巴克莱-美股-半导体行业-美国半导体行业2017年三季度预览 66页

'EquityResearch18October2017U.S.SemiconductorsINDUSTRYUPDATE3Q17Preview:AAPLSupplyChainU.S.SemiconductorsInterestingAfterUnderperformanceNEUTRALUnchangedTheSemiconductorgrouplikelycontinuestowork(best-performingS&PsectorYTD),andweexpecta7thconsecutivepositiveearningsperiod(seeFigure1)asmostendForafulllistofourratings,pricetargetandmarkets(exceptOpticalandwireless)remainhealthyleadingtobetterresults/earningschangesinthisreport,pleaseseeguidance.TheIndustrial/Analogtradelikelyisn’toveryetbutwebelievethereismoretableonpage2.interestingupsideinAAPLleverednames(AVGOandSWKS)aftertradingsidewaysforU.S.SemiconductorsthepastthreemonthsonIP8/IPXconcernsvs.groupup10%+.BlayneCurtisTheWaitingontheAAPLCycleistheHardestPart:Investorshavestayedawayfrom+16173424101AAPLleverednamesandtheyhaveunderperformedtheSOXandinparticularblayne.curtis@barclays.comAnalog/Industrialnamesoverthepastthreemonths(especiallyinthelastmonth;seeBCI,USFigure8).Weattributethistouncertaintyaroundsellthrough,timing,andmixwhileThomasO"Malleyunderlyingmacroeconomicdatahasbeenstrong.Webelievetheworryisoverblownas+121252606921)suppliershavealwaysbeenmoreconservativethanAAPLanalystssotheeffectisthomas.o"malley@barclays.comsmaller,2)therealstoryisaboutIPX…assumingthephonesells(limitedAndroidBCI,UScompetitionwithno3Dsensinguntil2H18attheearliest),and3)anyinitialsupplyJerryZhangconstraintsspillintoQ1withabettercyclefornextyear(twonewOLEDmodels).+12125263069WeWon’tBackDownonRF:jerry.zhang@barclays.comBroadcom(AVGO,TopPick-OW/Neu;PT$300):AVGOisleveredtotheBCI,USCDMAversionsandtheIPXandshouldsee~40%blendedcontentgainswithGarrettHindsabiastowards1Q18.Thecompanyhasbest-in-classgrowthandprofitability+12125266374atacompellingvaluation.Webelievethereislikelya50%dividendincreaseingarrett.hinds@barclays.comDecember,whichwouldgiveAVGOasuperioryieldata25-50%valuationBCI,USdiscounttootherAnalognameswithlessriskshouldIndustrialcorrect.Skyworks(SWKS,OW/Neu;PT$120):WilllikelyguideDecemberconservativelyasmanagementwillwanttoseeasmuchdataaspossibleonIPXrampbutthecompanybenefitsfromCDMAsku(each5%changeinIPXmixleadstoa2-3%changeinblendedcontent)andshouldeventuallyhaveupsidetonumbers.AAPLrisksarepricedingivenunderperformancewithnewflowtofocusonIPXlaunchandbettercyclenextyear.RFmodel(growth/margins)hasprovensustainablewhichshouldaidcashreturns.NameDueforFreeFallin’:AMD(AMD,UW/Neu;PT$10):Whilewestillseeabeat/raisedrivenbythetemporaryCryptotailwind(seeCryptoTailwindLikelyExtendsintoNextYear,Oct4,2017),wewouldrevisittheUWonanystrengththroughearnings.WehaveseenlittlesharegainstodateinCPUandGPU(3rdpartydatashowsdecliningshare)yetthestockpricecontinuestobakeinmaterialsharegains,leavingonlyserverstoclosethegap.EvaluationsforitsEpycserverchipathyperscalecustomersasstillunderwaybutwestillthinkmassadoptionisunlikelyduetofirstgensiliconandlatencyissuesbetweencoresandmemory.BarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE60. Barclays|U.S.SemiconductorsSummaryofourRatings,PriceTargetsandEarningsChangesinthisReport(allchangesareshowninbold)CompanyRatingPricePriceTargetEPSFY1(E)EPSFY2(E)OldNew17-Oct-17OldNew%ChgOldNew%ChgOldNew%ChgU.S.SemiconductorsNeuNeuAnalogDevices(ADI)EWEW88.9490.0090.00-4.594.6314.754.954BroadcomLimited(AVGO)OWOW242.62290.00300.00315.9315.93-17.5817.58-CirrusLogicInc.(CRUS)UWUW54.8355.0055.00-4.714.7923.843.80-1CypressSemiconductorCorp.(CY)OWOW15.8618.0018.00-0.810.8211.281.24-3IntegratedDeviceTechnology,Inc.(IDTI)UWUW28.0122.0024.0091.351.35-1.481.48-M/A-COMTechnologySolutionsHoldings,Inc.(MTSI)OWOW37.7063.0050.00-212.342.3502.722.30-15MaximIntegratedProducts(MXIM)EWEW49.8646.0050.0092.222.3452.472.605QorvoInc.(QRVO)EWEW72.2770.0070.00-5.485.39-26.366.421SiliconLaboratories,Inc.(SLAB)EWEW88.1572.0086.00193.073.07-3.483.48-SkyworksSolutions,Inc.(SWKS)OWOW107.35110.00120.0096.396.39-7.037.243TexasInstruments,Inc.(TXN)EWEW94.2785.0095.00124.114.1824.214.405Source:BarclaysResearch.SharepricesandtargetpricesareshownintheprimarylistingcurrencyandEPSestimatesareshowninthereportingcurrency.FY1(E):CurrentfiscalyearestimatesbyBarclaysResearch.FY2(E):NextfiscalyearestimatesbyBarclaysResearch.StockRating:OW:Overweight;EW:EqualWeight;UW:Underweight;RS:RatingSuspendedIndustryView:Pos:Positive;Neu:Neutral;Neg:Negative18October20172 Barclays|U.S.SemiconductorsCONTENTSAAPLSupplyChainUnfairlyDiscounted,ContentGainersShouldbetheAmongtheStrongestPerformersinto2018.................................................................................................................4MemoryLeveredNamesandNVDABestYTDPerformers................................................................6SemisRemainBestPerformerYTDinS&P..............................................................................................7Taxreformhelpsbroadly,butisawashforsome................................................................................8PMIDataatRecordLevels...........................................................................................................................9RFMarket:HigherIPXCDMAMixShouldBoostSWKS/AVGO.....................................................10PCMarketHangingIn,PurleyRollOutContinues,MemoryMarketHasLegsintoNextYear13BarclaysEstimatesHeadingintoEarnings............................................................................................16EarningsSchedule.......................................................................................................................................18AMDReports3Q17–Tuesday,October24.........................................................................................19CaviumReports3Q17–Wednesday,November1............................................................................21CirrusLogicReportsC3Q17–Thursday,November2.....................................................................23CypressReports3Q17–Thursday,October26..................................................................................25IDTIReportsC3Q17–Monday,October30........................................................................................27IntelReports3Q16–Thursday,October26........................................................................................29MACOMReportsC3Q17–Tuesday,November14...........................................................................31MaximReportsC3Q17–Thursday,October19.................................................................................33QorvoReportsC3Q17–Thursday,Nov9(Projected)......................................................................35QuantennaReports3Q17–Wednesday,November15(Projected)............................................37SiliconLabsReports3Q17–Wednesday,October25......................................................................39SkyworksReportsC3Q17–Monday,November6............................................................................41TexasInstrumentsReports3Q17–Tuesday,October24...............................................................43XilinxReportsC3Q17–Wednesday,October25...............................................................................4518October20173 Barclays|U.S.SemiconductorsAAPLSupplyChainInterestingAfterUnderperformanceTheSemiconductorgrouplikelycontinuestowork(bestperformingS&PsectorYTD),andweexpecta7thconsecutivepositiveearningsperiod(seeFigure1)asmostendmarkets(exceptOpticalandwireless)remainhealthyleadingtobetterresults/guidance.TheIndustrial/Analogtradelikelyisn’toveryet,butwebelievethereismoreupsideinAAPLleverednames(AVGOandSWKS)aftertradingsidewaysforthepastthreemonthsonIP8/IPXfearsvs.groupup10%+.TheWaitingontheAAPLCycleistheHardestPart:InvestorshavestayedawayfromRFnamesandtheyhaveunderperformedtheSOXandinparticularAnalog/Industrialnamesoverthepastthreemonths(especiallyinthelastmonthseeFigure8).Weattributethistouncertaintyaroundsellthrough,timing,andmixwhileunderlyingmacroeconomicdatahasbeenstrong.Webelievetheworryisoverblownas1)suppliershavealwaysbeenmoreconservativethanAAPLanalystssotheeffectissmaller,2)therealstoryisaboutIPXandassumingthephonesells(limitedAndroidcompetitionwith3Dsensinguntil2H18attheearliest),and3)anyinitialsupplyconstraintsspillintoQ1withabettercyclefornextyear(2newOLEDmodels).WeWon’tBackDownonRF:Broadcom(AVGO,TopPick-OW/Neu;PT$300):AVGOisleveredtotheCDMAversionsandtheIPXandshouldsee~40%blendedcontentgainswithabiastowards1Q18.Thecompanyhasbest-in-classgrowthandprofitabilityatacompellingvaluation.Webelievethereislikelya50%dividendincreaseinDecember,whichwouldgiveAVGOasuperioryieldata25-50%valuationdiscounttootherAnalognameswithlessriskshouldIndustrialcorrect.Skyworks(SWKS,OW/Neu;PT$120):WilllikelyguideDecemberconservativelyasmanagementwillwanttoseeasmuchdataaspossibleonIPXrampbutthecompanybenefitsfromCDMAsku(each5%changeinIPXmixleadstoa2-3%changeinblendedcontent)andshouldeventuallyhaveupsidetonumbers.AAPLrisksarepricedingivenunderperformancewithnewflowtofocusonIPXlaunchandbettercyclenextyear.RFmodel(growth/margins)hasprovensustainablewhichshouldaidcashreturns.NameDueforFreeFallin’:AMD(AMD,UW/Neu;PT$10):Whilewestillseeabeat/raisedrivenbythetemporaryCryptotailwind(seeCryptoTailwindLikelyExtendsintoNextYear,Oct42017),wewouldrevisittheUWonanystrengththroughearnings.WehaveseenlittlesharegainstodateinCPUandGPU(3rdpartydatashowsdecliningshare)yetthestockpricecontinuestobakeinmaterialsharegains,leavingonlyserverstoclosethegap.EvaluationsforitsEpycserverchipathyperscalecustomersasstillunderwaybutwestillthinkmassadoptionisunlikelyduetofirstgensiliconandlatencyissuesbetweencoresandmemory.18October20174 Barclays|U.S.SemiconductorsFIGURE1MedianChangeinConsensusEstimatesandStockPriceGuidedQReportedQForwardCYPriceChange1DayPost5DaysPostQuarterRevenue%EPS%Revenue%EPS%Revenue%EPS%StarttoEnd30DayPriortoEarningsEarningsChangeChangeChangeChangeChangeChangeofEarningsEarningsStartReleaseRelease2QCY2017+0.9%+3.1%+1.5%+6.5%+1.0%+0.8%-1.2%-2.1%+0.5%+1.5%1QCY2017+1.7%+4.6%+1.7%+5.7%+0.7%+1.6%-0.8%-2.2%+9.0%-3.2%4QCY2016+1.9%+5.1%+1.3%+6.3%+1.0%+1.6%+1.1%+1.1%+6.0%+0.3%3QCY2016+1.1%+2.2%+2.4%+9.9%+0.6%+0.8%+0.8%+1.9%+2.1%+0.2%2QCY2016+0.8%+1.0%+0.7%+5.5%+0.3%+0.6%+0.7%+0.2%+10.0%+5.6%1QCY2016+0.2%+1.7%+0.7%+4.3%+0.2%+0.8%+2.0%+2.0%+3.9%-1.7%4QCY2015-2.4%-5.1%+0.8%+3.1%-2.1%-2.3%+0.6%+0.5%+2.3%-11.5%3QCY2015-2.3%+0.1%+1.2%+9.1%-0.8%+0.2%+2.4%+2.6%+9.7%+0.7%2QCY2015-3.9%-0.9%+0.1%+4.7%-2.9%-0.3%+2.5%-1.2%-7.8%-6.9%1QCY2015-2.3%-2.2%+0.2%+5.5%-2.2%-4.0%+0.0%+1.1%+5.6%+0.1%4QCY2014+0.8%+3.6%+0.6%+8.1%+0.6%+0.7%+0.3%-0.1%+7.8%+2.8%3QCY2014+0.2%+3.0%+0.6%+3.7%+0.2%+0.3%+2.6%+4.5%+26.2%-16.1%2QCY2014+0.5%+1.4%+1.1%+4.3%+1.1%+2.1%+0.1%-0.9%-1.1%+0.5%Source:BarclaysResearch,ThomsonReuters18October20175 Barclays|U.S.SemiconductorsMemoryLeveredNamesandNVDABestYTDPerformersYTDtopperformersareSGHandMUbothleveredtoastrongfundamentaltailwindinthememorymarketasASPscontinuetorisealongwithsupplyconstraintsheadinginto2018.NVDAishavinganothergreatyearasthecryptocurrencyminingtailwindhelpedthecompanynavigateaslowdowningraphicswithdatacenterlikelytoreacceleratein2H17withVolta.RFnamesSWKSandAVGOstartedtheyearoffstrongbuthavesinceunderperformedgivenAAPLfearswhiletheanalognamescontinuetogrindhigherasPMI,contentincreasesandinventoryreplenishmenthavecreatedastrongtailwind.FIGURE2SemiUniverseStockPerformanceYTD215%206%165%115%82%84%65%39%40%43%35%35%37%28%28%32%23%25%18%19%21%9%9%15%-4%-10%-7%-35%-19%Source:FooterThomsonReutersandBarclaysResearchotter18October20176 Barclays|U.S.SemiconductorsSemisRemainBestPerformerYTDinS&PTheSOXisup+35%YTD,outperformingmostothersectors(Figure3/Figure4),onthebackofstrongfundamentaldatainmostendmarkets.Themovehaslargelycomefromestimateexpansion,asmultipleshaveonlygrownbyaboutaturnsincelastquarter.Bullswillarguethatcontenttailwinds(suchasAIorautomation)compoundedbybetterGDP(strongerunitgrowth)havecombinedtoformasustainabletrendinto2018butwetendtoalwayshearthisargumentaroundthistimeofthecycle.WedobelievethatlargerIndustrialcompaniesentered2016withfearsofabroaderrecessionandtookdowninventoriesdrastically,onlytohavemarketsimproveinto2H16.Through2017,we’veseenanimprovingfundamentalenvironmentbutalsolikelyabuildofinventories(keepinminddistiinventorieshaslostrelevancywithinventorymoreatthecustomerlevelifitexists).Thequestionremainswhetherthisreversesatsomepointorataminimumslowsaftersuchastrongyearorifthisenvironmentcontinuesinto2018.Fromourperspective,withanothergoodearningscomingthesectorstilllookscomparativelycheapandcouldseefurthergainsintonextyear.FIGURE3SemisAlongwithAllofTechAheadofOtherS&PSectorsYTD40%35%35%30%30%25%20%20%14%14%15%11%12%12%10%6%5%0%-5%-10%(9%)-15%Source:FooterThomsonReutersandBarclaysResearchFooterFIGURE4SemisStillTradingatDiscountvs.OverallMarketRus3000,FwdP/E70.059.560.050.037.540.030.023.422.219.118.419.720.919.915.216.616.817.420.010.0Source:ThomsonReuters,iShares,BarclaysResearch18October20177 