<span style='color:red'>Analysts</span> see 'several signs of modest progress' in latest US-China trade talks
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Analysts see 'several signs of modest progress' in latest US-China trade talks

In the wake of the latest round of trade talks between officials from Washington and Beijing, outside observers are noting that some progress appears to have been made — but there's still a long way to go before a meaningful deal.On Wednesday, the U.S. trade delegation released a statementnoting a long list of outstanding issues in the relationship between the world's two largest economies — including "forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services, and agriculture."Still the official statement also recognized that China had pledged to buy "a substantial amount of agricultural, energy, manufactured goods, and other products and services" from the U.S. Some analysts said that language, in addition to the meeting extending to a previously unannounced third day, indicated some potential thawing in the dispute."There were several signs of modest progress from these mid-level talks. First, negotiations went a day over the original schedule, indicating enough substantive discussion to at least keep officials at the table. Day three reportedly focused on the more knotty structural issues raised by the US side in detailed demands presented to Beijing in May 2018," a group of experts from political risk consultancy Eurasia Group wrote in a Wednesday note.They added: "Second, (the U.S. Trade Representative's) statement noted that China has pledged to purchase a 'substantial amount' of US exports, including agriculture, energy and manufactured goods. That language suggests that, as we expected, Beijing is carrying out a strategy of aggressively purchasing US goods — playing to (U.S. President Donald Trump's) focus on reducing the trade deficit — in the hopes that it lessens the pressure on China to undertake difficult structural measures."China, for its part, said in a Thursday morning statement issued by its Commerce Ministry that the just-concluded round of trade talks with the U.S. were extensive and established a platform for future discussions."Both sides ... held broad, deep and meticulous discussions on shared observations on trade issues and structural problems, laying the foundation for addressing areas of common concern," the statement said, according to a CNBC translation of the original Chinese.Even before the talks were extended into a third day, the analyst community was already seeing a positive sign when China's top trade negotiator, Liu He, reportedly stopped by the negotiating room on Monday. Given the vice-ministerial level of the talks, that was interpreted as a strong signal that Beijing was taking negotiations seriously.In early December, Trump and Chinese President Xi Jinping agreed to a temporary ceasefire, giving both sides until March to reach some agreement on trade and issues such as the forced transfer of technology.Trade tensions between the world's two largest economies escalated last year, putting global markets on edge. The U.S. announced tariffs on $250 billion worth of Chinese goods, while Beijing countered with its own battery of levies.Both parties, the Beijing ministry said, agreed to maintain close contact.In response to the U.S. statement on the talks, U.S.-China Business Council President Craig Allen said in a release that his group was "pleased that the two governments had substantive discussions over the past three days."Still, he noted that the business community is concerned about more than just the overall balance of trade between the two economic superpowers — a problem that is at least partially addressed by Beijing's pledge to purchase more U.S. goods and services."We urge both governments to use the time remaining in the 90-day negotiating period to make tangible progress on the important issues at the core of the current dispute: equal treatment of foreign companies in China, as well as China's intellectual property and technology transfer policies," Allen said.Beijing has denied that it forces foreign companies to transfer technology to Chinese parties in exchange for market access, but it has in various ways acknowledged that it could do more to allow overseas players an equal footing within its borders. To what extent such reforms are truly on the Communist Party's agenda remains a matter of debate.Another "elephant in the room" in the trade relations between China and the U.S. is additional tariffs that both countries have imposed on each other's products, said Eric Robertsen, head of global macro strategy at Standard Chartered."Now, trade is only one part of this, the bigger picture issues around intellectual property, forced sharing of technology et cetera I don't think those get addressed in the short term," Robertsen told CNBC's "Squawk Box" on Thursday."Remember, the thing that we have to solve for is getting to the end of the negotiating period and making sure that enough progress has been made so that tariffs not lifted, we still have that elephant in the room of tariffs," he added.Market reactionsAsian markets were mostly lower on Thursday after the end of the latest U.S.-China trade talk. Stock markets globally rallied earlier in the week on optimism that both countries were making progress on trade."Markets have been quite optimistic about this trade talk, so that's why we're seeing some profit-taking after the rally. I think the result was pretty much as expected so people are not too excited and they probably will look forward to another meeting," Alex Wong, director of asset management at Ample Capital, told CNBC's "Squawk Box."
