It’s The Dawn Of A New Age
As cliche as it may sound, it is the dawn of a new age. Not only has the shift to digital accelerated in response to the pandemic but trends within the industry are about to unleash the future of technology. What I’m talking about is 5G. 5G has gotten a lot of attention I know but I don’t think most people really understand what it means. With 5G, all IoT devices can function much closer to “real-time”. That’s going to allow devices and technology to work in ways we’ve only seen in movies and those will all be powered by microchips.
What 5G is also going to bring is specialization. As devices become more sophisticated and desirable functions more advanced, the need for specialty chips and chipmakers is going to grow. Just think about Electric Vehicles. Electric Vehicles require hundreds if not thousands of highly specialized chips and that’s not including self-driving cars. The chips required for a truly autonomous and safe self-driving car are even greater.
Himax Technologies Raises Guidance
Himax Technologies (NASDAQ:HIMX) is a fabless semiconductor manufacturer specializing in display imaging processing. The company’s products can be found in anything with a screen including touch-screens and other consumer applications. In terms of its size, annual revenue in fiscal 2020 will run near $825 million.
The company just issued an update to its guidance that sets new targets for Q3 results above the range it set just two months ago. Execs say the business has been boosted by increased demand across all product lines and, based on the numbers, that demand is accelerating. The company is expecting revenue to come in around $240 million or up 28% sequentially versus the 20% previously stated. That’s worth 46.1% YOY.
“We are seeing continued strong business momentum across all our major business sectors in the fourth quarter. We will give further details in the next earnings call,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax. The next release is due out in early November but has not yet been confirmed.
Alpha And Omega Semiconductor Raises Guidance
Alpha and Omega Semiconductor (NASDAQ:AOSL) makes a variety of power control semiconductors that can be found in virtually all types of digital products. The company has also just increased its guidance and looking good for accelerating growth in the next few years. The 3Q revenue is now expected in a range well above the previously stated with EPS to “significantly exceed the current consensus”. Results are being driven by robust demand across all product lines and could lead to a solid beat despite the guidance revisions.
Ambarella A Buy After Q3 Earnings
Ambarella (NASDAQ:AMBA) designs and manufactures visual processing semiconductors for computer vision applications. When it comes to high-end video processors, Ambarella literally created the industry with its solid-state processors. When it comes to computer vision, there is virtually no industry that can not benefit from it. The company’s product applications range from security/risk assessment through industrial process and quality control with an emphasis on electric/self-driving vehicles. Basically, any computer that needs to see something is probably powered by a chip from Ambarella.
"We are encouraged by the growing acceptance of our visual AI products, despite the economic consequences of the pandemic and the continuation of the geopolitical risks. We remain confident 10% of our total revenue will be earned from CV products in fiscal year 2021.
Moreover, our automotive sales funnel is beginning to build, with more than three dozen unique automotive customers assessing and/or developing CV-based products during Q2,” says Ambarella CEO Fermi Wang.
Ambarella’s revenue took a hit due to the pandemic but signs are good the rebound strong. In terms of the analysts, the company is on track to smash the full-year consensus in the fiscal 3rd quarter which leads me to believe there will be some upgrades coming out soon. The most recent nod came from Rosenblatt securities who listed the stock as one to buy on recent weakness and I concur, this stock is a buy.
