|Bid||23.94 x 427900|
|Ask||23.95 x 8100|
|Day's range||23.91 - 24.47|
|52-week range||10.13 - 24.87|
|Beta (5Y monthly)||1.49|
|PE ratio (TTM)||76.41|
|Earnings date||09 Nov 2020|
|Forward dividend & yield||0.27 (1.12%)|
|Ex-dividend date||21 Feb 2020|
|1y target est||23.20|
(Bloomberg Opinion) -- Tech has suddenly become a defining issue for the U.K. government. A $40 billion deal for Cambridge-based chip designer Arm Ltd. comes as technology policy has created an obstruction in Brexit negotiations. The government that hailed Arm’s first sale in 2016 as a sign of Britain’s post-Brexit allure has come a long way.Britain’s EU trade talks — and possibly a future trade deal with the U.S. — are poised on a knife’s edge. Prime Minister Boris Johnson and his chief advisor, Brexit campaign mastermind Dominic Cummings, believe the EU’s rules governing subsidies and other state aid to industry get in the way of post-Brexit Britain becoming a science and technology powerhouse. They are threatening to walk away from the trade talks, and to break the U.K. treaty commitments, to avoid the EU’s rules. On one level, this seems an odd fight to pick. It’s not that Britain lacks innovation — as the spinoff of Arm from the now defunct British computing company Acorn shows. On the contrary, the U.K. has a thriving startup scene — at least, by European standards. By the end of 2019, the U.K. had 77 startups valued at more than $1 billion, more than twice as many as Germany, the next biggest, according to Dealroom, a data provider.Nor can it be said that U.K. startups are starved of capital. The $13 billion in venture funding secured by British firms last year was more than that won by French and German startups combined. The U.K. government also provides tax credits and investments to spur innovation and startups.But you can see the concern. The country that invented graphene has struggled to commercialize its innovations and hold on to companies once they reach a certain size. Arm, acquired by Japanese group Softbank Group Corp. and now by U.S. chipmaker Nvidia Corp., isn’t alone. Artificial intelligence firm DeepMind was bought by Google.Those losses, as well as the U.K.’s dependence on Chinese mobile company Huawei Technologies Co.’s 5G technology, seem to be what has prompted the focus on building better state support for the country’s tech sector.One long-standing problem is that Britain underfunds research compared to its major trading partners. The 37.1 billion pounds ($47.5 billion) that the U.K. cumulatively spent on R&D in 2018 represented just 1.7% of the country’s gross domestic product — less than both the 3.1% spent by Germany and the OECD average of 2.4%. Google parent Alphabet Inc. alone spent $27 billion on R&D in the 12 months through June.But the EU state aid regime isn’t to blame. The vast majority of state aid is allowed automatically. Rather, the U.K. has generally chosen to provide less aid than other members. In 2019 Britain, for example, spent far less on subsidies to companies (0.34% of GDP in 2019) than Germany (at least 1.45% of GDP) and France (0.79%) did.In 2018, the European Commission approved a plan to give 1.8 billion euros ($2.1 billion) of public funding to the semiconductor industry, whose research and development costs are the highest in tech. France committed to contributing as much as 355 million euros to help its chip companies, Italy chucked in 524 million euros and Germany gave 820 million euros. All have chipmaking giants, from Franco-Italian STMicroelectronics NV to Infineon AG and Robert Bosch GmbH in Germany.The U.K. sought permission for just 48 million euros, yet still hasn’t paid any of it. That’s partly because the U.K. has tended to invest upstream, particularly in academic research, leaving far fewer funds available to help innovative companies translate their ideas into products. A revised state aid policy could provide R&D cash credits to foster technology clusters and help them move toward commercialization.There is no question that, done well, governments can make a huge difference in the development of a vibrant technology sector; Singapore, Taiwan and Israel are good examples of this. And yet the idea of an expansive, new policy strategy for the tech sector makes many Conservatives nervous, not least because picking winners is risky.“France, Japan and China have done a better than job than we have over the years,” said Julian Birkinshaw, a professor of strategy and entrepreneurship at London Business School. “But they've also had more failures than they've had successes.” Even so, investing in later-stage ventures is often a safer bet than the scattergun academic approach. Government funding can be an accelerator, but it has to come at the right juncture.Alok Sharma, Johnson’s secretary of state for business, energy and industrial strategy, insists the government’s intentions aren’t to return to the failed industrial policies of the 1970s. But the government hasn’t yet published its new state aid program.Cummings says he wants to fund only the best projects and sectors. But politics may muddy the picture. Johnson’s big governing vision is to rebalance the U.K. economy to provide jobs and opportunity in the north of the country, where many of his new voters live. It’s hard to imagine that state aid decisions won’t in part be governed by keeping these voters happy.Many of the government’s tech investments have already raised eyebrows. For example, earlier this year it took a 45% stake in bankrupt satellite company OneWeb, arguing the purchase would help fill the gap left by the U.K. losing access to the EU’s Galileo navigation satellite system and also help domestic broadband. But the investment was rushed through with little scrutiny and over the reservations of internal experts.In some ways the government’s failed foray into developing its own Covid contact-tracing app, instead of using the joint Google-Apple approach adopted elsewhere in Europe, reflects the hubris that could get it into trouble as it sets out to nurture a British Google. It’s a mindset that has been aptly called the “Minitel illusion.”Minitel, recall, was the 1980s French terminal that was backed by the state as an alternative to the U.S.