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Release time：2019-01-10 00:00 reading：1334 Continue reading>>
Q’comm Rejects B’com Board, But <span style='color:red'>Analysts</span> Bullish
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Q’comm Rejects B’com Board, But Analysts Bullish

　　Qualcomm officially rejected Broadcom’s proposed 11-director board, setting a showdown on the semiconductor industry’s largest merger to date for the Qualcomm annual stockholders’ meeting March 6.　　While Qualcomm remains adamantly against the deal, Wall Street analysts are already crunching the numbers. They are generally bullish on the deal and on Broadcom after a strong quarterly report earlier this month.　　In a press statement, Qualcomm said the board members proposed by Broadcom and its private equity partner, Silver Lake, “are inherently conflicted and would not bring incremental skills or expertise to the Qualcomm board.” Broadcom’s initial $70/share bid “dramatically undervalues Qualcomm and is not actionable due to its significant regulatory uncertainty, which may not be resolved for 18 months, if ever,” it added.　　In an SEC filing it proposed continuing its current board of 11 with nine outside directors including a former chairman of American Airlines, a former U.S. Ambassador to China, a former Secretary of State in Spain and chief executive of Palo Alto Networks. Qualcomm CEO Steve Mollenkopf and former CEO Paul Jacobs, who chairs the board, would continue as directors.　　If Broadcom fails to convince shareholders to vote for its proposed board, it is expected to increase its bid to $77/share, according to a December 7 note from Canaccord Genuity financial analysts. It calculated generally positive scenarios of bids at five levels ranging up to $100/share.　　The analysts estimated the combined company would generate $56 billion in revenues and $14.8 billion in profits in fiscal year 2018 if the deal includes Qualcomm’s proposed acquisition of NXP. Without NXP, it forecast 2018 combined revenues of $46 billion and profits of $13.6 billion.　　In either case, it assumed cost reductions of $750 million in 2018 and $1.5 billion in 2019. It also assumed Qualcomm would make $500 million in cuts at NXP if that deal is approved.　　“There is the potential for Broadcom to help settle licensing disputes with Apple in a more timely manner than Qualcomm might, given Broadcom’s strong relationship with Apple, and…the very strong position held by Broadcom's switching/routing chipset business with key vendors including Cisco could prove an important beachhead in the datacenter market for Qualcomm's new ARM-based server offerings,” it said.　　Separately, Morgan Stanley issued a Dec. 21 report noting among other items that Broadcom has an emerging ASIC business in machine learning it expects could be “approaching $500 million in revenue in the next 2-3 years.” Morgan Staley also acts as an advisor to Broadcom in its move to acquire Qualcomm.