Barclays|U.S.SemiconductorsTaxReformHelpsBroadly,butIsaWashforSomeTaxreformhopesdroveupbusinessconfidence,butthepotentiallossorreductionoftheinterestdeductioncouldmakethenewpolicyawashforUSdomiciledIDTI,MU,CAVM,CYandAMDon2018numbers.StillTXNstandstobenefitthemostinourcoverage;wherewesee~16%potentialaccretiononthelowercorporaterate.CRUScansee14%accretionwithhalfthebenefitfromalowerrate,halffrombuybacks.XLNXcansee11%accretionwith~25%ofthebenefitfromalowerrate,~75%frombuybacks.INTCcansee~7%accretionnettingthelowertaxrateagainstthelostinterestdeduction.NoteInteldoesnotbreakoutitsinterestexpense;wecalculateitat~$1.1bnannually(~3%blendedrate)basedontheirdebtoutstanding.Ouranalysisassumesreductionofthestatutoryratefrom35%to20%,75%ofnetcashrepatriatedat10%taxratetobuybackstockatcurrentprices,andeliminationoftheinterestdeduction.FIGURE5TaxReformImpactAdjustedTaxAccretion@AccretionfromAccretion:PriceChange2018ETaxNetCashAccretion:Intrst.Lostint.CompanyNameTickerRatew/USCorpAdjustedTaxBuybackusing75%Tax+BuybackSinceRate($M)Tax+BuybackExp.deduction@20%RateofNetCash-InterestDedctnElectionTexasInstrumentsTXN30.0%19.0%+15.7%($349)+0.0%+15.7%--+15.7%+35.6%CirrusLogicCRUS20.8%15.5%+6.7%$310+6.1%+13.9%--+13.9%-2.3%XilinxXLNX13.5%11.3%+2.6%$2,017+7.6%+11.3%--+11.3%+42.0%MaximMXIM15.0%12.2%+3.2%$1,257+6.4%+10.6%(21)(3)+10.3%+24.0%SkyworksSWKS15.0%12.2%+3.2%$1,444+5.1%+9.2%--+9.2%+38.1%NVIDIANVDA20.0%15.1%+6.1%$3,806+2.1%+8.7%--+8.7%+173.0%SiliconLabsSLAB11.0%9.5%+1.7%$326+6.2%+8.7%(2)(0)+8.6%+45.2%QuantennaQTNA5.0%4.7%+0.3%$53+5.9%+6.9%--+6.9%+18.8%IntelINTC22.0%16.1%+7.6%($6,056)+0.0%+7.6%(1,120)(180)+6.6%+14.4%AnalogDevicesADI15.0%12.2%+3.2%($7,291)+0.0%+3.2%(256)(31)+1.7%+38.4%QorvoQRVO9.7%8.5%+1.3%($477)+0.0%+1.3%(54)(5)+0.8%+43.4%MACOMMTSI10.0%8.8%+1.4%($421)+0.0%+1.4%(18)(2)+0.7%+8.7%IntegratedDeviceTechIDTI5.0%4.7%+0.3%($123)+0.0%+0.3%(5)(0)+0.2%+22.0%MicronMU5.0%4.7%+0.3%($5,706)+0.0%+0.3%(499)(23)+0.1%+132.5%CaviumCAVM7.0%6.4%+0.6%($471)+0.0%+0.6%(27)(2)+0.0%+26.7%MarvellMRVL5.0%5.0%+0.0%$1,572+0.0%+0.0%--+0.0%+42.3%CypressCY2.5%2.4%+0.1%($1,060)+0.0%+0.1%(61)(1)-0.2%+56.6%BroadcomLimitedAVGO4.5%4.5%+0.0%($8,123)+0.0%+0.0%(447)(20)-0.2%+40.1%AdvancedMicroDevicesAMD4.6%4.3%+0.3%($793)+0.0%+0.3%(100)(4)-0.7%+104.3%Source:Companyreports,ThomsonReuters,BarclaysResearch.Note:AdjustedtaxratecalculatedassumingtheUSmarginalratemovesfrom35%to20%,andproratingthebenefitbasedoneachcompany"sexistingtaxrateasapercentageofthefull35%rate(e.g.acompanypayingonly30%ofthefullmarginalrateonlygets30%ofthebenefitofthemovefrom35%to20%).Repatriationaccretionassumescompaniesuse75%ofnetcashrepatriatedata10%taxratetobuybackstockatcurrentprices.Lastly,weassumeinterestdeductibilityiseliminated.18October20178 Barclays|U.S.SemiconductorsPMIDataatRecordLevelsPMIDataatRecordLevelsWorldwidePMIdatahasreachedrecordlevelsacrosstheU.S,EuropeandChinawithallreachingrecordlevelsinourtracking.ChinaPMIedgedupagain(52.4from51.7),the14thconsecutivequarterofexpansionasthemanufacturingsectorcontinuesaprolongedperiodofgrowth.U.SPMIreachedrecordlevelsaswell(60.8from58.8)withexpandingbusinessconditions,neworders,orderbacklogsandinventoriesgrowingataslowerrate.Ofthe18manufacturingindustriesthatthesurveytracks17reportedgrowthinSeptember.Europealsosetanewrecordinourtracking(58.1from57.4)withstrongermanufacturingoutputalongwithsomecapacityconstraintsthatdroverecordjobcreationwiththeupturnbeingcharacterizedasbroad-based(particularstrengthfromGermanyandtheNetherlands).Netnet,thingscontinuetoimproveastheyearprogresses,andweseenosignofslowingdespitesomeofthestrongestfundamentalswe’veeverseeninthisendmarket.LookforabeatandraisefrommostIndustrialnameswithpositivecommentaryinto2018.FIGURE6AnalogRevenuesCloselyTrackPMIFiguresAnalogRevenuevs.PMIIndicesAnalogForwardEstimate$8.5B6055$7.5BAnalogRevenue50$6.5B45PMIReading40$5.5B3530$4.5BJan-12May-12Sep-12Jan-13May-13Sep-13Jan-14May-14Sep-14Jan-15May-15Sep-15Jan-16May-16Sep-16Jan-17May-17Sep-17Jan-18ISM-PMIChina-PMIPMI-EurozoneConsensusAnalogRevAnalogRevenueincludesADI(PFLLTC,ex-AAPL),CY,MSCC,MXIM,ONandTXNSource:ThomsonReuters,BarclaysResearchEstimatesElevatedinDecemberbutExpectBeatandRaiseGivenFundamentalStrengthCurrentconsensusestimatesfortheAnaloggrouparebelowthe10-yearseasonalaverageforSeptemberbuttrackingnearly2%aboveforDecemberasmosthaveraisednumbersgiventorridgrowthwithintheIndustrial/Analogspace.Evenwiththehigherbar,it’slikelyweseemostlybeatandraisesamidsomeofthestrongestfundamentalswe’veseenforthegroup.18October20179 Barclays|U.S.SemiconductorsFIGURE7AnalogSeasonalityAverageSeasonalTrendsCurrentConsensusDifference(Streetvs.10-YrSeasonal)201720182017201820172018SepDecMarJunSepDecMarJunSepDecMarJunAnalogADI.O4.3%-7.4%3.8%4.2%4.8%-3.5%-2.0%2.5%0.5%3.9%-5.9%-1.7%CY.O4.6%-3.3%-5.5%6.0%1.5%-1.5%-2.8%5.9%-3.1%1.7%2.7%-0.1%MXIM.O1.1%-3.3%-1.2%5.9%-4.2%0.9%1.4%3.8%-5.3%4.2%2.6%-2.1%MSCC.O4.2%-0.9%-0.3%4.4%3.7%-3.1%0.9%3.3%-0.5%-2.1%1.2%-1.1%ON.O4.0%-4.9%2.1%5.4%2.2%-2.9%-1.4%4.0%-1.9%2.0%-3.5%-1.3%TXN.O6.2%-7.2%-4.7%7.4%5.9%-6.5%-2.7%6.6%-0.3%0.7%2.0%-0.8%Mean3.8%-4.5%-0.6%5.5%2.3%-2.8%-0.9%4.7%-1.8%2.1%-0.3%-1.7%Median4.2%-4.5%-0.3%5.4%2.9%-3.0%-1.4%4.0%1.3%-1.5%1.1%1.3%Source:ThomsonReuters,BarclaysResearch*ADIProFormaLLTCacquisitionRFMarket:HigherIPXCDMAMixShouldBoostSWKS/AVGOAfterstartingtheyearverystronglyashypebuiltaroundaniPhoneunitsupercycle,RFnameshaveunderperformedtheSOXandinparticularAnalog/Industrialnamesinthepastsixmonths,andespeciallyinthelastmonth(seeFigure8).Weattributethistouncertaintyaroundsellthrough,timing,andmixwhileunderlyingmacroeconomicdatahasbeenstrong.AfteranalyzingtheteardownsofbothmodelsoftheIP8andsupportedcarriers(seeIP8Teardown:CDMAModelRevealsUpdatedRF,CYConfirmed,22Sept2017;IP8TeardownFollowUp:INTCModelFeaturesRFClosertoIP7,22Sept2017),aswellascomparingourexpectedbuildplanstothoseoftheStreetbothontheAAPLandsupplierside,webelieveAVGO(TopPick)andSWKSaresettooutperformandraiseourPTsforbothto$300and$120,respectively.ThesetwocompanieshavehighercontentintheCDMAmodel,whichwebelieveisunderappreciatedbythemarketgiventhenowstatusquomixvs.Intelsharegains.FIGURE8RFNamesHaveRecentlyUnderperformedtheSOXandAnalog/IndustrialAVGOCRUSQRVOSWKS.SOXADIMXIMTXNXLNX-1Mo-1%-3%-2%0%6%4%5%9%4%-3Mo-3%-16%6%-1%11%10%3%14%10%-6Mo16%-15%4%8%23%15%11%18%29%Source:ThomsonReuters,BarclaysResearchIPXCDMAMixStatusQuo,BlendingAVGO/SWKSContentHigher:InvestorshavegenerallyexpectedtheINTCversionoftheIPXtomakeupalargerpart(60-70%)ofthemix,whileIP8mixstaysstatusquo.WeareupdatingourviewandnowbelievethesplitacrossboththeIP8andIPXwillbe50/50betweenINTC/CDMA,blendingourcontentassumptionsforSWKSandAVGOhigherastheyhavehighercontentintheCDMAmodelvsastaticIntelRF.FromtheAppleLTEsite,wecanclearlyseethattherehavebeennochangestothesupportedcarriersbetweentheINTC/CDMAmodelsfromtheIP7toIP8otherthanAustralia/NewZealand,whichactuallymovedtowardtheCDMAmodel.GiventheRFandmodemswerealreadyupdatedintheCDMAIP8tosupportthatsplitofcarriers,18October201710 Barclays|U.S.SemiconductorsweexpectthatsameupdatedarchitecturetocarryovertothematchingIPXmodelsandlistofcarriersaswell.Inadditiontocontentgainsacrossallmodels,intheCDMAmodelweexpectthecombinedmid/highbandPAMiDforAVGO,updatedadditionalcontentforSWKS(DRxgains,additionalswitch,connectivity).Inallmodels,AVGOalsogainsincrementalwirelesscharging,andWLANcontent,whileAVGOalsogetshighertouchcontentintheIPX.QRVOismoreleveredtowardtheINTCversion,so50/50hurtstheircontentvs.ourexpectations–onlyupmodestlynowvs.highsingledigit.StocksDiscountingPotentialIP8Cutsand/orIPXDelayWhileNextYearLikelyaBetterCycle:Whileweremembertheproductioncutsoftwoyearsago,webelieveIP8cutswillnotcomeuntillateNov/DecandsuppliershavegenerallybeenmoreconservativethanAAPLanalysts.FortheIPX,itwillbeultimatelybeallaboutdemandbutassumingthephonesells,wearenotconcernedbyanyproductionissuesasthevolumeswouldjustspillintonextyear.Eitherway,theRFstocksarealreadydiscountingthenear-termriskandweseenextyearasabettercyclegivenafullcontributionfromtheIPXandtwonewOLEDmodels(onewithlargerscreen)tobelaunchedinthefall.Weestimate5M/25M/25MIPXand22M/25M/17.5MIP8buildsinQ3/Q4/Q1.ThereisalsoalackofcompetitionfromAndroidwithsimilar3Dsensingfeatureslikelynotavailableuntil2H18attheearliest.LGDisplaywillbeadualsourceforthepanelsin2018andsupplierswillhaveabetterhandleon3Dsensingproduction,soweexpectlessofasupplyconstraintnextyear.18October201711 Barclays|U.S.SemiconductorsFIGURE9IP8/XRFContentEstimatesiPhone8/Plus(A1863/A1864/A1906/A1898)-US(CDMA)/China/Japan*--QCOMContentbyCompanyFunctionPartPASwitchFilterBarEst.AVGOSWKSQRVOMurata/Other2G/3G/4GLowBandPAMiD(B8/13/17(12)/18/19/20/26(5)/28/29)$0.32$0.54$2.69$3.55$3.55Mid/HighBandPAMiD(B1/25(2)/3/4/7/34/39/23/30/66/7/38/40/41/42*)$1.46$2.06$9.36$12.89$12.892G/EDGEPAM$0.38$0.38$0.38OtherAntennaControl$2.15$2.15$2.15SwitchModule$0.50$0.50$0.50DiversityReceiveModule1$0.43$0.62$0.67$1.73$1.73DiversityReceiveModule2$0.36$0.43$0.43$1.22$1.22Filterbank$1.50$1.50$1.50WLANco-exist(BAWTriplexer)$0.75$0.75$0.75GPSFEM(LNA+SAW)$0.14$0.20$0.35$0.35WLANModule(PA+Switch/LNA)$1.00$1.00$2.00$1.00$0.50$0.50Otherswitches,Tx/Rxfilters$0.00$0.90$0.00$0.90$0.90Total$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhone8/Plus(A1905/A1897)-US(GSM)/Europe/ROW--INTCContentbyCompanyFunctionPartPASwitchFilterBarEst.AVGOSWKSQRVOMurata/Other2G/3G/4GLowBandPAMiD(B8/13/17(12)/18/19/20/26(5)/28/29)$0.32$0.54$2.69$3.55$3.55MidBandPAMiD(B1/25(2)/3/4/7/34/39/23/30/66)$0.70$1.00$4.32$6.02$6.02HighBandPAMiD(B7/38/40/41)$0.35$0.36$2.52$3.23$3.232G/EDGEPAM$0.38$0.38$0.38OtherAntennaControl$2.00$2.00$2.00EnvelopeTracking$0.60$0.60DiversityReceiveModule1$0.36$0.43$0.43$1.22$1.22DiversityReceiveModule2$0.36$0.43$0.43$1.22$1.22Filterbank$1.38$1.38$1.38WLANco-exist(BAWTriplexer)$0.75$0.75$0.75GPSFEM(LNA+SAW)$0.14$0.20$0.35$0.35WLANModule(PA+Switch/LNA)$1.00$1.00$2.00$1.00$0.50$0.50Otherswitches,Tx/Rxfilters$0.00$0.90$0.00$0.90$0.90Total$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78iPhone8/Plus(A1863/A1864/A1906/A1898)-US(CDMA)/China/Japan*--QCOM25%$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhone8/Plus(A1905/A1897)-US(GSM)/Europe/ROW--INTC25%$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78Blended50%$3.86$7.44$14.17$25.76$11.82$6.45$4.65$2.84%Changevs.IP7/+4%13%8%8%19%5%2%-9%iPhoneX(A1865)-US(CDMA)/China/Japan*--QCOMContentbyCompanyFunctionPartPASwitchFilterBarEst.AVGOSWKSQRVOMurata/Other2G/3G/4GLowBandPAMiD(B8/13/17(12)/18/19/20/26(5)/28/29)$0.32$0.54$2.69$3.55$3.55Mid/HighBandPAMiD(B1/25(2)/3/4/7/34/23/30/7/38/39/40/41/42*/66)$1.46$2.06$9.36$12.89$12.892G/EDGEPAM$0.38$0.38$0.38OtherAntennaControl$2.15$2.15$2.15SwitchModule$0.50$0.50$0.50DiversityReceiveModule1$0.43$0.62$0.67$1.73$1.73DiversityReceiveModule2$0.36$0.43$0.43$1.22$1.22Filterbank$1.50$1.50$1.50GPSFEM(LNA+SAW)$0.14$0.20$0.35$0.35WLANco-exist$0.75$0.75$0.75WLANModule(PA+Switch/LNA)$1.00$1.00$2.00$1.00$0.50$0.50Otherswitches,Tx/Rxfilters$0.00$0.90$0.00$0.90$0.90SP4T$0.90$0.90$0.90Other$0.00$0.00Total$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhoneX(A1901)-US(GSM)/Europe/ROW--INTCContentbyCompanyFunctionPartPASwitchFilterBarEst.AVGOSWKSQRVOMurata/Other2G/3G/4GLowBandPAMiD(B8/13/17(12)/18/19/20/26(5)/28/29)$0.32$0.54$2.69$3.55$3.55MidBandPAMiD(B1/25(2)/3/4/7/34/39/23/30/66)$0.70$1.00$4.32$6.02$6.02HighBandPAMiD(B7/38/40/41)$0.35$0.36$2.52$3.23$3.232G/EDGEPAM$0.38$0.38$0.38OtherAntennaControl$2.00$2.00$2.00EnvelopeTracking$0.60$0.60DiversityReceiveModule1$0.36$0.43$0.43$1.22$1.22DiversityReceiveModule2$0.36$0.43$0.43$1.22$1.22Filterbank$1.38$1.38$1.38GPSFEM(LNA+SAW)$0.14$0.20$0.35$0.35WLANco-exist$0.75$0.75$0.75WLANModule(PA+Switch/LNA)$1.00$1.00$2.00$1.00$0.50$0.50Otherswitches,Tx/Rxfilters$0.00$0.90$0.00$0.90$0.90SP4T$0.90$0.90$0.90Other$0.00$0.00Total$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78iPhoneX(A1865)-US(CDMA)/China/Japan*--QCOM25%$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhoneX(A1901)-US(GSM)/Europe/ROW--INTC25%$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78Blended50%$3.86$7.44$14.17$25.76$11.82$6.45$4.65$2.84%Changevs.IP7/+4%13%8%8%19%5%2%-9%%Changevs.IP7/+(Flatmix)21%8%-3%iPhone8/Plus(A1863/A1864/A1906/A1898)-US(CDMA)/China/Japan*--QCOM25%$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhone8/Plus(A1905/A1897)-US(GSM)/Europe/ROW--INTC25%$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78iPhoneX(A1865)-US(CDMA)/China/Japan*--QCOM25%$4.10$8.21$15.61$27.92$13.64$8.73$2.65$2.90iPhoneX(A1901)-US(GSM)/Europe/ROW--INTC25%$3.61$6.67$12.73$23.61$10.00$4.18$6.65$2.78Blended100%$3.86$7.44$14.17$25.76$11.82$6.45$4.65$2.84%Changevs.IP7/+4%13%8%8%19%5%2%-9%Source:CompanyReports,BarclaysResearch18October201712 