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Applied Materials Inc. (NASDAQ: AMAT) is off its highs but still higher on the day after the company raised its dividend and announced a share buyback plan. The company’s board of directors boosted the quarterly dividend from $0.06 to $0.07 and authorized a share buyback plan of up to $2 billion over the next 3-year period. What is more important than just a buyback and dividend raise is what it does for the semiconductor sector. The chip sector is very divided as you have circuits, communications, PCs, and the cap-ex side of the equation. And more.
Today’s news on top of other recent dividend hikes and share buyback hikes is only going to add more pressure for other chip stocks to increase their dividend payments and perhaps to keep buying back stock. Here we are looking at Intel Corporation (NASDAQ: INTC), Xilinx Inc. (NASDAQ: XLNX), Altera Corporation (NASDAQ: ALTR), Texas Instruments Inc. (NYSE: TXN), QUALCOMM Inc. (NASDAQ: QCOM), Broadcom Corporation (NASDAQ: BRCM), Marvell Technology Group Ltd. (NASDAQ: MRVL), Advanced Micro Devices Inc. (NYSE: AMD), Micron Technology Inc. (NYSE: MU), and KLA-Tencor Corporation (NASDAQ: KLAC). We wanted to compare dividend yields, some brief history, and a potential of whether other dividend hikes will be coming down the road in the various aspects of semiconductors.
Applied Materials at the new dividend rate will yield about 2.25%. As far as how this compares to other chip leaders, Intel Corporation (NASDAQ: INTC) already yields 3% today after it already raised its dividend earlier this year from $0.14 to $0.158 per quarter.
Then there is Xilinx Inc. (NASDAQ: XLNX), which also pays a 2.4% dividend now that it hiked its dividend from $0.14 to $0.16 in late-2009. Xilinx has been a higher paying company in the sector for some time. The other circuit and PLD player that gets grouped with Xilinx is Altera Corporation (NASDAQ: ALTR). As far as which company has a higher yield, it is not even close. Altera has a payout of only 0.85% for its dividend yield and it has been far less aggressive in payments to shareholders.
The big trade out there had been in Texas Instruments Inc. (NYSE: TXN). That company was buying back more stock than almost any chip company for years. It also raised its dividend in 2009 and the yield there is now 1.9%. Interestingly enough, QUALCOMM Inc. (NASDAQ: QCOM) just saw about a 10% recovery after the company raised its dividend and its buyback plan. It had been in a steady slide lower after average selling prices were heading south ahead.
Broadcom Corporation (NASDAQ: BRCM) only recently embarked upon a dividend paying strategy. At $0.08 in payments per share per quarter, the yield here is only about 1%. That comes to $0.32 per year, yet the Thomson Reuters estimates are $1.97 EPS for 2010. This is just the first of its dividends, assuming the earnings come in close to estimates, with more than enough dividend coverage for Broadcom to hike its payout.
Of the big communications chip makers and designers, Marvell Technology Group Ltd. (NASDAQ: MRVL) is without a dividend. Its earnings estimates ahead from Thomson Reuters are $1.50 EPS and $1.66 EPS for the next two years. It seems that a dividend policy could be coming down the road. Maybe, maybe not.
Advanced Micro Devices Inc. (NYSE: AMD) and Micron Technology Inc. (NYSE: MU) are still likely farther away than closer to setting quarterly payouts. Both companies have been in a turnaround mode for years and it is more than understandable that these need to hold on to their cash. Micron is in a merger, and AMD is… well they are AMD. It is far too soon to start speculating about or demanding dividends from these two.
Without trying to get too broad, Applied Materials is on the cap-ex side of the semiconductor sector. On that front KLA-Tencor Corporation (NASDAQ: KLAC) is considered the number two player behind it and KLA has had the same $0.15 dividend since Q3-2007. So that comes to $0.60 in annual payouts for a 2% dividend yield, but its Thomson Reuters earnings estimates are $1.22 EPS this year (June-end) and $2.24 EPS next year. Expecting a huge payout boost here may be premature considering that business on the cap-ex side of the chip sector is nowhere near as strong as what we have seen in other aspects of the chip recovery.
These are only some of the major semiconductor and semiconductor equipment players out there. There are dozens of others which could be named. The semiconductor recovery is happening and we are seeing selective dividend payment boosts. An issue to consider is whether the economic recovery holds up or whether it falters if the 2011 tax and spending situation become more finite.
It seems that more dividend hikes (and possibly share buybacks) will come. But the sector is still in many cases short of its former glory and this week just a year ago was when the investing public was caught somewhere between looking like a deer in the headlights and wanting to jump off a cliff.
JON C. OGG
At the recent Design Verification conference in San Jose California, DVCon, I had an opportunity to speak to the folks at EDA Cafe' about our products and our recent announcements. Graham Bell of EDA Cafe' conducted the interview and they were nice enough to videotape it and offer it on the web for you to see. Click on the following image to view the interview.
Very good news. We have a new Amiga AGA compatible motherboard based in fpgas.
I’ll buy one.
More info in:
- Amiga.org
- http://www.fpgaarcade.com/
If you are creating automatic stimulus using the randomize() method and you need a value to be one-hot, you can use the built in $onehot assertion. This assertion returns a 1 if the value inside it is a one-hot. The assertion looks like this:
assert(myreq.randomize() with{
$onehot(onehot_reg) == 1;});
This code will clear all the bits in onehot_reg then randomly set one of them.
Hi my name is Vineet and today we are talking about FPGAs. You might have heard of FPGAs recently in all different industries. And being curious as to what FPGAs actually are, how they work.
read more
On April 14th I’ll be at the Mentor Graphics User Group meeting delivering a presentation called, “What Now? Smoothly Adopting Verification Technologies.”
The meeting is at the Westford Regency and there’s no charge. It’s going to be fun, and I hope to see you there.
You can sign up at this link: http://user2user.mentor.com/westford-ma-april-14-2010
One of the great champions of FPGAs and programmability in general, Clive "Max" Maxfield, is set to defend his views on the advantages of these magical devices at the upcoming Embedded System Conference Silicon Valley. Max, no engineering lightweight, will take on Jim Turley in a ‘no holds barred' debate - some would call it a smack down (as Max himself has) - on which approach to processor-based design is the best. Max will naturally take the side of the FPGA loyalists, and wax poetically about how embedding a processor within a programmable device is a logical way to do things (we have seen this trend take off, with around 40% of high end FPGA designers currently doing just that). He'll fend off Jim's counter attacks on the rationale for why sticking with off the shelf, standalone methods is the best way to go for microprocessors and microcontrollers.Of course, you know which corner GateRocket will be in. But a word of warning to Max and all your FPGA fans - ! That's why more and more system designers who use complex FPGAs as either prototyping platforms or in production applications are looking to GateRocket to help them with their debug and verification challenges. These can be especially tricky as you bring in more IP and embedded functionality. With our Device Native approach to debug and verification, you can quickly and easily find errors and correct them within the context of the device you are targeting.
If you are going to be at ESC this year, make sure you get yourself a ringside seat at this heavyweight match-up. The opening bell rings Tuesday April 27 at 4:30 in ESC Theatre 1.