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Release time：2017-12-26 00:00 reading：1387 Continue reading>>
<span style='color:red'>Analysts</span> Applaud Marvell-Cavium Deal
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Analysts Applaud Marvell-Cavium Deal

　　Marvell will get an infusion of growth and Cavium may see a path to profitability from their proposed $6 billion merger. However, the more diversified chip maker that will result from the merger still faces relatively modest prospects for growth in revenues and profits, said analysts who applauded the deal.　　Marvell estimated the two companies will have a total $3.4 billion in annual revenues growing at an average of 6 to 8 percent a year. That’s only slightly ahead of past projections for Marvell and the long-term average for the semiconductor industry overall.　　The two companies have relatively minor overlap in products and customers. Executives said they have no plans for cutting products, but they do see savings in the first 18 months of up to $170 million from shared R&D and offices and reduced overhead.　　Cavium brings nearly a billion-dollars a year in sales of a wide range of networking and comms chips and boards. Marvell’s products mainly consist of hard-disk and solid-state controllers, Ethernet switches and Wi-Fi and Bluetooth chips.　　The two companies occupy a “middle ground below Broadcom, Intel and Qualcomm, but they are not small enough to be easily acquired,” said Linley Gwennap, principal of the Linley Group. He called the deal “overall positive,” noting both companies have embraced ARM cores, making it easier to merge and manage products lines.　　Marvell ranks 33rd among top semiconductor makers with $2.4 billion in revenue, according to IC Insights. The two are a good fit, said Rob Lineback, senior analyst for the company, but he noted Cavium, focusing on fast growth, has “posted five years of annual net losses and is headed for a sixth straight net loss in 2017.”　　The deal “creates cost-efficient scale and complementary product offerings that may boost future revenue growth potential,” Ross Seymore, analyst with Deutsche Bank, wrote in a research note. The 11-20 percent premium Marvell offered for Cavium “is a somewhat surprisingly attractive price” compared to typical semiconductor acquisitions paying 25-30 percent premiums, he added.　　The deal comes at a time when Marvell’s Prestera line of Ethernet switches has “turned the corner and returned to growth” as second only to Broadcom, said Bob Wheeler, comms analyst at the Linley Group. He speculated a future Cavium XPliant switch could appear on the Prestera road map as its first programmable part.　　For its part, Cavium has been running a distant third to Intel and NXP in embedded comms processors with its Octeon line, its strongest product. The future of Cavium’s ThunderX ARM server SoC is less clear under a cost-conscious Marvell, he added.　　Cavium helps Marvell diversify beyond controllers and read channels for hard drives which make up the largest chunk of its business. The hard drive market will have a long tail with profits and growth crowded into the high-capacity segment for data center drives, said Tom Coughlin, veteran storage analyst with Coughlin Associates.　　“Although hard drive units are declining, overall capacity shipped continues to rise…Tape drives are still around though people claimed for years they were dead, and now hard drives are likely moving into a similar position,” he said.　　Marvell only recently competed an 18-month reorganization that shed nearly 40 percent of its employees, including its former chief executive Sehat Sutardja and president Weili Dai, his wife. The co-founders resigned amid investigations of accounting practices after revenues and profits fell from $3.6 billion and $435 million in 2015, respectively, to $2.6 billion with an $811 million loss a year later.　　Last year, the company reported revenues of $2.3 billion and a $21 million profit. It essentially replaced its entire board and top tier management, naming Matthew Murphy, a senior executive from Maxim Integrated, its chief executive in June 2016. Murphy has hired a half-dozen execs, including in May Neil Kim, the former head of central engineering at Broadcom, who became Marvell’s CTO.　　For its part, Cavium has seen revenue growth well above the industry average, but has yet to break into the black. Revenues rose from $235 million 2012 to $603 million last year when it lost $146 million.　　In the first nine months of this year, Cavium’s revenues rose another 40 percent, in part thanks to its $1 billion acquisition of QLogic in 2016. However. Cavium has not trimmed loses at the same rate as its growth.　　Murphy said he first met Cavium co-founder and CEO Syed Ali a decade ago. The two have been discussing the possibility of a merger since he joined Marvell, Murphy said in a conference call.　　Together the two companies will have about 10 percent of their revenues in the fast-growing data center market and hold more than 10,000 patents. The deal will reduce the amount of revenues coming from hard-disk chips from 35 to 25 percent, Murphy said.　　“I think we will still have higher R&D as a percentage of sales of any peer…and given we have almost no product overlap we expect no significant regulatory challenges,” Murphy said.　　Murphy was clear the deal is an acquisition in which he remains in control as CEO but shares power with Ali and at least one other Cavium executive who will sit on the new company's board. "We won't be called Marvellium or Carvell," he quipped.
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Release time：2017-11-22 00:00 reading：3406 Continue reading>>

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