Barclays|U.S.SemiconductorsPCMarketHangingIn,PurleyRollOutContinues,MemoryMarketHasLegsintoNextYearThePCmarketcontinuestotrendtowardonlyamodestdeclinevs.Intel’sdownmidsingledigitguide.PCODMShipmentsareontracktobedownonly-2%y/yfortheyear(seePCPulseOctober2017–SeptHangsin,YearStilltrendingforModestDecline,12Oct2017),andthisstrengthisalsoreflectedinPCOEMsaleswhichwerejust-0.5%y/yinQ3andcumulativelyabout-0.6%y/yinthefirst9months(seePCMarketFlash:UnitTrajectoryRecoversAfterSoftJun-Q,11Oct2017).OurunitestimatesforQ4remainroughlyunchanged,butCoffeeLakejustlaunchedtogenerallypositivereviewsparticularlyforgamingandwillrampinlateOct,whichisasourceofpotentialupside.Weexpectareaccelerationintheservermarket(highsingledigity/ytargetforyear)asPurleycontinuestorolloutandbringsanASPtailwindthatwilllastwellintonextyearasitisonlyexpectedtomakeupabout10%ofmixbyyearendbutlikely50%exiting2018.Decserverrevenuewillneedtogrowatadoubledigitratetoreachthefullyeartarget–notalayupbutpossiblevs.aneasiercomparelastyear.EvaluationsarestillunderwayforAMDEpycathyperscale,butwebelievefirstgensiliconandlatencyissuesincertainapplicationswillkeepitfrommassadoption.Further,evaluationsintheEnterprisearelongersonotlikelytoimpact2018.Theglobalmemorymarkethasseencontinuedstrengthashealthysupply/demanddynamicsseemsustainableintonextyear(seeMicronTechnology:MemoryTrendsLookGoodintoNextYear;RaisingPTandEstimates,12Oct2017).DRAMhasbeenaparticularbrightspot,tracking+20%Q/Q,whileNANDhasalsorecentlyreaccelerated+4%M/Mwithseasonalsmartphonerampsandinsatiabledemandforflashinthedatacenter.StreetnumbersseemtobakeinASPdeclinesintonextyearsbasedonpriorcycles,butdon’tseethishappeningin2018withmorediversesourcesofdemand(priorDRAMcycles~80%PC)andonthesupplysideallmajorplayersseemalignedinbitgrowthexpectationstokeepitinlinewithdemand(DRAMbitsup~20%y/yinCY18,NANDbitsup~50%)andarenotaddingwafercapacity.WeremainpositiveonINTCaswebelievethecompanycanreturntogrowthonbetterPCtrends,sustainedDCGgrowth,anddiversification(Memory–64L3Dlaunched,Dalianramping),Mobile,IoT,andAutos–TSLAinfotainmentwin,MBLYclosed).Whilesentimenthasrecentlyimprovedabit,webelievethereismuchmoreroomtogohigherasthestocklooksincreasinglycheapespeciallygiventheproposedpolicychanges(Figure5/Figure10),andputtingtogetherasolidquarterwilldomuchtohelp.FIGURE10INTCVeryAttractivelyValuedvs.LargeCapPeersBARCLAYSCOMPARABLECOMPANYMETRICSPriceMarketEV/EBITDAEV/FCFNetDebt/EVP/E(ex.ESO)P/E(InclESO)DivYieldGMGMOPMOPMRevRev10/16/17Cap($M)2017E2018E2017E2018ECurrent2017E2018E2017E2018ENTM2017E2018E2017E2018E16-17E17-18EINTC$39.76192,6377.8x7.1x18.2x14.6x3.1%13.1x12.5x14.8x12.6x2.8%61%62%27%29%3%3%NVDA$197.93124,49837.9x36.8x56.9x47.3x(3.5%)48.6x42.3x54.9x49.0x0.3%59%60%34%36%30%15%AVGO$246.67112,48213.0x11.3x18.8x15.6x6.7%14.8x13.8x17.0x15.8x2.2%63%63%46%47%16%6%TXN$94.2395,64314.4x13.9x25.3x21.7x0.4%22.0x20.4x22.5x21.4x2.1%64%64%42%43%10%4%MU$41.4949,2494.1x4.1x10.7x7.2x10.6%6.1x5.1x6.5x5.3x0.0%48%50%37%40%75%13%ADI$88.8332,97014.8x14.2x36.8x17.2x18.1%18.2x18.1x36.2x20.3x2.0%70%70%40%41%56%4%SWKS$106.9819,96211.1x10.0x22.1x16.2x(7.8%)15.9x14.2x19.0x16.8x1.1%51%52%38%39%16%9%XLNX$72.6619,31322.5x20.6x20.1x21.8x2.0%29.6x27.0x29.6x27.0x2.0%69%69%29%30%7%5%Median$72,44613.7x12.6x21.1x16.7x2.6%17.0x16.2x20.8x18.5x2.0%62.2%62.5%37.3%39.8%16.2%5.6%Mean$80,84415.7x14.8x26.1x20.2x3.7%21.1x19.2x25.1x21.0x1.6%60.7%61.3%36.6%38.1%26.7%7.4%Source:ThomsonReuters,CompanyReports,BarclaysResearch18October201713 Barclays|U.S.SemiconductorsFIGURE11Q/QUnitShipments-PCvs.MPUvs.NB&MotherboardsQuarterlyunitin"0001Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q17E1Q18E2Q18E3Q18E4Q18E201520162017E2018ETaiwaneseNBandMotherboardshipmentsTop5TaiwaneseNBODM29,50031,10034,80034,70026,72529,37532,80034,35029,35031,35033,42533,45028,65130,05532,18232,564130,100123,250127,575123,451Top4TaiwaneseMotherboard11,87511,50512,82512,59511,75012,25012,70011,17510,2009,50010,10010,6009,4629,4719,8999,39748,80047,87540,40038,229TotalNBandMotherboard41,37542,60547,62547,29538,47541,62545,50045,52539,55040,85043,52544,05038,11339,52642,08041,961178,900171,125167,975161,680Q/Q-18%3%12%-1%-19%8%9%0%-13%3%7%1%-13%4%6%0%HistoricalSeasonality-11%4%6%0%-15%6%7%0%-15%4%7%0%Y/Y-9%-13%-10%-7%-7%-2%-4%-4%3%-2%-4%-3%-4%-3%-3%-5%-10%-4%-2%-4%MPUShipmentsNBMPU*58,73256,90458,46057,90849,63249,40559,28957,24753,74256,80460,68356,72253,84754,13057,05355,066232,004215,572227,952220,096DTMPU**29,94829,92432,43634,09729,55327,92729,81930,56227,36928,46829,06027,95726,55926,72728,12326,564126,405117,861112,854107,974TotalNB+DTMPU88,68086,82890,89692,00579,18577,33289,10887,80981,11185,27289,74384,67980,40680,85885,17681,630358,409333,433340,805328,070Q/Q-8%-2%5%1%-14%-2%15%-1%-8%5%5%-6%-5%1%5%-4%HistoricalSeasonality-5%1%4%-3%-7%-1%6%-3%-8%2%5%-4%Y/Y9%-8%-13%-4%-11%-11%-2%-5%2%10%1%-4%-1%-5%-5%-4%-4%-7%2%-4%PCShipmentsWWNBPC39,49637,35942,08642,49734,82936,57440,68843,31136,99537,02541,49443,35037,49337,34841,30443,079161,438155,402158,865159,224WWDTPC28,13027,00927,69827,84924,27525,04525,77825,65123,34623,40024,12324,46222,45822,36923,12723,462110,686100,74995,33291,416TotalPCShipments67,62664,36869,78570,34659,10561,61966,46668,96260,34160,42565,61767,81359,95059,71764,43166,541272,124256,151254,197250,639Q/Q-16%-5%8%1%-16%4%8%4%-13%0%9%3%-12%0%8%3%HistoricalSeasonality-11%-1%7%1%-12%0%7%1%-12%-1%7%2%Y/Y-8%-14%-12%-13%-13%-4%-5%-2%2%-2%-1%-2%-1%-1%-2%-2%-12%-6%-1%-1%TabletShipmentsWWTablets46,40744,07850,45666,23839,56939,19946,55864,19538,38737,46744,94162,511207,179189,520183,306Q/Q-39%-5%14%31%-40%-1%19%38%-40%-2%20%39%N/AN/AN/AN/AHistoricalSeasonality-34%15%19%60%-35%-1%19%57%-36%-2%19%48%Y/Y-8%-8%-9%-13%-15%-11%-8%-3%-3%-4%-3%-3%N/AN/AN/AN/A-10%-9%-3%N/A20%15%10%5%0%-5%-10%-15%-20%1Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q17E1Q18E2Q18E3Q18E4Q18ETaiwaneseNBandMotherboardshipmentsMPUShipmentsPCShipmentsODMPrior*Includesx86TabletMPUShipments;**Includesx86IoTMPUShipmentsSource:CompanyReportsandBarclaysResearch18October201714 Barclays|U.S.SemiconductorsFIGURE12BarclaysSemiconductorUniverseComparablesBARCLAYSCOMPARABLECOMPANYMETRICSPriceMarketEV/SalesP/E(ex.ESO)P/E(Incl.ESO)EV/EBITDATang.DivGMOPM16-17E17-18ETicker10/16/17Cap($M)2017E2018E2017E2018E2017E2018E2018EBV/ShrYield2017E2017ERevRevMixedSignalAVGO$246.67$112,4826.6x6.2x14.8x13.8x17.0x15.8x11.3x($36.91)2.2%63%46%16%6%CAVM$68.254,9975.6x5.0x24.4x19.2xNMNM14.9x(3.08)0.0%66%24%63%11%CY$15.885,7792.9x2.7x19.3x12.8xNM43.4x11.6x(1.10)2.2%41%16%20%8%IDTI$27.893,8765.1x4.8x20.4x19.2x39.2x32.1x13.8x1.150.0%61%26%5%6%QTNA$16.626393.2x2.4x66.0x23.4xNM65.4x17.7x3.550.0%49%6%47%31%Median5.1x4.8x20.4x19.2x28.1x37.8x13.8x0.0%61.3%24.2%20.0%7.8%AnalogADI$88.83$32,9707.1x6.8x18.2x18.1x36.2x20.3x14.2x($20.91)2.0%70%40%56%4%CRUS$53.823,6152.1x2.1x11.5x13.0x14.6x16.6x9.6x10.880.0%50%25%9%0%MTSI$36.592,4124.0x3.7x16.4x13.6xNM38.9x10.9x(2.33)0.0%59%25%24%8%MXIM$49.5014,2315.5x5.3x20.2x18.7x21.5x19.8x13.4x5.642.8%66%34%5%4%MCHP*$91.8921,0435.1x4.9x17.9x16.6x32.0x22.9x12.7x(4.99)1.6%60%37%22%5%MPWR*$113.834,6679.5x8.2x39.7x31.5xNMNM26.4x10.350.7%56%28%19%17%POWI*$73.202,1234.3x3.9x26.5x22.3x38.0x30.2x17.1x13.720.7%50%19%13%11%SMTC*$39.002,5744.0x3.6x20.9x17.8x47.2x33.5x10.8x2.310.0%49%27%14%10%SLAB$87.553,7804.5x4.2x28.5x25.1x51.3x41.2x18.5x12.200.0%59%20%9%8%TXN$94.2395,6436.5x6.3x22.0x20.4x22.5x21.4x13.9x5.052.1%64%42%10%4%Median4.8x4.5x20.5x18.4x34.1x22.9x13.6x0.7%59.0%27.5%13.2%6.7%Discrete/Low-endAnalogDIOD*$32.82$1,5431.6x1.5x24.7x19.8x34.4x23.5x8.2x$10.240.0%33%11%11%5%MSCC*$51.445,8644.3x4.1x12.9x11.7x37.6x25.4x11.0x(13.63)0.0%64%32%4%5%Median2.9x2.8x18.8x15.8x36.0x24.4x9.6x0.0%48.6%21.2%7.9%5.2%ComputingAMD$14.26$16,2563.1x2.8xNM39.8xNM51.7x28.3x($0.11)0.0%34%5%20%13%INTC$39.76192,6373.2x3.1x13.1x12.5x14.8x12.6x7.1x9.422.8%61%27%3%3%MRVL$18.279,4903.3x3.3x16.3x14.5x17.6x16.6x10.9x4.051.3%61%25%-1%1%NVDA$197.93124,49812.3x10.7x48.6x42.3x54.9x49.0x36.8x8.390.3%59%34%30%15%Median3.3x3.2x16.3x27.1x17.6x32.8x19.6x6.2x0.8%60.2%25.8%11.6%7.7%RFSWKS$106.98$19,9624.9x4.5x15.9x14.2x19.0x16.8x10.0x$15.841.1%51%38%16%9%QRVO$72.539,5263.4x3.0x14.8x11.3x81.5x47.2x8.2x11.210.0%47%25%0%13%Median4.1x3.7x15.4x12.8x50.2x32.0x9.1x0.5%49.1%31.6%7.8%10.9%PLDLSCC*$5.57$6802.3x2.1xNM14.6xNMNMNM(1.89)0.0%56%9%-10%9%XLNX$72.6619,3137.0x6.7x29.6x27.0x29.6x27.0x20.6x8.932.0%69%29%7%5%Median4.7x4.4x29.6x20.8x29.6x27.0x20.6x1.0%62.8%18.9%-1.5%6.7%MemoryMU$41.49$49,2492.4x2.1x6.1x5.1x6.5x5.3x4.1xNA0.0%48%37%75%13%SGH$30.16$6641.1x0.9x11.9x9.5x63.7x11.1x6.9x($1.69)0.0%22%11%46%13%Median1.7x1.5x9.0x7.3x35.1x8.2x5.5x0.0%34.8%23.8%60.6%13.2%Source:CompanyReports,ThomsonReuters,andBarclaysResearch;Companiesoutsideofourcoverageuniverse(markedwith*)useThomsonReutersandnotBarclaysResearchestimatesStockRating:OW=Overweight;EW=EqualWeight;UW=Underweight.Forfulldisclosuresoneachcoveredcompany,includingdetailsofourcompany-specificvaluationmethodologyandrisks,pleaserefertohttp://publicresearch.barcap.com.18October201715 Barclays|U.S.SemiconductorsBarclaysEstimatesHeadingintoEarningsFIGURE13Barclaysvs.ConsensusRevenuesRevenueEstimates3QCY17E($M)4QCY17E($M)CY17E($M)CY18E($M)TickerBarclaysConsensusDifferenceBarclaysConsensusDifferenceBarclaysConsensusDifferenceBarclaysConsensusDifferenceADI$1,522$1,504$18$1,472$1,451$22$5,661$5,622$40$5,880$5,819$61AMD$1,523$1,507$16$1,398$1,338$60$5,127$5,055$72$5,780$5,644$137AVGO$4,808$4,797$11$4,730$4,712$17$18,205$18,177$28$19,385$19,371$13CAVM$251$250$0$260$258$2$982$979$3$1,088$1,094-$6CRUS$415$410$5$512$527-$15$1,576$1,586-$10$1,573$1,700-$127CY$606$602$3$599$593$5$2,330$2,321$9$2,511$2,467$44IDTI$201$201$0$204$212-$8$777$785-$8$826$887-$61INTC$15,706$15,727-$20$16,033$16,110-$77$61,298$61,396-$98$62,876$63,264-$388MTSI$170$170-$1$170$171-$1$720$722-$1$781$830-$49MRVL$610$611-$1$579$591-$11$2,373$2,385-$12$2,406$2,453-$48MXIM$575$577-$2$586$582$4$2,345$2,343$2$2,433$2,403$30MU$6,138$6,138$0$6,481$6,374$107$22,833$22,726$107$25,915$24,586$1,329NVDA$2,408$2,362$46$2,393$2,432-$39$8,968$8,961$7$10,284$9,958$326QRVO$810$813-$3$890$899-$9$2,984$2,995-$11$3,365$3,443-$78QTNA$50$50$0$55$55$0$190$190$1$248$242$6SLAB$196$196$0$199$198$1$764$763$1$825$827-$2SWKS$981$980$1$1,071$1,054$17$3,805$3,787$18$4,151$4,141$10TXN$3,954$3,912$42$3,682$3,661$21$14,732$14,668$64$15,329$15,186$143XLNX$620$621-$1$625$626-$1$2,470$2,472-$2$2,587$2,610-$24Source:ThomsonReutersandBarclaysResearchEstimatesFIGURE14Barclaysvs.ConsensusEPSEPSEstimates3QCY17E($M)4QCY17E($M)CY17E($M)CY18E($M)TickerBarclaysConsensusDifferenceBarclaysConsensusDifferenceBarclaysConsensusDifferenceBarclaysConsensusDifferenceADI$1.40$1.36$0.04$1.19$1.17$0.02$4.89$4.82$0.07$4.91$4.92($0.00)AMD$0.08$0.08$0.00$0.05$0.04$0.02$0.11$0.10$0.01$0.36$0.33$0.03AVGO$4.49$4.48$0.00$4.36$4.33$0.02$16.64$16.61$0.03$17.90$17.73$0.17CAVM$0.74$0.74($0.00)$0.82$0.80$0.02$2.80$2.79$0.01$3.56$3.55$0.00CRUS$1.26$1.20$0.06$1.74$1.78($0.04)$4.66$4.65$0.02$4.13$4.72($0.59)CY$0.24$0.23$0.01$0.25$0.24$0.01$0.82$0.81$0.01$1.24$1.15$0.09IDTI$0.34$0.34($0.00)$0.36$0.40($0.04)$1.37$1.42($0.05)$1.45$1.74($0.28)INTC$0.81$0.80$0.00$0.84$0.83$0.01$3.03$3.01$0.02$3.19$3.12$0.07MTSI$0.48$0.46$0.02$0.45$0.45$0.01$2.23$2.21$0.02$2.69$2.86($0.17)MRVL$0.32$0.32($0.00)$0.27$0.27($0.00)$1.12$1.13($0.01)$1.26$1.26$0.01MXIM$0.56$0.56$0.00$0.56$0.57($0.01)$2.30$2.32($0.02)$2.49$2.42$0.07MU$2.02$2.02$0.00$2.26$2.16$0.09$6.80$6.70$0.09$8.11$7.40$0.72NVDA$0.95$0.94$0.01$0.95$0.97($0.02)$3.60$3.62($0.02)$4.04$3.91$0.13QRVO$1.44$1.43$0.01$1.72$1.74($0.02)$4.88$4.90($0.01)$6.43$6.56($0.13)QTNA$0.08$0.08($0.00)$0.07$0.09($0.01)$0.25$0.26($0.01)$0.71$0.76($0.05)SLAB$0.82$0.81$0.00$0.84$0.82$0.01$3.07$3.06$0.02$3.48$3.46$0.02SWKS$1.76$1.75$0.00$1.95$1.91$0.04$6.73$6.69$0.04$7.51$7.46$0.05TXN$1.15$1.12$0.03$1.04$1.00$0.03$4.18$4.13$0.05$4.40$4.28$0.12XLNX$0.63$0.63$0.00$0.62$0.62$0.00$2.45$2.44$0.01$2.69$2.78($0.09)Source:ThomsonReutersandBarclaysResearchEstimates18October201716 