Bulletin
Investor Alert

Earnings Outlook Archives | Email alerts

Jan. 26, 2022, 1:22 p.m. EST

Chips may be sold out for 2022 thanks to shortage, but investors are worried about the end of the party

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Intel Corp. (INTC)
  • X
    ASML Holding N.V. (ASML)
  • X
    Taiwan Semiconductor Manufacturing Co. Ltd. ADR (TSM)

or Cancel Already have a watchlist? Log In

By Wallace Witkowski

1 2

“While multiples have compressed to start the year, we see no changes to the sector’s long-term prospects with secular trends outweighing cyclical concerns,” Ramsay said. “While it has been a tumultuous start to the year, perspective is warranted as most names in our coverage universe are coming off all-time highs with this selloff providing investors opportunity for profit-taking or the ability to re-enter/build positions at more favorable valuations.”

Read: The pandemic boom in videogames is expected to disappear in 2022

Bank of America analyst Vivek Arya said he remained “bullish on semis – the new ‘oil’ of the rapidly digitizing global economy.”

Following 2021’s growth, Arya expects 13% growth in chip sales of $619 billion total in 2022, with memory sales rising 21%, and 10% growth in non-memory chips. Interest rate increases from the Fed, however, “are the biggest risk to semi industry valuation for CY22 in our view, leading to a potentially weak Q1,” Arya said.

Underscoring the high bar chip companies are facing, the PHLX Semiconductor Index /zigman2/quotes/210598361/realtime SOX -2.63% that tracks major chip stocks soared 60% in 2019, 51% in 2020, and 41% in 2021. By comparison, the S&P 500 index /zigman2/quotes/210599714/realtime SPX -2.01% gained 29% in 2019, 16% in 2020, and 27% in 2021. Year-to-date, the SOX index is down more than 11%, while the S&P 500 is off 7%.

On top of that, just before earnings season kicked off for U.S. chip makers, the sector moved dangerously close to slipping into bear market territory on Monday and Tuesday.

The outlooks are already rolling in with Texas Instruments Inc. /zigman2/quotes/202237907/composite TXN -0.94% reporting a strong quarter and outlook late Tuesday , and Intel is scheduled to report late Wednesday. Intel’s earnings come just a few weeks after announcing it poached Micron Technology Inc.’s /zigman2/quotes/205710729/composite MU -1.57% CFO David Zinsner and named Michelle Holthaus to head its largest business unit, client computing, better known as the PC business.

Suppliers of chip manufacturing equipment are also on deck: Lam Research Corp. /zigman2/quotes/208077897/composite LRCX -2.56% is scheduled for Wednesday and KLA Corp. /zigman2/quotes/209248041/composite KLAC -2.51% on Thursday. Earnings and outlooks from those companies are key in gauging the speed of the industry’s increase of manufacturing capacity.

Company name and ticker symbol Report date (*estimated) FactSet EPS est. (as of Jan. 21) FactSet revenue est. (as of Jan. 21)
Texas Instruments TXN Jan. 25 $1.95 $4.43 billion
Intel INTC Jan. 26 90 cents $18.33 billion
Lam Research LRCX Jan. 26 $8.51 $4.41 billion
KLA Corp. KLAC Jan. 27 $5.44 $2.33 billion
AMD AMD Feb. 1 76 cents $4.52 billion
Qualcomm QCOM Feb. 2 $3.01 $10.44 billion
GlobalFoundries GFS Feb. 8 11 cents $1.81 billion
Nvidia NVDA Feb. 16 $1.22 $7.41 billion
Marvell MRVL Mar. 10* 48 cents $1.32 billion
Broadcom AVGO Mar. 17* $8.13 $7.61 billion
Micron MU Mar. 30* $1.96 $7.52 billion

Advanced Micro Devices Inc. /zigman2/quotes/208144392/composite AMD -6.24% , with a new line of gaming cards , is scheduled to report earnings of Feb. 1. Recently, Piper Sandler analyst Harsh Kumar downgraded AMD on concerns that a slowdown in the PC market, and NXP Semiconductors NV /zigman2/quotes/202999625/composite NXPI -2.92% on a slowdown in auto chip sales when supply normalizes.

Qualcomm Inc. /zigman2/quotes/206679220/composite QCOM +3.48% is scheduled to report Feb. 2, and eyes will be on the company’s 5G sales forecast as AT&T Inc. /zigman2/quotes/203165245/composite T -0.82% and Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ -0.98% postpone rollouts of 5G service near airports as airlines alter flight schedules in a continuing debate on how the technology’s signal affects aircraft.

