Despite the long and outstanding run for the semiconductor segment, one thing has become quite apparent over the past decade. The industry has dramatically evolved and no longer is it simply about providing chips for personal computers and laptops. With automotive and industrial applications growing fast, smartphones growing ever more functional and video gaming and data center growth skyrocketing, the future remains very positive for the group.
In a series of new research reports, Deutsche Bank provides updates from meetings with top executives at semiconductor companies the firm covers, and while most remain confident on the future, some do acknowledge the cyclical nature of the segment. With that in mind, five top companies were highlighted, and all are rated Buy at Deutsche Bank.
This small cap company is a strong contender in the data center arena. Inphi Corp. (NYSE: IPHI) provides high-speed analog and mixed-signal semiconductor solutions for the communications, data center and computing markets worldwide.
Its end-to-end data transport platform delivers high signal integrity at leading-edge data speeds, addressing performance and bandwidth bottlenecks in networks, from fiber to memory. Inphi has solutions that minimize latency in computing environments and enable the rollout of next-generation communications infrastructure.
The company announced back in the spring that, along with Innovium, it is partnering to provide customers multiple highly scalable industry-leading 100 G to 400 G data center solutions to meet their explosive bandwidth demand growth.
The Deutsche Bank price target for the shares is $40, and the consensus target was last seen at $38.04. The stock closed trading on Thursday at $35.19 a share.
Last year the company announced a bold $6 billion bid to buy Cavium. Marvell Technology Group Ltd. (NASDAQ: MRVL) is a fabless supplier of mixed-signal and analog semiconductor products to a number of storage, computing and communication applications, including hard disk drives, personal computers, servers, Ethernet switches, printers and connectivity markets.
Top analysts around Wall Street are very positive on the company’s purchase of Cavium, and many feel the deal adds significantly to the growth element for the stock. The addition also helps make Marvell solidly positioned in data center, cloud, enterprise, security and 5G.
The company has cleared the final hurdle to acquire Cavium, as it received the necessary approval from China’s State Administration for Market Regulation. The company expects to complete the merger this month, but the trade issues need to be watched.
Shareholders receive a 1.29% dividend. Deutsche Bank has a $25 price target on the stock, but the posted consensus price objective is $27.45. The stock closed Thursday’s trading at $18.54.