Barclays|U.S.SemiconductorsFIGURE15ResultsandGuidanceExpectationsandPredictedStockActionStockCompanyTickerRating3CQ174CQ17CommentsActionAdvancedMicroDevicesAMDUW↑↑↗BeatandraiseonCrypto;remainUWascryptoeventuallyfadesandsharegainshavenotmaterializedCaviumCAVMOW↗↗↗ModestbeatandraiseasOcetonIIIramps,QLGContracktogrow10%,andnewproductsramp(notablyLiquidSecurity,Fusion-M,LIO2)CirrusLogicCRUSUW↗↘↘SeptslightlyaheadbutseerisktoDecasCRUScontentdowny/yandbuildsarelaterfortheIPX,partiallyoffsetbyhigherGMsCypressCYOW↗↗↗Anotherbeatandraiseonbroadstrength,continuedperformancefromIoTsegment,andinitialrampofUSB-CatAAPLIntegratedDeviceTechIDTIUW↔↓↘Sept.inlinebutlikelymisselevatedDec.StreetnumbersasMemoryInterfacerampnotasfastasmodeledIntelINTCOW↗↗↗ModestbeatandraiseasPCscontinuetotrendbetter,DCGwillbethefocuswhetheritcanaccelerateenoughtohithighsingledigitsMACOMMTSIOW↘↘↗InlinetoslightlybelowasOpticalremainssoft;enthusiasmfordatacenterrampbutneedtogetoutofpenaltyboxafteroverpromisesMaximMXIMEW↔↗↗Sept.inlinewithDec.higherassell-intransitionpartiallyoffsetbyhigheropex(14-weekq/notmodeledcorrectlybySt.)QorvoQRVOEW↔↓↘Septinline,butrisktoDecgivenAAPLtimingandlowerQRVOcontentduetolowerINTCsharegains;ChinaweaknesscontinuesQuantennaQTNAOW↗↗↗Septslightlyaheadas10Grampsto>10%ofrev(Comcast);Decinlinetoslightlyaheadas10GrampcontinuesSiliconLabsSLABEW↑↑↗BeatandraisedrivenbybroadbasedstrengthaswellasIoTSkyworksSWKSOW↗↔↗OneoffavoriteideastoplayAAPLsupplychainascontentlikelyhigher,setuplooksgoodgivenlowexpectationsTexasInstrumentsTXNEW↑↑↗Beatandraise,debateandstockactionwillcenteraroundwhetherthisIndustrialstrengthissustainableXilinxXLNXEW↔↗↗Alsobenefettingfrombroadbasedstrength,butwithelevatedvaluationcommentsondatacenterwillbekeytostockworkingfromhereSource:CompanyReports,BarclaysResearchEstimates,Ratings:OW=Overweight,EW=EqualWeight,UW=Underweight.IndustryView=Neutral18October201717 Barclays|U.S.SemiconductorsEarningsScheduleFIGURE16EarningsSchedule–BarclaysCoverageUniverseEarningsCalendar(ConferenceCall)TickerDateTime(ET)Dial-inPasscodeMXIM10/19/20175:00PMN/AN/ATXN10/24/20175:00PM(719)325-47536556143AMD10/24/20175:00PM(877)407-803713671949SLAB10/25/20178:30AM(866)395-94868462249XLNX10/25/20175:00PM(888)405-466080382363CY10/26/20174:30PM(517)308-9119CypressINTC10/26/20175:00PM(877)303-700592807057IDTI10/30/20174:30PM(844)308-449394503421CAVM11/1/20175:00PM(719)325-47622924324CRUS11/2/20175:00PMN/AN/ASWKS11/6/20175:00PM(800)700-7860431422QRVO11/9/2017(E)TBDTBDTBDMTSI11/14/20175:00PM(877)837-39082098371QTNA11/15/2017(E)TBDTBDTBDSource:ThomsonReuters,StreetAccount,CompanyData18October201718 Barclays|U.S.SemiconductorsAMDReports3Q17–Tuesday,October24KeyPointsExpectabeatandraiseduetoCryptostrengththatcouldextendwellintonextyearduetochangesthatwehighlightedinCryptoTailwindLikelyExtendsintoNextYear,Oct42017.However,GPUbusinessoutsideminingremainschallengedasVegaisburdenedwithhighBOMcostsrelativetoitspositioningandNvidialaunchesVoltaearlynextyear.Ryzentractionlimitedaccordingby3rdpartymarketsharedata;DTchipsalreadywidelyavailablefordiscountsupto$100offMSRP,andNBrampseemsdelayedinto2018.XboxScorpioandotherconsolesrampingboostsSemicustom,butislikelydowny/yasfewernewconsolesthisyearandincreasedcompetitionfromNintendo(noAMD),Serverchipevaluationsareongoingthroughthisfallathyperscale,butwebelievedatacenteradoptionisunlikelygivenit’safirstgensiliconwithlatencyissuesforsomeworkloads.Enterpriseremainsoutofreachin2018duetolongeradoptiontimes,meaning10%serversharein’18reallyis30%ofcloud,whichwethinkisunlikely.WeremaincautiousAMD’sfoundrystrategyasGloFoisbehindon7nmandAMDseemstobeactuallyfavoring7nmTSMCforEpyc2,whichraisesquestionsonduplicativedevelopmentcostsandwhethertheycanhitGloFovolumescommitmentswithoutCPU/GPUsharegains.FIGURE17CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueshouldbeaboveconsensusasCryptoremainsstrongandGPUsupplyshortagescontinue,whichshouldmorethanBarclaysEstsConsensusEstsGuideRevenues$1,523M$1,505M$1.47-1.54Boffsetanypotentialweaknesselsewhere.SeasonallystrongestQ/Q+25%+23%+23%+/-3%quarterforconsolerampsincludingnewXboxScorpio.GMs34.0%34.0%34.0%Opex$400M$400M$400MGMandopexinline.Int.Exp,Tax,&Other$28M$28MGAAPEPS$0.06$0.05ProFormaEPS$0.08$0.07$0.07EPSaboveStreetduetohigherrevenue.ShareCount1140M1140MRevenues:Compute&Graphics$809MEnt,Emb,&Semi-Custom$713MSource:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE18GuidedQuarterDECEMBERQUARTERGUIDEExpectrevenueaheadasCryptodemandremainsstrongerthaninitiallyexpected(companyguidedtotemperedexpectationsBarclaysEstsConsensusEstsRevenues$1398M$1335MintoDecember).ChangestoEthereumcodeextendsthetimelineQ/Q-8%-11%forprofitablemininginto2018.GMs34.8%34.8%Opex$396M$397MConsolebuildscontinueandinitialRyzenNBrevenuebeginstoInt.Exp,Tax,&Other$28Mhit,thoughwillbemuchmorematerialin2018.ImpliedGAAPEPS$0.03ImpliedProFormaEPS$0.05$0.04GMsandopexinline.Est.ShareCount1149MRevenues:EPSshouldbeaboveStreetfromhigherCryptorevenue.Compute&Graphics$825MEnt,Emb,&Semi-Custom$573MSource:CompanyReports,ThomsonReuters,andBarclaysResearch18October201719 Barclays|U.S.SemiconductorsFIGURE19AMD:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revs$1,523M$1,398M$5,127M$5,780MBARCLAYSEPS$0.08$0.05$0.11$0.36Revs$1,505M$1,335M$5,047M$5,644MCONSENSUSEPS$0.07$0.04$0.09$0.33Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE20FIGURE21AMD2017ERevenue&EPSRevisionsAMDGuidanceSurprises5,1000.08AdvancedMicroDevices(AMD)5,0000.07QuarterReportRevenueEPSPrice2017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%4,9000.06Jun-1725-Jul-178.0%10.9%4.6%4,8000.054,700Mar-171-May-172.8%N/A(24.2)%0.044,600Dec-1631-Jan-172.1%N/A16.3%0.034,500Sep-1620-Oct-161.5%N/A(6.3)%0.024,400Jun-1621-Jul-167.6%N/A11.9%4,3000.012017Erevenuerevisions($mn)Mar-1621-Apr-167.1%N/A52.3%4,2000.0016-16-16-17-17-17-17-17-17-17-17-17-Dec-1519-Jan-15(8.0)%(177.4)%(6.3)%OctDecJanFebAprJunJulSepSep-1515-Oct-15(4.2)%N/A(1.5)%NovMarMayAugRevenueEPSJun-1516-Jul-15(5.3)%N/A2.6%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE22FIGURE23AMDTradingVolume&PriceAMDShortInterest&DaystoCover160.0$161803.5140.0$141603.0Stockprice(closing)120.0$121402.5Daystocover120100.0$101002.080.0$8801.560.0$6601.040.0$44020.0$2Shortinterest(millionshares)200.5Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201720 Barclays|U.S.SemiconductorsCaviumReports3Q17–Wednesday,November1KeyPointsExpectanothermodestbeatandraiseasOcteonIIIramps,QLGCisontracktogrow10%thisyear,andnewproductscontinuetoprogressmostnotablyLiquidSecurity,Fusion-M,andLIO2.LiquidSecuritysignificantlycontributestogrowthstartingin2HasitshipstoAmazonandpotentiallyseveralotherlargedatacentersin2018ataccretiveGMs(~90%)anda$30kASP.Whilethiswas<$1Mofrevenueperquarterpreviously,webelieveitcouldbe$2MinQ3and$20M+in2018.Fusion-MstillgooddespitefearsasitisleveredtoRelianceJioinIndia,whichisoutgrowingthebroadermarketadding5Msubspermonth.5Gfixedwirelesscouldalsobeasourceofgrowthin2H18atVerizon.WebelieveCAVMshouldtrendtowardour$80PTas2019comesintoview,whichshouldyield$4+inEPSasthecompanycontinuestoexecuteonmultiplenewproductrampsanditscorebusinessreaccelerates.FIGURE24CurrentQuarterSEPTEMBERQUARTERRESULTSExpectrevenueslightlyaheaddrivenbyFusion-M,LIO,BarclaysEstConsensusGuideLiquidSecurity,andQLGCstorageconnectors.Revenues($M)$250.5M$250.1M$247-253MLiquidSecurityshouldbe$2M+asrampcontinuesatleadQ/Q+3.5%+3.3%-1%to+1%GMs66.1%66.1%66.1%customerAmazon(Auglaunch).Opex$103.0M$103.1M$103MTaxRate2.7%~2.7%GMsshouldberoughlyinline.GAAPEPS($0.06)Non-GAAPEPS$0.74$0.74$0.73-0.75EPSshouldbeslightlyaheadofStreet$0.74.ShareCount(M)73.573.5MSegmentDetailBarclaysEstGuideCommentsRev($M)Q/QEnterprise&ServiceProvider$183.8M+4%Datacenter$55.3M+5%Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE25GuidedQuarterDECEMBERQUARTERGUIDERevenueshouldbeslightlyaheadofStreetasLiquidSecurity,BarclaysEstConsensusLiquidIO2(shouldbebiggerthanLIO1bythispoint),andFusionRevenues$260.0$257.6continuetorampandOcteonbeginstoaccelerate.Q/Q+3.8%+3.0%GMs66.3%66.4%QLGCshouldgrow10%vs.Q417ledbystorageconnectorsandOpex$103.7M$104.0MsomegrowthinEthernet(10Gsharegainsandearly25/100G).TaxRate2.9%GAAPEPS$0.03ExpectGMroughlyinline.Non-GAAPEPS$0.82$0.80ShareCount73.7MEPSshouldbeslightlyaheadofSt$0.80andclosertoour$0.82.SegmentDetailBarclaysEstRev($M)Q/QEnterprise&ServiceProvider$195.8+3%Datacenter$64.3+7%Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201721 Barclays|U.S.SemiconductorsFIGURE26CAVM:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revenues$251M$260M$982M$1,088MBARCLAYSEPS$0.74$0.82$2.80$3.56Revenues$250M$258M$979M$1,094MCONSENSUSEPS$0.74$0.80$2.79$3.55Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE27FIGURE28CAVM2017ERevenue&EPSRevisionsCAVMGuidanceSurprises1,0002.90Cavium(CAVM)QuarterReportRevenueEPSPrice9002.702016EEPSrevisions($)EndedDateSurprise%Surprise%Impact%2.50800Jun-172-Aug-170.8%1.7%4.0%2.30Mar-1726-Apr-171.6%5.3%3.5%7002.10Dec-161-Feb-171.1%6.6%(0.6)%6001.90Sep-161-Nov-161.2%6.5%(5.5)%5001.70Jun-1626-Jul-160.8%3.2%7.1%2016Erevenuerevisions($mn)4001.50Mar-1627-Apr-16(3.5)%(10.4)%(10.5)%16-16-16-16-16-16-16-16-16-17-17-17-Dec-1527-Jan-16(0.8)%(8.1)%2.4%AprJunJulSepOctDecJanFebMayAugNovMarSep-1528-Oct-15(7.7)%(27.5)%(3.9)%RevenueEPSJun-1529-Jul-15(5.1)%(14.2)%6.4%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE29FIGURE30CAVMTradingVolume&PriceCAVMShortInterest&DaystoCover3.0$801012.0$7092.5Stockprice(closing)10.08$607Daystocover2.08.0$5061.5$4056.0$3041.04.03$200.522.0$10Shortinterest(millionshares)1Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201722 Barclays|U.S.SemiconductorsCirrusLogicReportsC3Q17–Thursday,November2KeyPointsWebelieveSeptembercanbeslightlyaheadbutseesomerisktoDecemberandevenMarchasCRUS’contentisdownthisgenerationandbuildsarelaterfortheXvspriorcycles.Thecompanyguidedto‘modestgrowth’inFY18(March)yettheStreethasthemgrowing6.5%Y/Yleavinglittlewiggleroom.Wewouldhighlightmarginshavebeenabrightspotandcansoftensomeoftherevenuesoftness.WeprefertoplaytheAAPLsupplychainwithAVGOandSWKScontentgainsthisgenerationvs.underperformancelast3months.ForCirrus,webelievetheadapter(~$1ASP)islikelynotincludedin2018leavinganotherlegdownincontentfor2018,whichisnotyetreflectedinStreetestimates.Longerterm,wearealsoseeinglittletonotractionwithvoiceauthentication,MEMSmicrophones,orANCtooffsetthelossoftheadapter.Additionally,webelievethemovetowirelessheadphonesingeneralisanegativeforCRUSlonger-termgiventheyalsoreceive$1ofcontentintheinboxheadphonesandhavelittleplayinwirelessgiventheirmorepowerhungrydigitalANCapproach.OurCY17revenue/EPSmoveto$1576M/$4.66(prior$1594M/$4.74),andCY18movesto$1573M/$4.13(prior$1559M/$4.03).Ourpricetargetof$55isbasedupon13xourCY18EEPSof$4.13.FIGURE31CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueslightlyaheaddrivenbygenerallyknowncontentatBarclaysEstConsensusGuideRevenues$415M$410M$390-430MAAPL(slightlydowny/y)andpredeterminedbuildplansalreadyQ/Q29.4%27.9%+22%to+34%inguidance.GMs49.5%49.0%48-50%Opex$97M$98M$94-100MGMshouldbeslightlyahead,asmanagementtendstobeTaxRate22.5%21-23%GAAPEPS$1.02$0.92conservative.Non-GAAPEPS$1.26$1.20$1.01to$1.40ShareCount67.2Opexshouldberoughlyinline.Revenue:ExpectEPSslightlyaheadofStreet$1.20.PortableAudio$374MNon-Portable&Other$41MSource:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE32GuidedQuarterDECEMBERQUARTERGUIDEExpectrevenuebelowasAAPLrampcontinues,butbuildsareBarclaysEstConsensusRevenues$512M$527MlaterfortheIPXvs.priorcycles.IfthereareanyIP8cuts,theyQ/Q23.4%28.4%won’thappenuntilNov/DecbutsuppliershavegenerallyNon-GAAPGMs49.1%48.6%Opex$102M$102MalreadybeenmoreconservativethanAAPLanalysts.Est.TaxRate22.0%GAAPEPS$1.51$1.51Wemodel$435MfortotalAAPLinQ4(IP8/X47.5MunitsinQ4ImpliedNon-GAAPEPS$1.74$1.78forsuppliers,includingleadtime)ShareCount67.2M67.8MGMshouldbe50-100bpahead.Revenue:PortableAudio$473MNon-Portable&Other$39MEPSslightlybelowStreet$1.78andclosertoour$1.74.Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201723 Barclays|U.S.SemiconductorsFIGURE33CRUS:Barclaysvs.ConsensusChangestoRevenueandEPSEstimates-Newvs.Oldvs.ConsensusSepQDecQCY17CY18Revenues$415M$512M$1,576M$1,573MNEWEPS$1.26$1.74$4.66$4.13Revenues$410M$535M$1,594M$1,559MOLDEPS$1.21$1.87$4.74$4.03Revenues$410M$527M$1,586M$1,700MCONSENSUSEPS$1.20$1.78$4.64$4.72Source:CompanyReports,ThomsonReuters,BarclaysResearchFIGURE34FIGURE35CRUS2017ERevenue&EPSRevisionsCRUSGuidanceSurprises1,6604.50CirrusLogic(CRUS)1,640QuarterReportRevenueEPSPrice4.002017EEPSrevisions($)1,620EndedDateSurprise%Surprise%Impact%1,6003.50Jun-172-Aug-170.9%5.7%(6.9)%1,580Mar-173-May-170.0%(2.8)%0.1%1,5603.001,540Dec-161-Feb-17(3.9)%2.5%(14.0)%2.501,520Sep-1627-Oct-1612.4%35.6%6.9%1,5002.00Jun-1627-Jul-1622.5%59.2%19.3%1,4802017Erevenuerevisions($mn)1,4601.50Mar-1626-Apr-16(6.7)%(26.3)%12.4%16-16-16-17-17-17-17-17-17-17-17-17-Dec-1527-Jan-16(12.9)%(37.9)%16.4%OctDecJanFebAprJunJulSepNovMarMayAugSep-1528-Oct-158.0%11.7%(4.1)%RevenueEPSJun-1522-Jul-159.6%21.6%16.3%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE36FIGURE37CRUSTradingVolume&PriceCRUSShortInterest&DaystoCover5.0$8066.04.5$704.0Stockprice(closing)55.0$603.5Daystocover44.03.0$502.5$4033.02.0$301.522.0$201.011.00.5$10Shortinterest(millionshares)Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201724 Barclays|U.S.SemiconductorsCypressReports3Q17–Thursday,October26KeyPointsIndustrialtailwinds,betterIoT,andUSB-CrampatAAPLshoulddriveanotherinbeatandraise–see(U.S.Semiconductors:IP8Teardown:CDMAModelRevealsUpdatedRF,CYConfirmed,9/22/17).InIoT,CYhascontentintheEchoShow(BT+WLAN)andtheNintendoSwitch(20Munitsexpectedat~$4ofcontent)bothwhichshoulddrivebetterIoTrevenueintoDecember,wherethecompanyinitiallyindicatedthesegmentcouldbedown.Marginexpansioniscriticalandthecompanyexpectstoexit2017at~43%and2018at~48%onbetterutilizationandmix.WhilesomemaydrawadirectlinefromNORmarginexpansioninTaiwan,CYhas1-3yearcontractswhichtaketimetogrindhigherbutthisshouldeventuallycatchup.Ourpricetargetof$18isbasedupon15xourCY18EPSof$1.24.OurCY17revenue/EPSare$2330M/$0.8),andCY18are$2511M/$1.28.CYAAPLwinaddstoacorebusinessthatremainsstrong,ledbyitsIoTproducts,drivingfurtheroperatingleverageatoneofthecheapestvaluationsinsemis(~13xCY18EPSbeforeAAPL).FIGURE38CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueaheadSt.$602M(1.5%Q/Q)withstrongIoT(+5%BarclaysEst.ConsensusGuideQ/Q)andcontributionfromAAPLUSB-CwininIP8/IPXRevenues$606M$602M$585-615MQ/Q+2.0%+1.5%-3%to+2%Utilizationwas75%intheJunequarterbutweexpectthattoGMs41.7%41.6%41-42%rampupmateriallygiventherevenueupsideOpex$146.0M$146.1M$145-$147TaxRate3.3%~3%GMalsoexpectedtoexittheyearat43%andasaresultweGAAPEPS$0.01$0.02$(0.05)to$(0.00)Non-GAAPEPS$0.24$0.23$0.21to$0.25shouldseematerialimprovementinthequarterIoTandUSB-CShareCount366.0M366.0revenueflowsthroughBusinessSegmentsEstimatedEPSlikelyaheadofStreet$0.23andclosertoour$0.24RevenueQ/QMCD+3%$371.6M+3%MPD+0%$234.1M+0%Overall$605.7Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE39GuidedQuarterDECEMBERQUARTERGUIDERevenueaheadofStreet$593M(-1.5%Q/Q)andclosertoourBarclaysEst.Consensus$599M(-1.2%Q/Q)Revenues$599M$593MQ/Q-1.2%-1.5%GMtohittheyear-end43%targetwithhigherutilization,betterGMs43.0%42.8%memorypricing,andmorehighermarginIoTandUSB-COpex$147.4M$147.1MEst.Taxes3.2%EPSaheadStreetof$0.24andlikelyclosertoour$0.25GAAPEPS$0.02-$0.01Non-GAAPEPS$0.25$0.24Est.ShareCount366.0MSource:CompanyReports,ThomsonReuters,andBarclaysResearch18October201725 Barclays|U.S.SemiconductorsFIGURE40CY:Barclaysvs.ConsensusEstimatesChangestoRevenueandEPSEstimates-Newvs.Oldvs.ConsensusSepQDecQCY17CY18Revenues$606M$599M$2,330M$2,511MNEWEPS$0.24$0.25$0.82$1.24Revenues$606M$599M$2,330M$2,511MOLDEPS$0.24$0.24$0.81$1.28Revenues$602M$593M$2,321M$2,467MCONSENSUSEPS$0.23$0.24$0.80$1.15Source:CompanyReports,ThomsonReutersandBarclaysResearchFIGURE41FIGURE42CY2017ERevenue&EPSRevisionsCYGuidanceSurprises2,3000.78CypressSemiconductorCorp.(CY)0.76QuarterReportRevenueEPSPrice2017EEPSrevisions($)2,250EndedDateSurprise%Surprise%Impact%0.74Jun-1727-Jul-174.2%9.8%0.1%2,2000.72Mar-1727-Apr-172.2%1.9%(2.7)%0.702,150Dec-162-Feb-172.7%8.1%8.9%0.68Sep-1627-Oct-161.9%6.6%(1.5)%0.662,1000.64Jun-1628-Jul-1610.6%(4.1)%(0.3)%2017Erevenuerevisions($mn)2,0500.62Mar-1628-Apr-160.1%10.9%(0.1)%16-16-16-17-17-17-17-17-17-17-17-17-Dec-1528-Jan-161.1%(43.5)%(6.2)%OctDecJanFebAprJunJulSepNovMarMayAugSep-1522-Oct-15(7.0)%(21.4)%3.4%RevenueEPSJun-1523-Jul-150.0%(0.9)%8.9%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE43FIGURE44CYTradingVolume&PriceCYShortInterest&DaystoCover14.0$18458.012.0$16407.0Stockprice(closing)$14356.010.0Daystocover$12305.08.0$10254.06.0$8203.0$6154.0$4102.02.0$2Shortinterest(millionshares)51.0Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201726 Barclays|U.S.SemiconductorsIDTIReportsC3Q17–Monday,October30KeyPointsWeexpectinlineresultswithguidancedirectionallybelowelevatedStreetnumbersof$212M(5.5%Q/Q)and$0.40inEPS.ThePurleyrampshouldonlybeabout10%ofserversQ4with50%exiting2018(notahugedriverinDecafterstrengthlasttwoquartersinmemoryinterface).TheDecemberguideassumesdoubledigitgrowthinmemoryinterfaceandweseeriskhere.RDIMMcouldseestrongunittailwind(6channelsvs.prior4withusersincentivizedtouseatleast1DIMMperchannel)overthenext2yearsbutthemarketoverlooksthatLRDIMMadoptionshouldfall(don’tneedbuffer@2DIMMperchannelwithPurley),whichshouldfallto2-3%unitvolumeofthemarket(vs.7%today)butgivenASPsare4-5xhigheritrepresents30-40%oftotaldollars.InConsumer,AAPLadoptedthelegacyQistandard,whichmanyhaveequatedtoaftermarketsuccessofIDTIinwirelesscharging.HowevertheiPhone8/XaswellastheWatch3(IDTIloss)useAVGOwirelesschargingandwedon’tdrawastraightlinetoIDTIadoptionespeciallyinlargerapplications(chargingpad)wherediscretechipscanbeused(TXN).RemainUWbutraisepricetargetto$24(from$22)giventherun-upinthegroup-nowbasedupon16.5x(prior15x)ourCY18EEPSof$1.45.Thestockhasworkedonmemoryinterfaceandcharginghopesbutwedon’tseeenoughtovalidateelevatedDecembernumbersasrampslikelyhappennextyearifatall.FIGURE45CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueinlinewithStreet$201M(2%Q/Q)withstrengthinBarclaysEstConsensusGuideCommunicationsRevenues$201M$201M$196-206MQ/Q2%2%-2%to+3%Consumerisexpecteddown~6%withWirelesschargingdownGMs61.3%61.0%61.3%+/-100bpsOpex$71.8M$72.8M$71.8M+/-$1.0MandZMDIflatTaxRate5.0%5.0%GAAPEPS$0.16$0.18EPSinlinewiththeStreet$0.34.Non-GAAPEPS$0.34$0.34$0.32to$0.36ShareCount139M139MSource:CompanyReports,ThomsonReuters,andBarclaysResearchRevenue:Communications$61M+7%Q/QComputing$77M+3%Q/QFIGURE46Consumer$37M-6%Q/QGuidedQuarterAutoandInd.$26M+0%Q/QDECEMBERQUARTERGUIDEWeexpectrevenuedirectionallybelowelevatedstreetnumbersBarclaysEstConsensusRevenues$204M$212M$212M(5.2%Q/Q)Q/Q1.6%5.2%ManyanalystshavestronggrowthinDecandMargivenIDTI’sGMs61.9%61.6%Opex$72.2M$71.6MFYguidanceof$830-835M.ThecompanydidnotreiteratethatTaxRate5.0%guidancelastearningsbutthencorrectedtherecordandkeptit.GAAPEPS$0.21$0.18Thiswillsurelybeaskedagainthiscall.Non-GAAPEPS$0.36$0.40ShareCount139MWeexpectEPSdirectionallybelowStreet$0.40.Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201727 Barclays|U.S.SemiconductorsFIGURE47IDTI:Barclaysvs.ConsensusRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revs$201M$204M$777M$826MBARCLAYSEPS$0.34$0.36$1.37$1.45Revs$201M$212M$785M$887MCONSENSUSEPS$0.34$0.40$1.42$1.74Source:CompanyReports,ThomsonReutersandBarclaysResearchFIGURE48FIGURE49IDTI2017ERevenue&EPSRevisionsIDTIGuidanceSurprises7901.60IntegratedDeviceTechnology(IDTI)780QuarterReportRevenueEPSPrice1.502017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%7701.40Jun-1731-Jul-170.6%(1.0)%(2.7)%760Mar-171-May-175.5%(8.9)%(4.8)%7501.30Dec-1630-Jan-17(2.4)%(2.8)%(4.4)%7401.20Sep-1631-Oct-16(4.2)%(1.3)%10.4%7307201.10Jun-161-Aug-16(4.9)%(11.3)%(11.9)%2017Erevenuerevisions($mn)7101.00Mar-162-May-16(0.3)%7.1%5.2%16-16-16-17-17-17-17-17-17-17-17-17-Dec-151-Feb-16(4.8)%(8.5)%(26.8)%OctDecJanFebAprJunJulSepNovMarMayAugSep-1526-Oct-152.2%12.0%7.3%RevenueEPSJun-153-Aug-150.8%2.1%5.7%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE50FIGURE51IDTITradingVolume&PriceIDTIShortInterest&DaystoCover5.0$30128.04.57.04.0$25Stockprice(closing)106.03.5Daystocover$2083.05.02.5$1564.02.03.0$1041.52.01.0$520.5Shortinterest(millionshares)1.0Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201728 Barclays|U.S.SemiconductorsIntelReports3Q16–Thursday,October26KeyPointsWeexpectInteltomodestlybeatandraiseasPCscontinuetotrendbetterthanthecompany’sdownmidsingledigitguideandDCGshouldreacceleratetohithighsingledigitgrowthdrivenbyPurley.Whilesentimenthasrecentlyimprovedabit,webelievethereismuchmoreroomtogohigherasthestocklooksincreasinglycheapespeciallygiventheproposedpolicychanges,andputtingtogetherasolidQwilldomuchtohelp.PCODMShipmentsareontracktobedownonly-2%y/yfortheyear(seePCPulseOctober2017–SeptHangsin,YearStilltrendingforModestDecline,12Oct2017),andthisstrengthisalsoreflectedinPCOEMsaleswhichwerejust-0.5%y/yinQ3(seePCMarketFlash:UnitTrajectoryRecoversAfterSoftJun-Q,11Oct2017).CoffeeLakejustlaunchedtogenerallypositivereviewsparticularlyforgamingandwillrampinlateOct,whichcoulddriveupsideinQ4.InDCG,PurleycontinuestorolloutandbringsanASPtailwindthatwilllastwellintonextyearasitisonlyexpectedtomakeupabout10%ofmixbyyearend.WeremainskepticalofthelongtermpotentialofAMDEpyc,butevaluationsarestillunderwayathyperscalethisfall.Giventhelongerevaluationtimesatenterprise,Intellikelydoesnotfacecompetitiontherenextyear.WeremainpositiveonINTCaswebelievethecompanycanreturntogrowthonbetterPCtrends,sustainedDCGgrowth,anddiversification(Memory–64L3Dlaunched,Dalianramping),Mobile,IoT,andAutos–TSLAinfotainmentwin,MBLYclosed).Ourpricetargetof$45isbasedupon14xourCY18GAAPEPSof$3.15.FIGURE52CurrentQuarterSEPTEMBERQUARTERRESULTSExpectrevenuetobeaheadonbetterPCtrends(PCOEMsalesBarclaysConsensusEstsEstsGuidedownjust0.5%y/yinQ3)andcontinuedPurleyramp.GAAPRevenues$15.71B$15.72B$15.70BN+/-$500MProformaGMandR&DandMG&Aroughlyinline.Q/Q6.4%6.5%3.0%to9.7%ProFormaGMs63.0%62.6%63.0%+/-2.0%GAAPEPSaheadofStreet$0.80.ProFormaR&D+MG&A$5.10B$5.10B$5.1BAmort.ofAcq.&Restr.$50.0M$0.0MOtherIncome$300.0M$300.0MTaxRate24.0%24.0%GAAPEPS$0.73$0.73$0.72ProFormaEPS$0.81$0.80$0.80ShareCount4,845Columns2Source:CapexCompanyReports,ThomsonReuters,andBarclaysResearch$3.60B$3.60BDepreciation$1.81B$1,808MFIGURE53GuidedQuarterDECEMBERQUARTERGUIDERevenueslightlyaheadasthePCmarkethangsinwithCoffeeBarclaysEstsConsensusEstsLakeasourceofpotentialupside,andDCGreacceleratestowardGAAPRevenues$16.03B$16.11Bhighsingledigity/ygrowth.Q/Q2.1%2.4%ProFormaGMs63.0%62.5%Memorycontinuestoprogressas2Hisexpectedtogrow20%ProFormaR&D+MG&A$5.05B$5.12Bvs1HAmort.ofAcq.&Restr.