After that, GlobalFoundries Inc. /zigman2/quotes/230483311/composite GFS -2.31% reports on Feb. 8; Nvidia Corp. /zigman2/quotes/200467500/composite NVDA -5.26% , which recently showcased its new gaming cards , is scheduled to report on Feb. 16, the day right before Intel’s investor day . Recently, Nvidia experienced a big setback when the U.S. sued to block the company’s acquisition of chip designer Arm Ltd., causing the chip maker to reportedly give up on the deal.

After that, Marvell Technology Inc. /zigman2/quotes/200053236/composite MRVL -4.89% is forecast to report around March 10, while Broadcom Inc. /zigman2/quotes/200646538/composite AVGO -1.44% is estimated to report around March 17, and Micron, which reported last in late December, is expected to report its earnings around March 30.

/zigman2/quotes/210598361/realtime
US : Nasdaq
2,642.07
-71.40 -2.63%
Volume: 296,108
June 28, 2022 5:16p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,821.55
-78.56 -2.01%
Volume: 2.25B
June 28, 2022 5:33p
loading...
/zigman2/quotes/202237907/composite
US : U.S.: Nasdaq
$ 154.16
-1.46 -0.94%
Volume: 4.69M
June 28, 2022 4:00p
P/E Ratio
17.63
Dividend Yield
2.98%
Market Cap
$143.50 billion
Rev. per Employee
$591,742
loading...
/zigman2/quotes/205710729/composite
US : U.S.: Nasdaq
$ 57.86
-0.92 -1.57%
Volume: 19.39M
June 28, 2022 4:00p
P/E Ratio
7.28
Dividend Yield
0.69%
Market Cap
$65.64 billion
Rev. per Employee
$644,302
loading...
/zigman2/quotes/208077897/composite
US : U.S.: Nasdaq
$ 438.26
-11.53 -2.56%
Volume: 937,880
June 28, 2022 4:00p
P/E Ratio
13.70
Dividend Yield
1.37%
Market Cap
$62.39 billion
Rev. per Employee
$1.04M
loading...
/zigman2/quotes/209248041/composite
US : U.S.: Nasdaq
$ 330.09
-8.50 -2.51%
Volume: 1.28M
June 28, 2022 4:00p
P/E Ratio
16.02
Dividend Yield
1.27%
Market Cap
$50.53 billion
Rev. per Employee
$612,243
loading...
/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 80.78
-5.38 -6.24%
Volume: 95.64M
June 28, 2022 4:00p
P/E Ratio
30.13
Dividend Yield
N/A
Market Cap
$139.62 billion
Rev. per Employee
$1.06M
loading...
/zigman2/quotes/202999625/composite
US : U.S.: Nasdaq
$ 154.22
-4.64 -2.92%
Volume: 3.23M
June 28, 2022 4:00p
P/E Ratio
19.14
Dividend Yield
2.19%
Market Cap
$41.71 billion
Rev. per Employee
$356,871
loading...
/zigman2/quotes/206679220/composite
US : U.S.: Nasdaq
$ 131.60
+4.42 +3.48%
Volume: 27.10M
June 28, 2022 4:00p
P/E Ratio
13.48
Dividend Yield
2.28%
Market Cap
$142.44 billion
Rev. per Employee
$745,911
loading...
/zigman2/quotes/203165245/composite
US : U.S.: NYSE
$ 20.61
-0.17 -0.82%
Volume: 26.75M
June 28, 2022 4:03p
P/E Ratio
8.71
Dividend Yield
5.39%
Market Cap
$148.76 billion
Rev. per Employee
$831,842
loading...
/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 50.46
-0.50 -0.98%
Volume: 16.62M
June 28, 2022 4:00p
P/E Ratio
9.81
Dividend Yield
5.07%
Market Cap
$214.01 billion
Rev. per Employee
$1.13M
loading...
/zigman2/quotes/230483311/composite
US : U.S.: Nasdaq
$ 44.37
-1.05 -2.31%
Volume: 2.29M
June 28, 2022 4:00p
P/E Ratio
248.53
Dividend Yield
N/A
Market Cap
$24.16 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 159.82
-8.87 -5.26%
Volume: 46.14M
June 28, 2022 4:00p
P/E Ratio
42.89
Dividend Yield
0.10%
Market Cap
$421.73 billion
Rev. per Employee
$1.20M
loading...
/zigman2/quotes/200053236/composite
US : U.S.: Nasdaq
$ 45.32
-2.33 -4.89%
Volume: 10.32M
June 28, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.53%
Market Cap
$40.50 billion
Rev. per Employee
$663,157
loading...
/zigman2/quotes/200646538/composite
US : U.S.: Nasdaq
$ 498.45
-7.26 -1.44%
Volume: 1.57M
June 28, 2022 4:00p
P/E Ratio
24.71
Dividend Yield
3.29%
Market Cap
$204.21 billion
Rev. per Employee
$1.37M
loading...

1 2
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.