet.Apple’s next flagship iPhones, with 5G wireless capabilities, are still on schedule to launch in the fall, although that’s partly because mass production isn’t due to begin until May, said the people. They asked not to be identified discussing private supply chain issues.“Even as China comes back on line, we are beginning to wonder if Covid-19 will impact other supply oriented geographies,” Brad Gastwirth, chief technology strategist at Wedbush Securities, wrote in a recent note to investors. “While China is improving, the supply chain for the electronics industry may yet see substantial disruptions.”An Apple spokesman declined to comment. Chief Executive Officer Tim Cook, the architect of the company’s China-focused supply chain, said Feb. 28 that production issues would be a “temporary condition.”Apple’s assembly factories in China, run mainly by Hon Hai Precision Industry Co., were in low gear for much of February. The manufacturing giant, also known as Foxconn, hopes to begin operating normally by the end of March.The February slowdown led to iPhone and AirPods supply constraints, but those have begun to subside. This week, Apple has been limiting iPhone purchases to two per customer on its online store in several countries. In early March, the company warned retail employees about shortages of replacement iPhones.One new product unveiled this week suggests there’s strain on Apple’s supply chain, but also shows the company can still mass produce gadgets given enough time. The keyboard accessory for the iPad Pro was announced Wednesday but goes on sale in May, an unusual delay.Read more: Supply Shock Is Wiping Out Hopes of Smartphone Sales GrowthMass assembly is only one part of Apple’s supply chain. The company and its many partners spend months or years sourcing individual components that are assembled into final products. Any disruptions in this complex network could slow the introduction of future devices.One person who works in Apple’s supply chain said not all operations are moving at normal speed because the flow of components to assemble is still slow. It will take another month or more to get parts moving steadily through the system, the person added.Jabil Inc., which makes iPhone casings, recently said its factories in China were “near normal,” while plants in other parts of the world were running 5% to 10% below capacity.“Most of that is due to supply chain issues. In some odd way, as we sit today, I think China is the least of our concerns,” CEO Mark Mondello told analysts during a March 13 conference call. “We’re able to accommodate all of the demand that’s in front of us as long as we can get parts.”A two-week lockdown in Malaysia is affecting several key suppliers that have operations in the country. Murata Manufacturing Co., Renesas Electronics Corp. and Ibiden Co., which make chips and circuit boards for Apple, have halted production there.Micron Technology Inc., which makes memory chips for Apple devices, is also impacted, but said an exemption allows “limited semiconductor operations to continue.” Texas Instruments Inc. and On Semiconductor Corp. have facilities in Malaysia, too.Apple has suppliers and operations in other countries that have been hammered by the virus, including Italy, Germany, the U.K. and South Korea.Samsung Display and LG Display Co. make iPhone screens in South Korea, while many Apple engineers working on cellular modems are based in Munich, Germany. Apple also operates former Dialog Semiconductor Plc facilities that work on power-management chips in Livorno, Italy, Nabern and Neuaubing, Germany, and Swindon, U.K.Apple has several hundred research and development engineers for future processors and underlying technologies in Israel, which is only letting citizens leave their homes for essential reasons, like buying food and medicine.Read more: Israel’s Netanyahu Orders Near Total LockdownIn the U.S., Apple has suppliers such as Corning Inc. for glass, and Qorvo Inc., Skyworks Solutions Inc. and Broadcom Inc. for wireless chips. Broadcom Chief Executive Officer Hock Tan said recently that the virus “is going to have an impact on our semiconductor business, in particular in the second half of the fiscal year.”Chips take months to make and test, and companies build up months of inventory. That means Apple and other device makers may not have seen the worst of the disruptions yet.The virus is likely challenging Apple’s ability to design and test early versions of future products in Silicon Valley, which is grappling with a shelter-in-place mandate. The company has instated a remote work order, save for some mission-critical employees, for all its offices outside of China.San Francisco’s Shelter-in-Place Order Shows U.S. What’s to ComeThese struggles have yet to severely derail the 5G iPhone launch in the fall. During China’s factory shutdown in February, Apple was able to build a limited number of test versions of the new models, one of the people familiar with the company’s supply chain said.Apple finalizes the majority of design features for new iPhones between November and December of the year prior to launch, the people said. It begins mass-producing new casings around April and then starts a late manufacturing stage called Final Assembly, Test and Pack in about May.Should Apple be unable to send full teams of engineers to China factories to finalize designs and resolve issues, this typical timeline could still slip, another person familiar with the company’s supply chain said.(Updates with Jabil comments in 12th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.