$50.0MOtherIncome$140.0MGMinlinetoslightlybetterasPurleybringsanASPtailwind.TaxRate22.0%GAAPEPS$0.76$0.76GAAPEPSaheadofStreet$0.83.ProFormaEPS$0.84$0.83ShareCount4,835Source:ImpliedCapexCompanyReports,ThomsonReuters,andBarclaysResearch$3.67BDepreciation$1.90B18October201729 Barclays|U.S.SemiconductorsFIGURE54INTC:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revs$15,706M$16,033M$61,298M$62,876MBARCLAYSEPS$0.81$0.84$3.03$3.19Revs$15,723M$16,106M$61,388M$63,253MCONSENSUSEPS$0.80$0.83$3.01$3.12Source:CompanyReports,ThomsonReutersandBarclaysResearchFIGURE55FIGURE56INTC2017ERevenue&EPSRevisionsINTCGuidanceSurprises61.43.00IntelCorporation(INTC)61.2QuarterReportRevenueEPSPrice61.02.952017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%60.82.90Jun-1727-Jul-172.6%8.2%1.0%60.660.4Mar-1727-Apr-170.5%6.0%(3.4)%2.8560.2Dec-1626-Jan-171.9%5.5%1.1%60.02.8059.8Sep-1618-Oct-16(0.9)%(2.8)%(5.9)%59.62.752017Erevenuerevisions($B)Jun-1620-Jul-161.9%2.6%(4.0)%59.459.22.70Mar-1619-Apr-16(4.5)%(3.9)%1.3%16-16-16-17-17-17-17-17-17-17-17-17-Dec-1514-Jan-161.6%(0.3)%(9.1)%OctDecJanFebAprJunJulSepNovMarMayAugSep-1513-Oct-15(0.1)%5.2%2.4%RevenueEPSJun-1515-Jul-151.1%4.8%0.7%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE57FIGURE58INTCTradingVolume&PriceINTCShortInterest&DaystoCover40.0$421407.035.0$401206.0Stockprice(closing)30.01005.0Daystocover$3825.0804.020.0$36603.015.0$34402.010.0$325.0201.0Shortinterest(millionshares)Tradingvolume(millionshares)0.0$3000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201730 Barclays|U.S.SemiconductorsMACOMReportsC3Q17–Tuesday,November14KeyPointsWeexpectinlinetoslightlybelowresults,althoughnumbershavecomedownintoearningsandOpticalweaknessisgenerallywellunderstoodatleastthroughDecember.Thegrowthstoryisagainpushedtotherightasthecompanyhasbrokenmorepromisesandstrugglestoregaincredibility.The100dayserverprocesshasturnedinto>200dayswiththecompanyburning~$5MaquarterkeepingtheARMbusinessafloat.TheeventualbuyerislikelyafinancialbuyeralongwithastrategicpartnerwithMACOMtakingaminorityinterest;asolutionbasedonanearn-outwithlittleifanyupfrontcashandasolutionfarfromtheonewewereinitiallypromised.Wecontinuetobelievethisbusinessneedstobeshutdownimmediately.LasersarenowqualifiedinLowellbutcustomerqualifications/ramparetakinglonger.Furthermore,thecompanyreallocatedresourcesawayfromA&Dtofocusonthelasereffort,whichhasstuntedgrowththereaswell(original40%y/ygrowthguidance)nowlikelyflattodowninDecember.Fornow,weremainOWwithafavorablesetupintoearningsaswebelievegeneralOpticalweaknessiswellunderstood,loweredestimatesareactuallyachievable,andthedatacenterisstillalargeopportunity.Overpromisesanddelayshaveputtheminthepenaltyboxbutwearestillintriguedbylongertermopportunitiesinto2018.Ournewpricetargetof$50isbasedupon19xourCY18EEPSof$2.69(prior$63,20xourpriorEPSof3.21).OurCY17revenue/EPSmoveto$720M/$2.23(prior$723M/$2.27),andCY18movesto$781M/$2.69(prior$831M/$3.21).FIGURE59CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueroughlyinlinewithStreet$170M(-12.6%Q/Q)asConsensusestimateshavecomedownintoearningsandareachievable.BarclaysEstsEstsGuideRevenues$169.5M$170.0M$165-174MIncludespartialcontributionfromtheacquisitionofHigh-SpeedQ/Q-12.9%-12.6%-3%to+3%GMs59.5%59.5%58%to61%OpticalreceiversfromLuna(~$1Mrev/~$1Mopex–previouslyOpex$63M$63M~$63.0M$6M/qrevenuerunratebeforeChinaMetro/LonghaulTaxRate6.0%Quarterweakness).GAAPEPS$0.03Non-GAAPEPS$0.48$0.46$0.45to$0.50EPSroughlyinlineStreet$0.46.ShareCount66.766.7MSource:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE60GuidedQuarterDECEMBERQUARTERGUIDERevenueinlinetoslightlybelowStreet$170M(flat)withfullConsensusquartercontributionfromLuna.BarclaysEstsEstsRevenues$170.2M$171.4MOpticallikelydoesn’trecoveruntilatleastQ118.Q/Q0.4%0.8%GMs59.7%60.0%EPSinlinewithStreet$0.45.ImpliedOpex$62M$63MTaxRate10.0%GAAPEPS$0.01Non-GAAPEPS$0.45$0.45Est.ShareCount66.8Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201731 Barclays|U.S.SemiconductorsFIGURE61MTSI:Barclaysvs.ConsensusChangestoRevenueandEPSEstimates-Newvs.Oldvs.ConsensusSepQDecQCY17CY18Revenues$170M$170M$720M$781MNEWEPS$0.48$0.45$2.23$2.69Revenues$170M$173M$723M$831MOLDEPS$0.48$0.50$2.27$3.21Revenues$170M$171M$722M$830MCONSENSUSEPS$0.46$0.45$2.21$2.86Source:CompanyReports,ThomsonReutersandBarclaysResearchFIGURE62FIGURE63MTSI2017ERevenue&EPSRevisionsMTSIGuidanceSurprises9003.00M/A-COM(MTSI)800QuarterReportRevenueEPSPrice2.502017EEPSrevisions($)700EndedDateSurprise%Surprise%Impact%6002.00Jun-171-Aug-17(17.0)%(38.2)%(25.5)%500Mar-1725-Apr-17(0.1)%(0.7)%(6.5)%1.50400Dec-1631-Jan-1716.9%2.8%(3.2)%3001.00Sep-1615-Nov-161.1%(3.7)%6.5%2000.50Jun-1626-Jul-161.9%(2.8)%4.7%1002017Erevenuerevisions($mn)00.00Mar-1626-Apr-161.8%0.4%3.0%16-16-16-17-17-17-17-17-17-17-17-17-Dec-1526-Jan-16(0.8)%(5.1)%(4.3)%OctDecJanFebAprJunJulSepNovMarMayAugSep-1517-Nov-15(3.3)%0.0%4.0%RevenueEPSJun-1528-Jul-150.1%1.1%8.4%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE64FIGURE65MTSITradingVolume&PriceMTSIShortInterest&DaystoCover4.0$701218.03.5$6016.0Stockprice(closing)103.014.0$50Daystocover812.02.5$4010.02.06$308.01.546.0$201.04.00.5$102Shortinterest(millionshares)2.0Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201732 Barclays|U.S.SemiconductorsMaximReportsC3Q17–Thursday,October19KeyPointsSeptemberroughlyinlineandDecemberrevenuehigher(sell-intransition)offsetbyhigheropex(14-weekquarternotmodeledcorrectlybyStreet)$190Mvs.our$200M.ConsumershouldseeapositivetailwindinSeptemberasMXIMsawstrongwearableramps.MaximhasmateriallyunderperformedothersintheAuto/Industrialspaceduringaperiodofexcellentfundamentals.WeworrythatifthesetailwindssubsideMXIMcouldseemateriallyworsetoplinegrowthdespitetheresetLTM.Maximhasclosedthevaluationgapwithotheranalognames(historicallytradedatadiscounttootheranalognamesnow20xvs.TXN22x),opticallymakingtheequitylookexpensivecomparedtoothersgrowingtoplinemuchfaster.AutowastheoneareawhereMXIMhadabetterstorybutthosegrowthratesfellshortofexpectations–thiswouldbetheoneareatogetusexcited,particularlyEV.Ourpricetargetof$50isbasedupon20xourCY18EEPSof$2.49(prior$46basedon20xCY18E$2.35).OurCY17revenue/EPSmoveto$2.34B/$2.30(prior$2.33B/$2.26),andCY18movesto$2.43B/$2.49(prior$2.36B/$2.35).FIGURE66CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueandEPSroughlyinlinewithStreet$577M(-4.1%Q/Q)PriorBarclaysEstsConsensusEstsGuideand$0.56Revenues($M)$575M$577M$555-595MQ/Q-4.5%-4.1%Consumerstrength(strongwearableramps)ismorethanoffsetGMs66.5%66.4%65-68%Opex$189M$189M$189MbyseasonalweaknessacrossallotherbusinessesTaxRate15.0%15.0%GAAPEPS$0.51$0.52$0.48to$0.54ResetLTMincludesbettermargins(67%-70%),whichshouldNon-GAAPEPS$0.56$0.56$0.52to$0.58ShareCount(M)287.4McontinuetomateriallyimproveSegmentDetailPriorBarclaysEstsGuideEPSinlinewithStreet$0.56Rev($M)Q/QConsumer$154.5+4%UpIndustrial$159.0-3%DownComm&DataCenter$118.3-3%DownAutomotive$114.7-4%DownComputing$28.6-2%DownSource:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE67GuidedQuarterDECEMBERQUARTERGUIDERevenueslightlyaheadSt.$582M(0.9%Q/Q)andclosertoourPriorBarclaysEstsConsensusEstsRevenues($M)$586M$582M$586Q/Q2.0%0.9%GMs66.8%66.6%Thecompanyshouldcompletethetransitiontosell-inwiththeImpliedOpex$200M$190MTaxRate15.0%seconddistributorswitchingoverinQ4GAAPEPS$0.50$0.53Non-GAAPEPS$0.56$0.57Opexshouldbeclosertoour$200Masthecompanyhasa14-ShareCount(M)287.3MweekquarterSegmentDetailPriorBarclaysEstsRev($M)Q/QConsumer$144.1-8%Netnet,higherrevenueisoffsetbyhigheropexnettingEPSIndustrial$171.6+2%roughlyinlinewithStreet$0.57Comm&DataCenter$121.6-2%Automotive$120.2+4%Computing$28.9-2%Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201733 Barclays|U.S.SemiconductorsFIGURE68MXIM:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revenues$575M$586M$2,345M$2,433MBARCLAYSEPS$0.56$0.56$2.30$2.49Revenues$575M$568M$2,326M$2,365MOLDEPS$0.56$0.52$2.26$2.35Revenues$577M$582M$2,343M$2,404MCONSENSUSEPS$0.56$0.57$2.31$2.42Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE69FIGURE70MXIM2017ERevenue&EPSRevisionsMXIMGuidanceSurprises2,3702.35MaximIntegratedProducts(MXIM)2.30QuarterReportRevenueEPSPrice2,3602017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%2.252,350Jun-1720-Jul-17(2.5)%(4.4)%(5.7)%2.202,340Mar-1720-Apr-171.7%7.5%(1.2)%2.152,330Dec-1626-Jan-171.3%6.2%6.5%2.102,320Sep-1620-Oct-160.0%(2.7)%1.9%2.052,310Jun-1621-Jul-16(1.4)%(1.1)%1.7%2.002017Erevenuerevisions($mn)Mar-1621-Apr-161.1%3.6%2.2%2,3001.9516-16-16-17-17-17-17-17-17-17-17-17-Dec-1521-Jan-16(2.4)%(9.8)%3.7%OctDecJanFebAprJunJulSepSep-1522-Oct-15(8.7)%(22.6)%(3.0)%NovMarMayAugRevenueEPSJun-1523-Jul-15(6.2)%(1.9)%9.2%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE71FIGURE72MXIMTradingVolume&PriceMXIMShortInterest&DaystoCover5.0$6063.04.54.0$50Stockprice(closing)52.53.5Daystocover$4042.03.02.5$3031.52.0$2021.01.51.0$1010.50.5Shortinterest(millionshares)Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201734 Barclays|U.S.SemiconductorsQorvoReportsC3Q17–Thursday,Nov9(Projected)KeyPointsWeseesomerisktoDecguidancegivenAAPLtimingandlowerthanexpectedINTCsharegains(QRVOcontentonlyupmodestlyvs.highsingledigit).Thewildcardisnon-AppleasitisupinDecemberbutdownfortheyearamidlacklusterChinaandslightlybetteremergingmarkets.Fullyearguidance(March)wasalreadyreviseddownwardfromdoubledigitsto4-5%lastquarter,butthereseemstoevenberisktothosenumbers.WebelieveIP8/Xmodemmixiscloserto50/50vs.marketexpectationsofhigherINTC,reducingblendedQRVOcontentastheINTCmodelhasboththeirlowbandPADandETchip.Netnet,weexpectblendedcontentthisgeneration~$4.65,+2%y/y.ChinaMIITshipmentshavebeendowny/yfor7straightmonths.WhileQ3didseesomesequentialimprovement(+7%),Q2andQ3arestillbothdown12%y/yasthesoftnesslikelylastsinto1H18.WeseeriskespeciallytoQorvo,whohasthehighestChinaexposure(30-35%)amongRFandismoreleveredtothelowend,whichshouldseemoreofthisweakness.MarginsareafocusastheconcernishowmuchofalingeringeffecttheIP7low-bandPADissuesrepeatvs.howmuchcancostreductioneffortsoffset.TheIP8/XlowbandintheIntelmodelhasanewpartnumberbuttheRFdesignisessentiallyunchanged.WeprefertoplaytheAAPLsupplychainwithAVGOandSWKS,whichhavecontentgainsatAAPLandhavelowerChinaexposure.OurCY17revenue/EPSmoveto$2.98B/$4.88(prior$3.01B/$4.97),andCY18movesto$3.37B/$6.43(prior$3.39B/$6.51).FIGURE73CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueonlyinlineasChinaweaknesscontinues(Q3shipmentsBarclaysEst.ConsensusGuide-12%y/y)butsupportedbyslightlybetteremergingmarkets;Revenues$810M$813M~$810MQ/Q+26.4%+26.8%+26.4%AAPLbuildsshouldbefinepartiallyoffsetbylowerIP8/XGMs47.8%47.8%47.8%contentthanmarketexpectsduetolackofIntelmodemgains.Opex$166M$166M~$166MTaxRate8.5%~8.5%GAAPEPS$0.21$0.28GMandopexroughlyinline.Non-GAAPEPS$1.44$1.43$1.36-1.50ShareCount131.5M131.7M~131.3MExpectEPSroughlyinlinewithconsensus$1.43.Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE74GuidedQuarterDECEMBERQUARTERGUIDESeerevenuebelowStreet$899MgiventhelowerIP8/XblendedBarclaysEst.Consensuscontent,laterIPXbuilds,andcontinuedChinasoftness.Revenues$890M$899MQ/Q+9.9%+10.9%GMs48.0%48.4%GMguideafocus-wemodel48%vs.St48.4%.ImpliedOpex$167M$167MTaxRate8.5%EPSbelowSt1.74andclosertoour$1.70onthelowerrevenue.GAAPEPS$0.50$0.58Non-GAAPEPS$1.72$1.74Est.ShareCount131M132MSource:CompanyReports,ThomsonReuters,andBarclaysResearch18October201735 Barclays|U.S.SemiconductorsFIGURE75QRVO:Barclaysvs.ConsensusEstimatesChangestoRevenueandEPSEstimates-Newvs.Oldvs.ConsensusSepQDecQCY17CY18Revenues$810M$890M$2,984M$3,365MNEWEPS$1.44$1.72$4.88$6.43Revenues$810M$915M$3,009M$3,387MOLDEPS$1.44$1.81$4.97$6.51Revenues$813M$899M$2,996M$3,443MCONSENSUSEPS$1.43$1.74$4.90$6.56Source:Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE76FIGURE77QRVO2017ERevenue&EPSRevisionsQRVOGuidanceSurprises3,3005.50Qorvo(QRVO)3,2505.40QuarterReportRevenueEPSPrice5.302017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%3,2003,1505.20Jun-172-Aug-17(3.8)%(4.8)%0.0%5.103,100Mar-173-May-17(9.8)%(22.1)%(1.5)%5.003,050Dec-161-Feb-17(12.2)%(22.4)%(1.9)%4.903,0004.80Sep-163-Nov-16(2.7)%(13.5)%(10.0)%2,9504.70Jun-162-Aug-1617.0%10.0%(10.3)%2,9004.602,8504.50Mar-164-May-164.0%9.9%4.8%2017Erevenuerevisions($mn)2,8004.40Dec-154-Feb-16(3.2)%0.3%(3.9)%17-17-17-17-17-17-17-17-17-Sep-155-Nov-15(2.3)%1.2%23.2%JanFebAprJunJulSepMarMayAugJun-1529-Jul-15(5.8)%(13.8)%(14.2)%RevenueEPSSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE78FIGURE79QRVOTradingVolume&PriceQRVOShortInterest&DaystoCover5.0$901410.04.5$809.0124.0$70Stockprice(closing)8.03.5107.0Daystocover$603.06.0$5082.55.0$4062.04.0$301.543.01.0$202.00.5$10Shortinterest(millionshares)21.0Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201736 Barclays|U.S.SemiconductorsQuantennaReports3Q17–Wednesday,November15(Projected)KeyPointsWeexpectslightlybetterSeptemberresultsas10GWave3(Comcast)rampsto“atleast10%”ofrevenue(wemodel$6M).Decembershouldbeinlinetoaheadasthe10GrampcontinuesatComcastandtherestofthesyndicate(Coxplusothers).Clearvisibilityinto10GrampasweconfirmedQuantennacontentintheTechnicolormodeloftheXB6accesspointontheFCCsite(BasebandQT10GA+5GHz/2.5GHzchipsintwomodels,CGM4140COMforComcastandCGM4141COXforCox).RecallwepreviouslyalsoconfirmedQTNAcontentintheComcastArrisXB6model.OpexwillbeapointofinterestonthecallashigherR&Dcosts(incrementalhiringandmoreexpensivedigitalmaskcosts)erasedtherevenueupsidelastcall.WeremainpositiveonQTNAasbeginstorampinvolumeitsbestinmarket10GWLANsolutiontomultipleserviceproviderstosatisfythegrowingneedforhighperformanceconnectivity.Ourpricetargetof$21isbasedupon30xourCY18EEPSof$0.71.FIGURE80CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueandEPSslightlybetter.ConsensusBarclaysEstsEstsGuideComcastbeginsramping10Ginvolume,alongwithafewRevenues$50.1M$49.9M$49-51Mothersbuttoasmallerextent(weestimate$6Mtotal10Grev).Q/Q+6.5%+6.0%-2%to+2%GMs47.0%47.1%47.0%+/-100bpsGMandopexshouldbeinline.Opex$20.4M$20.4M$19.4-20.4MInterestExpense$0.0MTax$0.3M$0.1MGAAPEPS+$0.01$0.00to$0.02PFEPS(exESO)+$0.08+$0.08$0.07to$0.09Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE81GuidedQuarterDECEMBERQUARTERGUIDERevenueinlinetoslightlyaheadasComcast,Cox,andtherestConsensusofthesyndicateramps10G,whileACWave2isalsoexpectedtoBarclaysEstsEstsRevenues$55.1M$54.8Mreturntogrowth(weest15%Q/Q).Q/Q+9.8%+9.7%GMs47.7%48.0%Opexshouldbe~$23M(R&D+28%y/yguided)duetoOpex$23.2M$23.0Mincrementalhiringandtapeoutexpenses.Est.InterestExpense$0MTax$0.1MGMroughlyinline~48%,sequentiallyincreasingasadditionalGAAPEPS+$0.01ImpliedPFEPS(exESO)+$0.07+$0.09membersofthesyndicateramp,butstilldepressedduetoinitialShareCount38.8M10Grevenue.EPSinlinetoslightlyahead.Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201737 Barclays|U.S.SemiconductorsFIGURE82QTNA:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revs$50M$55M$190M$248MBARCLAYSEPS$0.08$0.07$0.25$0.71Revs$50M$55M$190M$242MCONSENSUSEPS$0.08$0.09$0.26$0.76Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE83FIGURE84QTNA2017ERevenue&EPSRevisionsQTNAGuidanceSurprises60.00.17Quantenna(QTNA)QuarterReportRevenueEPSPrice55.00.152017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%Jun-177-Aug-174.0%34.1%(7.0)%50.00.13Mar-178-May-179.2%68.4%6.0%45.00.11Dec-1613-Feb-175.3%100.3%6.1%40.00.0935.00.072017Erevenuerevisions($mn)30.00.0516-16-16-17-17-17-17-17-17-17-17-17-OctDecJanFebAprJunJulSepNovMarMayAugRevenueEPSSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE85FIGURE86QTNATradingVolume&PriceQTNAShortInterest&DaystoCover1.4$302.51.00.91.2$25Stockprice(closing)20.81.00.7Daystocover$200.81.50.6$150.50.610.4$100.40.3$50.50.20.2Shortinterest(millionshares)0.1Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201738 Barclays|U.S.SemiconductorsSiliconLabsReports3Q17–Wednesday,October25KeyPointsWeexpectabeatandraiseasSLABisabeneficiaryoftheoverwhelminglystrongAnalog/IndustrialtrendsaswellasadistinctlybettertrendofIoTacrosssemis(CYIoT).Thecompanyisflushwithcashandwesuspectlookingtodoanotheracquisitiontohelpbolsterthetoplinegrowthoncethisenvironmentsettles.Weareslightlywarygivenfullvaluationsacrosssemiconductorswithnoobviouslargetargetthatstrategicallyfitsanothersmalltuckinismostlikely.TheIoTTAMcontinuestoexpand(70Bunitsby2020)drivenbyanincreasingnumberofconnecteddevices(SLABfocusedontangibleareasinthehome,cities,andindustry)andthecompanynowhasamuchmorefilledoutandcompleteportfolio.Ourpricetargetof$86isbasedupon25xourCY18EEPSof$3.48(prior$72basedon21x$3.48).Weacknowledgeastrongbalancesheet(over~$7.50innetcashpershare)andpotentialforfuturegrowthdrivenbyIoT(MCU,Wireless,&Sensorproducts)andInfrastructure.FIGURE87CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueaheadofSt.$196M(3%Q/Q)asBroadcast(Video)andBroadbased(IoT+4%Q/Q)arestrongBarclaysEstsConsensusEstsGuideRevenues$196M$196M$193-199MGMstepdownwithmix(higherIoT,moreVideoandflatQ/Q+3%+3%-2%to+1%Infrastructure)GMs58.6%58.5%58.5%Opex$74.8M$74.7M74.5-75.0MNon-GAAPEPSslightlyaheadStreet$0.81.TaxRate11.0%11.0%GAAPEPS$0.47$0.42$0.35to$0.41Non-GAAPEPS$0.82$0.81$0.78to$0.84ShareCount43.2MSource:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE88GuidedQuarterDECEMBERQUARTERGUIDERevenuebetterthanSt.$198M(1%Q/Q)asBroadcaststepsdownbutIoTremainsstrongBarclaysEstsConsensusEstsRevenues$199M$198MItwillbeparticularlyinterestingtotrackmarginsintoDec.givenQ/Q+1%+1%GMs58.5%58.8%theincreasedcontributionofIoTmodulesOpex$75.0M$75.4MEPSaheadoftheStreet$0.82.TaxRate11.0%GAAPEPS$0.49$0.45Non-GAAPEPS$0.84$0.82ShareCount43.2MSource:CompanyReports,ThomsonReuters,andBarclaysResearch18October201739 Barclays|U.S.SemiconductorsFIGURE89SLAB:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revs$196M$199M$764M$825MBARCLAYSEPS$0.82$0.84$3.07$3.48Revs$196M$198M$763M$827MCONSENSUSEPS$0.81$0.82$3.06$3.46Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE90FIGURE91SLAB2017ERevenue&EPSRevisionsSLABGuidanceSurprises7603.00SiliconLaboratories(SLAB)7552.95QuarterReportRevenueEPSPrice2017EEPSrevisions($)7502.90EndedDateSurprise%Surprise%Impact%2.85745Jun-1726-Jul-171.7%4.4%(1.2)%2.807402.75Mar-1726-Apr-171.3%3.1%(0.8)%7352.70Dec-161-Feb-171.6%6.9%1.4%7302.657252.60Sep-1626-Oct-161.7%2.2%1.6%7202.55Jun-1627-Jul-160.4%1.0%4.2%2017Erevenuerevisions($mn)7152.50Mar-1627-Apr-163.3%19.1%2.9%7102.4516-16-16-17-17-17-17-17-17-17-17-17-Dec-153-Feb-161.1%0.2%(1.8)%OctDecJanFebAprJunJulSepSep-1528-Oct-150.6%13.9%9.4%NovMarMayAugRevenueEPSJun-1529-Jul-15(11.8)%(28.7)%(11.2)%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE92FIGURE93SLABTradingVolume&PriceSLABShortInterest&DaystoCover0.9$1001.46.00.8$90$80Stockprice(closing)1.25.00.7$701Daystocover0.64.0$600.50.8$503.00.40.6$400.32.0$300.40.2$200.21.00.1$10Shortinterest(millionshares)Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201740 Barclays|U.S.SemiconductorsSkyworksReportsC3Q17–Monday,November6KeyPointsSeptemberresultsshouldbeslightlyaheadasAAPLrampsandtheCDMAmodelmakesupalargerpartofthemix(~50%)thaniscurrentlypricedin,aseach5%changeinIPXmixleadstoa2-3%changeinblendedcontent.ExpectaconservativeinlineguidegivenIPXuncertainty.ThestockhaslaggedsemigroupgivenAAPLconcerns.Welikethesetupas1)suppliershavealwaysbeenmoreconservativethanAAPLanalystssotheeffectissmaller,and2)therealstoryisaboutIPXandassumingthephonesells(limitedAndroidcompetitionwith3Dsensinguntil2H18attheearliest),anyinitialsupplyconstraintslikelyresultsinabetterQ1andcyclefornextyear(2OLEDmodelsinthefall)whichismoreimportant.SkyworksmaintainsthelowbandPADandaddssomeextraDRxandaswitchmoduleintheCDMAIP8/Xandgainssomeincrementalcontentinconnectivityacrossallnewmodels.Netnet,weestimateblendedcontent+5%y/yto~$6.50.SeveralmonthsofChinasmartphoneweaknessisgenerallyunderstood(weexpectthistolastthrough1H18),butSWKScanpartiallyoffsetwithnewlaunchesliketheHuaweiMate10thismonthwhereweexpectSWKStomaintainshare.SWKSisalsolessleveredtoChina(20-25%)thanQRVO(30-35%).OurCY17revenue/EPSmoveto$3805M/$6.73(prior$3805M/$6.73),andCY18movesto$4151M/$7.51(prior$4047M/$7.30).Ournewpricetargetof$120isbasedupon16xourCY18EEPSof$7.51.Ourpriorpricetargetof$110wasbasedupon15xourCY18EEPSof$7.30.FIGURE94CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueslightlyaheadofStreetasweexpectmoreofa50/50BarclaysEst.ConsensusGuidemixofCDMAIPX(vs.30-40%CDMAgenerallyexpected)thatRevenues$981M$981M$980Mshouldboostblendedcontentabovewhatiscurrentlypricedin.Q/Q+8.9%+8.9%-0.1%GMs51.0%51.0%51.0%Weexpect~$6.50blendedcontentacrossIP8/X,with22MIP8Opex$124M$124M$124Mand5MIPXbuilds(56Mtotal)inQ3.TaxRate13.5%13.5%GAAPEPS$1.44$1.54GMandopexinline.Non-GAAPEPS$1.76$1.75$1.75ShareCount186.0~186.0MExpectEPSslightlyaheadofStreet$1.75.Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE95GuidedQuarterDECEMBERQUARTERGUIDEExpectrevenueinlinedespitethehighermixasSWKSremainsBarclaysEst.ConsensusconservativegivenIPXuncertainty.Revenues$1071M$1054MQ/Q+9.1%+7.5%Weestimate25M/25MIP8/Xbuilds(74M)total.GMs51.4%51.5%Opex$125M$127MGMandopexroughlyinline.TaxRate15.0%GAAPEPS$1.66$1.72EPSroughlyinline.Non-GAAPEPS$1.95$1.91Est.ShareCount185.7Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201741 Barclays|U.S.SemiconductorsFIGURE96SWKS:Barclaysvs.ConsensusEstimatesChangestoRevenueandEPSEstimates-Newvs.Oldvs.ConsensusSepQDecQCY17CY18Revenues$981M$1,071M$3,805M$4,151MNEWEPS$1.76$1.95$6.73$7.51Revenues$981M$1,071M$3,805M$4,047MOLDEPS$1.76$1.95$6.73$7.30Revenues$980M$1,054M$3,787M$4,141MCONSENSUSEPS$1.75$1.91$6.69$7.46Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE97FIGURE98SWKS2017ERevenue&EPSRevisionsSWKSGuidanceSurprises3,7807.00Skyworks(SWKS)3,760QuarterReportRevenueEPSPrice6.502017EEPSrevisions($)EndedDateSurprise%Surprise%Impact%3,740Jun-1720-Jul-170.7%1.3%(0.2)%3,7206.003,700Mar-1727-Apr-172.6%1.9%(4.3)%5.503,680Dec-1619-Jan-172.7%0.9%13.0%3,6605.00Sep-163-Nov-161.1%1.3%0.5%3,6404.50Jun-1621-Jul-16(0.0)%1.0%(8.6)%3,6202017Erevenuerevisions($mn)Mar-1628-Apr-16(6.2)%(7.8)%(6.9)%3,6004.0016-16-16-17-17-17-17-17-17-17-17-17-Dec-1528-Jan-16(5.2)%(5.8)%6.4%OctDecJanFebAprJunJulSepSep-155-Nov-150.7%2.4%7.1%NovMarMayAugRevenueEPSJun-1523-Jul-151.5%6.4%(5.2)%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE99FIGURE100SWKSTradingVolume&PriceSWKSShortInterest&DaystoCover8.0$120147.07.0$100126.0Stockprice(closing)6.0105.0Daystocover$805.084.04.0$6063.03.0$4042.02.0$201.021.0Shortinterest(millionshares)Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201742 Barclays|U.S.SemiconductorsTexasInstrumentsReports3Q17–Tuesday,October24KeyPointsExpectTXNtobeatandraiseasAnalogandIndustrialfundamentalsremainstrong.Thebusinessisgrowingdoubledigitsy/ywithtraditionalGDP+subsegments(AnalogandEmbedded)growing10%+.WithabroadbaseofcustomersacrossmanyendmarketsandPMIinUSatrecordhighs,EuropeverystrongandChinaelevated,weseerobustendmarketdemandsustainingintonextyear.TXNstandstogainthemostinourcoverageiftaxreformsucceeds;ourmodelsuggests16%accretionfromalowertaxrate(from30%to19%basedonourtaxanalysis).WemodelGMsmovingmodestlyhigherasdepreciationrollsoffincomingquarters,wafermixshiftsto300mm,andrevenueincreasestoIndustrialandAutoendmarkets.Ourpricetargetof$95isbasedupon22xourCY18EPSof$4.40(prior$85basedon20xCY18E$4.21).OurCY17revenue/EPSmoveto$14.73B/$4.18(prior$14.57B/$4.11),andCY18movesto$15.33B/$4.40(prior$14.88B/$4.21).Withacombinationofmacrotailwindsandcompanyspecificleversdrivingbenefits,weseeTXNcontinuingtoworkintonextyearbutcontinuetoquestionthelongevityofthiselevatedgrowthprofile.FIGURE101CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueaheadSt.$3.91B(5.9%Q/Q)asAnalog/IndustrialPriorBarclaysEstsConsensusEstsGuideRevenues($M)$3,954$3,911M$3.74-4.06Btailwindcontinues.Q/Q7.1%5.9%-5%to+3%GMs64.5%64.3%~64%GMcontinuetoimprovewithmoveto300mmanddepreciationGAAPOpex$898$914M~$898MTaxRate30.8%~30.8%falloffGAAPEPS$1.15$1.12$1.04-1.18Non-GAAPEPS$1.19$1.12GAAPEPSaheadoftheStreet$1.12.ShareCount(M)1,010Source:CompanyReports,ThomsonReuters,andBarclaysResearchFIGURE102GuidedQuarterDECEMBERQUARTERGUIDERevenueaheadconsensus$3.65B(-6.5%Q/Q)asendmarketsPriorBarclaysEstsConsensusEstsRevenues($M)$3,682$3,657arebetterthanseasonalgivencontinuedtailwindQ/Q-6.9%-6.5%ImpliedGMs63.5%63.7%GAAPEPSaheadoftheStreet$1.00.Est.GAAPOpex$863$878Est.TaxRate30.0%GAAPEPS$1.04$1.00Non-GAAPEPS$1.09$1.00Est.ShareCount1,005Source:CompanyReports,ThomsonReuters,andBarclaysResearch18October201743 Barclays|U.S.SemiconductorsFIGURE103TXN:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revenues$3,954M$3,682M$14,732M$15,329MBARCLAYSEPS$1.15$1.04$4.18$4.40Revenues$3,901M$3,571M$14,567M$14,880MOLDEPS$1.13$0.99$4.11$4.21Revenues$3,912M$3,661M$14,668M$15,186MCONSENSUSEPS$1.12$1.00$4.12$4.26Source:ThomsonReuters,BarclaysResearchEstimatesFIGURE104FIGURE105TXN2017ERevenue&EPSRevisionsTXNGuidanceSurprises14,6004.00TexasInstruments(TXN)14,4003.90QuarterReportRevenueEPSPrice2017EEPSrevisions($)3.80EndedDateSurprise%Surprise%Impact%14,2003.70Jun-1725-Jul-173.0%6.3%1.4%14,0003.60Mar-1725-Apr-172.0%5.4%(1.5)%13,8003.50Dec-1624-Jan-172.8%10.9%1.9%13,6003.403.30Sep-1626-Oct-160.4%2.5%(1.4)%13,4003.20Jun-1625-Jul-162.9%6.1%7.9%13,2003.102017Erevenuerevisions($mn)Mar-1627-Apr-160.7%1.7%(2.1)%13,0003.0016-16-16-17-17-17-17-17-17-17-17-17-Dec-1527-Jan-16(4.5)%(2.7)%0.9%OctDecJanFebAprJunJulSepSep-1521-Oct-152.7%11.8%11.9%NovMarMayAugRevenueEPSJun-1522-Jul-15(5.2)%(9.6)%2.5%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE106FIGURE107TXNTradingVolume&PriceTXNShortInterest&DaystoCover10.0$100255.09.0$904.58.0$80Stockprice(closing)204.07.0$703.5Daystocover6.0$60153.05.0$502.54.0$40102.03.0$301.52.0$2051.01.0$10Shortinterest(millionshares)0.5Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201744 Barclays|U.S.SemiconductorsXilinxReportsC3Q17–Wednesday,October25KeyPointsExpectresultsandguideinlinetoslightlyaheadasthecompanybenefitsfrombroaderIndustrialtrendsNeartermXilinxisbenefitingfrombetterauto(increasingcontentdespiteSAAR)andbetterIndustrialtrends,whicharemorethanoffsettingsomeWirelesssoftnessThecompanystilltradesatamultiplewellaboveitshistoricalrange(~28.5xvs.historical~23X);26xevenconsidering$7+ofexcesscash.INTCremainsbehindandisonlysampling14nmwiththemid-rangeArriaproductmissingcriticalfeatures(SERDES),allowingXLNXtocapitalizeonsharegainsinitscoremarkets(Auto,Comm.andA&D).WestillbelieveFPGAswillgarnerlimitedtractionforAIinthelongruncaughtinthemiddleofCPU(easiertoprogram,morefungible)andcustomsilicon(cheaperatvolume)butintheinterimthecompanycouldhavesmallwinsthathelpthestockwork.Ourpricetargetof$65isbasedupon24xourCY18EEPSof$2.69.FIGURE108CurrentQuarterSEPTEMBERQUARTERRESULTSRevenueinlinewithSt.