-developed Internet but finally retired in 2012. It was a brilliant invention for its time, but the high-cost terminals could not compete with the multitasking personal computer and it had little usefulness outside France. The French government, with financial backing from the EU and technical support from Germany, also tried to create a literal competitor to Google, dubbed Quaero, from the Latin for “I seek,” in 2008. It ended in 2013. Picking winners is problematic, but so is focusing R&D funding so heavily on the university sector. Helping later stage corporate research may split the difference effectively for Britain. But apart from the danger of repeating the errors of the past, the U.K. could pay a high price, in terms of market access, for Johnson’s determination that Britain should have an independent state aid policy.As for Arm, its re-sale stands as both a sign of the ingenuity of Britain’s tech sector, but also limitations that have nothing to do with Britain’s EU membership. Arm co-founder and venture capitalist Hermann Hauser has argued that the sale to Nvidia will result in job losses in the U.K. and compromises Britain’s “technology sovereignty.” It’s an interesting concept and one with innate appeal to the economic nationalism of Johnson’s Conservatives. But ultimately technological sovereignty, if it exists at all, cannot be decreed. It must be built. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael is a columnist for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
With the acquisition of Cypress Semiconductor Corporation, Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) enhances its expertise in memory solutions. Infineon today announced the addition of Semper Secure to its award-winning Semper NOR Flash memory platform. Based on Semper NOR Flash’s field-proven and robust smart memory architecture, Semper Secure NOR Flash is the first memory solution to combine security and functional safety in a single NOR flash device to deliver the security, safety, and reliability required for the most advanced connected automotive, industrial, and communications systems.
(Bloomberg Opinion) -- For years, technologists have been talking about smarter cars packed with sensors, chips and supercomputers that can replace human drivers.That was enough to get investors excited about the future of automotive semiconductors. An earnings report from NXP Semiconductors NV late Monday reminds us of one slight flaw in the plan: People need to actually buy cars.The Dutch company said revenue will drop approximately 20% this quarter to around $1.8 billion. The figure is in line with estimates that analysts slashed by 23% over the past eight weeks. NXP cut its first-quarter revenue estimate at the start of March, only to fall short of that mark. The company forecast a second-quarter operating loss of as much as $237 million, versus an estimated deficit of $169 million.So far this year, much of the attention in semiconductors has been on whether smartphones are a necessity — Xiaomi Corp. thinks so, I disagree — and whether work-from-home and streaming demand will drive server sales enough to make up for the drop in consumer spending. The outlook from Taiwan Semiconductor Manufacturing Co. suggests otherwise.NXP, however, is playing in a different arena: It got 47% of its revenue from automotive clients last year. The company said Monday that it was “navigating a challenging and very fluid environment.” That’s an understatement. After a 4.5% decline in global automobile shipments in 2018 and a 3.9% drop last year, hopes that the industry might avoid a third year of contraction are out the window as the Covid-19 pandemic hits demand and supply.NXP isn’t alone. Germany’s Infineon Technologies AG gets 43% of its revenue from the auto sector. This month, the company completed its $9.3 billion(1) acquisition of California’s Cypress Semiconductor Corp. You’ll never guess which sector accounts for 39% of that company’s business. Forgive Infineon shareholders if they start to feel that the 47% premium they paid for Cypress might be a little steep. Ironically, shareholders seem to be forgiving management, with the stock rebounding from a mid-March low to be 30% off its February peak, and back to where it was in early October.Bloomberg Intelligence senior analyst Anand Srinivasan has been ahead of the curve. He predicted two weeks ago that the then-consensus estimate for a 4% decline in NXP revenue this year was conservative, and that 6% might be more realistic. Today, data on the Bloomberg terminal points to a 10% drop, the worst since the financial crisis in 2009.At Infineon, analysts are looking at a 7% drop in sales for the year ending Sept. 30. That may also be conservative.Xiaomi may believe that smartphones are a must-have, and Apple Inc. certainly hopes that its new iPhone SE will find favor even among tight-fisted consumers. But with a global recession on the way, you’d have to be Elon Musk to believe that the auto sector, and the chipmakers that supply them, are going to survive with only minor bruising.(1) Equity plus debt in an all-cash dealThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.