Jefferies-Blaynes Bytes AVGOMRVL EPS Recap NVDA CoWoS ONALGM MC

Summary of Key Points from the Conference Call Industry Overview - Industry: Semiconductors - Date: March 7, 2025 Company-Specific Insights Broadcom (AVGO) - Market Opportunity: AVGO reiterated a Serviceable Available Market (SAM) of $60-90 billion by FY27, indicating strong growth potential in the semiconductor space [2][2] - Customer Engagements: Announced two new hyperscale customer engagements, enhancing their market position [2][2] - AI Sales Growth: AI Networking contributed significantly, accounting for 40% of AI sales, showcasing the company's strong performance in AI-related products [2][2] - Export Restrictions: Management noted no current impact from export restrictions, contrasting with reports of a canceled chip order from ByteDance [2][2] Marvell Technology Group Ltd. (MRVL) - Earnings Performance: MRVL's stock fell approximately 20% following disappointing earnings and guidance, particularly regarding Trainium2 volumes [3][3] - ASP Adjustments: Average Selling Price (ASP) was lowered to $2,000, reflecting challenges in unit shipments [3][3] - Positive Outlook: Despite short-term challenges, management expressed optimism about their relationship with Amazon and future generations of Trainium [3][3] - Optical Momentum: Continued growth in optical products, particularly in 800G and 1.6T segments [3][3] NVIDIA Corporation (NVDA) - Demand Outlook: Fubon lowered NVDA's CoWoS demand expectations for 2025 due to demand and production issues, with Q1 production dropping to 400-500k from 700k in Q4 [4][4] - Product Shift: Noted a shift from air-filled racks to liquid-cooled solutions, impacting demand for certain products [4][4] - Strong Blackwell Demand: Despite the overall outlook, demand for Blackwell remains robust, with no cancellations from customers [4][4] ON Semiconductor Corporation (ON) - Acquisition Proposal: ON's acquisition proposal for Allegro MicroSystems (ALGM) was rejected, offering a 57% premium at $35.10 per share [5][5] - Strategic Rationale: The acquisition aimed to strengthen ON's portfolio in Autos and Industrials, with minimal product overlap [5][5] - Financial Implications: The transaction is expected to be gross margin accretive immediately, with EPS accretion anticipated by 2027 [7][7] Microchip Technology Inc. (MCHP) - Business Update: MCHP reported improved booking trends in January and February, with operational expenses decreasing [8][8] - Cost Savings: Expected annualized savings of $100 million, with partial realization in the June quarter [8][8] - Cyclical Recovery: MCHP is viewed as a cyclical recovery play, currently operating at 50% below normalized run rates [8][8] Additional Insights - Market Sentiment: The semiconductor industry is experiencing volatility, with companies like AVGO and MCHP positioned for growth despite challenges faced by others like MRVL and NVDA [2][3][4][8] - Investment Recommendations: Companies mentioned in the report include AVGO, MRVL, NVDA, ON, and MCHP, with varying outlooks based on their recent performance and market conditions [31][31] This summary encapsulates the key points from the conference call, highlighting the performance and outlook of major players in the semiconductor industry.