$620M(+0.8%Q/Q)-withparticularPriorBarclaysEstsConsensusEstsGuidestrengthfromIndustrialandAutomotiveRevenues($M)$620M$621M$605-635MQ/Q+0.8%+0.9%-1.7%to+3.2%GMs70.0%70.0%69-71%Convertcontinuestodrivedownsharecount(down~6M)toOpex$253$254$253MOtherIncome$4$4M~260MTaxRate12.0%10.0-14.0%GAAPEPS$0.63$0.62$0.56to$0.70Non-GAAPEPS$0.63$0.63EPSinlinetoslightlyaheadStreet$0.63.ShareCount(M)259.8M260.0SegmentDetailPriorBarclaysEstsGuideRev($M)Q/QCommunications&DataCenter$246-2%DownIndustrial&A&D$265+3%UpBroadcast,Consumer&Automotive$109+4%UpSource:CompanyReports,ThomsonReuters,andBarclaysResultsFIGURE109GuidedQuarterDECEMBERQUARTERGUIDERevenueinlinetoslightlyaheadStreet$626M(+0.8%Q/Q)PriorBarclaysEstsConsensusEstsRevenues($M)$625M$626MSharesmovedowngiventheconvert(256Mfrom260M).Q/Q+0.8%+0.8%GMs69.5%69.3%Opex$258$255EPSslightlyaheadwithofStreet$0.62.OtherIncome$4TaxRate12.0%ImpliedGAAPEPS$0.62$0.62Non-GAAPEPS$0.62$0.62Est.ShareCount(M)255.8MSegmentDetailPriorBarclaysEstsRev($M)Q/QCommunications&DataCenter$253+3%Industrial&A&D$265-0%Broadcast,Consumer&Automotive$107-2%Source:FooterCompanyReports,ThomsonReuters,andBarclaysResultsFooter18October201745 Barclays|U.S.SemiconductorsFIGURE110XLNX:Barclaysvs.ConsensusEstimatesRevenueandEPSEstimates-Barclaysvs.ConsensusSepQDecQCY17CY18Revenues$620M$625M$2,470M$2,587MBARCLAYSEPS$0.63$0.62$2.45$2.69Revnues$621M$626M$2,472M$2,610MCONSENSUSEPS$0.63$0.62$2.45$2.78Source:Source:FooterThomsonReuters,BarclaysResearchEstimatesFIGURE111FIGURE112XLNX2017ERevenue&EPSRevisionsXLNXGuidanceSurprises2,4702.50Xilinx(XLNX)QuarterReportRevenueEPSPrice2,4652017EEPSrevisions($)2.40EndedDateSurprise%Surprise%Impact%2,460Jun-1726-Jul-170.7%3.1%(2.3)%2.302,455Mar-1726-Apr-170.5%4.0%7.4%2,450Dec-1625-Jan-17(0.1)%1.3%(3.7)%2.202,445Sep-1619-Oct-16(0.9)%(6.0)%1.0%2.102,440Jun-1627-Jul-16(0.3)%1.8%2.5%2017Erevenuerevisions($mn)Mar-1627-Apr-16(1.3)%0.7%(8.7)%2,4352.0016-16-16-17-17-17-17-17-17-17-17-17-Dec-1520-Jan-160.2%2.3%8.6%OctDecJanFebAprJunJulSepSep-1514-Oct-151.1%0.2%2.0%NovMarMayAugRevenueEPSJun-1522-Jul-15(8.1)%(16.5)%0.5%Source:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearchFIGURE113FIGURE114XLNXTradingVolume&PriceXLNXShortInterest&DaystoCover7.0$803014.06.0$7012.0Stockprice(closing)25$605.010.0Daystocover20$504.08.0$40153.06.0$30102.04.0$201.0$1052.0Shortinterest(millionshares)Tradingvolume(millionshares)0.0$000.016-16-16-17-17-17-17-17-17-17-17-17-16-16-16-17-17-17-17-17-17-17-17-17-17-OctNovDecJanFebMarAprMayJunAugAugOctOctNovDecJanFebMarAprJunJunJulAugSepMayTradingvolume(trailing5d)PriceShortInterestDaystoCoverSource:ThomsonReuters&BarclaysResearchSource:ThomsonReuters&BarclaysResearch18October201746 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALAnalogDevices(ADI)StockRating:EQUALWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD88.94Revenue3,4215,1735,921N/AN/APriceTargetUSD90.00EBITDA(adj)1,3432,6323,223N/AN/AWhyEqualWeight?WeacknowledgetheattractiveEBIT(adj)1,1332,0362,414N/AN/A2-3%divyield,benefitsfrompotentialpolicychangesPre-taxincome(adj)1,0781,8182,174N/AN/AandpotentialaccretionfromtheacquisitionofLLTC,Netincome(adj)9581,6401,848N/AN/AbutnotethatahigherdebtburdenpostdealclosemayimpactthemultipleinvestorswillpaygivenEPS(adj)($)3.074.634.95N/AN/AincreasedriskandlikelyslowercapitalreturnastheDilutedshares(mn)312.1354.0373.6N/AN/Acompanyworkstoreduceleverage.DPS($)1.641.701.80N/AN/AUpsidecaseUSD110.00MarginandreturndataAverageOurupsidecaseof$110isbasedupon20xourEBITDA(adj)margin(%)39.250.954.4N/A48.2upsideCY18EEPSof$5.50,whichassumesaboveEBIT(adj)margin(%)33.139.340.8N/A37.7industrygrowth,coreOPMexpansion,andupsidetoPre-tax(adj)margin(%)31.535.136.7N/A34.5synergiesfromLLTCacquisition.Net(adj)margin(%)28.031.731.2N/A30.3ROA(%)10.83.57.8N/A7.4DownsidecaseUSD70.00ROE(%)17.014.216.3N/A15.8Ourdownsidecaseof$70isbasedupon16xourdownsideCY18EEPSof$4.50,whichassumeslimitedBalancesheetandcashflow($mn)CAGRcoremarginimprovement,lowerASPs/unitvolumes,Tangiblefixedassets636960410N/AN/AandlowersynergiesfromacquisitionofLLTC.Intangiblefixedassets1,67912,24212,242N/AN/ACashandequivalents9219741,502N/AN/AUpside/DownsidescenariosTotalassets7,97021,15221,116N/AN/AShortandlong-termdebt1,7328,0506,950N/AN/AOtherlong-termliabilities153130130N/AN/ATotalliabilities2,80511,0719,964N/AN/ANetdebt/(funds)8117,0765,448N/AN/AShareholders"equity5,16610,08111,152N/AN/AChangeinworkingcapital1,226-2,957521N/AN/ACashflowfromoperations1,2819772,595N/AN/ACapitalexpenditure127203258N/AN/AFreecashflow1,1537742,336N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)29.019.218.0N/A22.1EV/sales(x)9.97.76.5N/A8.0EV/EBITDA(adj)(x)25.215.211.9N/A17.5EquityFCFyield(%)4.22.57.0N/A4.5P/Sales(x)9.66.45.6N/A7.2P/BV(x)5.43.13.0N/A3.8Dividendyield(%)1.81.92.0N/A1.9Netdebt/EBITDA(adj)(x)0.62.71.7N/A1.7Source:Companydata,BarclaysResearchNote:FYEndOct18October201747 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALBroadcomLimited(AVGO)StockRating:OVERWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD242.62Revenue13,29217,62519,090N/AN/APriceTargetUSD300.00EBITDA(adj)2,2497,0668,285N/AN/AWhyOverweight?AVGOisourTopPickasweseeEBIT(adj)5,3207,9658,864N/AN/AseesubstantialsynergiesfrompastM&AwithanewPre-taxincome(adj)4,8947,5548,461N/AN/AcommittmenttowardincreasingcapitalreturnsandNetincome(adj)4,6727,2158,080N/AN/Athepotentialforfuturedeals.ThecorebusinessbenefitsprimarilyfromtheseculargrowthinFBAREPS(adj)($)11.4515.9317.58N/AN/Afilters,amarketwebelieveislikelytogrow35%+Dilutedshares(mn)407.9453.0459.5N/AN/ACAGRandAVGOmaintains~70%share,and100GDPS($)1.944.086.00N/AN/Atransitioninthedatacenter.MarginandreturndataAverageUpsidecaseUSD350.00EBITDA(adj)margin(%)16.940.143.4N/A33.5Ourupsidecaseof$350isbasedupon18xourEBIT(adj)margin(%)40.045.246.4N/A43.9upsideCY18EEPSof$19.50,whichassumesupsidePre-tax(adj)margin(%)36.842.944.3N/A41.3tothepotentialtimingandamountofoperatingNet(adj)margin(%)35.140.942.3N/A39.5synergies,strongsecularFBARgrowth,andmultipleROA(%)0.30.40.4N/A0.3expansionfromde-leveringand/ormarginROE(%)0.60.80.9N/A0.7improvement.Balancesheetandcashflow($mn)CAGRDownsidecaseUSD220.00Tangiblefixedassets2,5092,8992,859N/AN/AOurdownsidecaseof$220isbasedupon15xourIntangiblefixedassets15,06810,8248,024N/AN/AdownsideCY18EEPSof$15.00,whichassumesCashandequivalents3,0976,52911,329N/AN/Areductionordelaysinrealizingoperatingsynergies,unexpectedintegrationcosts,andaslowerFBARTotalassets49,96650,03152,232N/AN/Aramp.Shortandlong-termdebt13,64213,55013,550N/AN/AOtherlong-termliabilities11,82411,34810,948N/AN/AUpside/DownsidescenariosTotalliabilities28,09027,07426,698N/AN/ANetdebt/(funds)10,5457,0212,221N/AN/AShareholders"equity21,87622,95825,535N/AN/AChangeinworkingcapital1,3914,9235,017N/AN/ACashflowfromoperations3,4116,5698,356N/AN/ACapitalexpenditure-723-1,066-800N/AN/AFreecashflow2,6885,5037,556N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)21.215.213.8N/A16.7EV/sales(x)9.16.75.9N/A7.2EV/EBITDA(adj)(x)53.916.613.6N/A28.1EquityFCFyield(%)2.75.06.8N/A4.8P/Sales(x)8.36.35.8N/A6.8P/BV(x)2.42.72.8N/A2.6Dividendyield(%)0.81.72.5N/A1.7Source:Companydata,BarclaysResearchNote:FYEndOct18October201748 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALCirrusLogicInc.(CRUS)StockRating:UNDERWEIGHTIncomestatement($mn)2017A2018E2019E2020ECAGRPrice(17-Oct-2017)USD54.83Revenue1,5391,6261,524N/AN/APriceTargetUSD55.00EBITDA(adj)380397318N/AN/AWhyUnderweight?WhileresultsshouldbefinethisEBIT(adj)396406324N/AN/AyearandevenupsidedependingonAAPLPre-taxincome(adj)394409327N/AN/A"supercycle"units,weareUWascontentlikelyNetincome(adj)299322260N/AN/AdeclinesatAAPLnextyear(adaptergoesaway),andwearenotseeingtractionwiththelongertermEPS(adj)($)4.504.793.80N/AN/Aopportunitiesinvoiceauthentication,MEMSDilutedshares(mn)666768N/AN/Amicrophones,andANC.DPS($)0.000.000.00N/AN/AUpsidecaseUSD70.00MarginandreturndataAverageOurupsidecaseof$70isbasedupon16xourupsideEBITDA(adj)margin(%)24.724.420.9N/A23.3CY18EEPSof$4.50,whichassumesadditionalEBIT(adj)margin(%)25.725.021.2N/A24.0penetrationofampsandANCsolutionatApple,whilePre-tax(adj)margin(%)N/AN/AN/AN/AN/Aadapterandheadsetremaininbox.Net(adj)margin(%)19.419.817.1N/A18.8ROA(%)21.218.512.3N/A17.4DownsidecaseUSD40.00ROE(%)29.222.714.5N/A22.2Ourdownsidecaseof$40isbasedupon13xourdownsideCY18EEPSof$3.00,whichassumesfurtherBalancesheetandcashflow($mn)CAGRASPandgrossmarginpressureatAAPL,slowerrampTangiblefixedassets168171167N/AN/AofANC,andlackofdiversificationintootherhandsetIntangiblefixedassets422421409N/AN/AOEMs.Cashandequivalents351486783N/AN/ATotalassets1,4131,6361,871N/AN/AUpside/DownsidescenariosShortandlong-termdebt6000N/AN/AOtherlong-termliabilities586060N/AN/ATotalliabilities262250229N/AN/ANetdebt/(funds)-291-486-783N/AN/AShareholders"equity1,1521,3861,642N/AN/AChangeinworkingcapital25467272N/AN/ACashflowfromoperations370350340N/AN/ACapitalexpenditure-42-43-43N/AN/AFreecashflow86308374N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)12.211.414.4N/A12.7EV/sales(x)2.12.01.9N/A2.0EV/EBITDA(adj)(x)8.58.09.1N/A8.5EquityFCFyield(%)N/AN/AN/AN/AN/AP/Sales(x)2.42.32.4N/A2.4P/BV(x)3.22.72.3N/A2.7Dividendyield(%)0.00.00.0N/A0.0Source:Companydata,BarclaysResearchNote:FYEndMar18October201749 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALCypressSemiconductorCorp.(CY)StockRating:OVERWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD15.86Revenue1,9422,3302,511N/AN/APriceTargetUSD18.00EBITDA(adj)-372278450N/AN/AWhyOverweight?WeareoptimisticaboutCY"slongEBIT(adj)231373527N/AN/AtermpotentialwithexposuretoattractiveendPre-taxincome(adj)186312466N/AN/Amarkets(Industrial/Automotive>50%ofrevenue)Netincome(adj)173300454N/AN/Aandgrowingbusinesses(incrementalAAPLUSB-Ccontent,IoT),whichalsohelpsimprovemarginsasEPS(adj)($)0.500.821.24N/AN/Athesebusinessesrampandincreasefabutilization,allDilutedshares(mn)347.9364.4366.0N/AN/Aontopof~3%dividendyield.DPS($)0.440.440.44N/AN/AUpsidecaseUSD21.00MarginandreturndataAverageOurupsidecaseof$21isbasedupon14xourupsideEBITDA(adj)margin(%)-19.111.917.9N/A3.6CY18EPSof$1.50whichassumesgreateradoptionEBIT(adj)margin(%)11.916.021.0N/A16.3oftouchinindustrialapplications,continuedstrengthPre-tax(adj)margin(%)N/AN/AN/AN/AN/AinIoT,greatergrowthinMCUs,greaterUSB-CNet(adj)margin(%)8.912.918.1N/A13.3content,andfastermarginexpansion.ROA(%)-17.6-1.42.9N/A-5.4ROE(%)-36.1-2.85.4N/A-11.2DownsidecaseUSD12.00Ourdownsidecaseof$12isbasedupon14xourBalancesheetandcashflow($mn)CAGRdownsideCY18EPSof$0.85(implied3.7%dividendTangiblefixedassets297367221N/AN/Ayield),whichassumesslowerrevenuegrowthIntangiblefixedassetsN/AN/AN/AN/AN/AparticularlyinUSB-C/IoT,andmarginexpansion.Cashandequivalents120297548N/AN/ATotalassets3,8724,0054,145N/AN/AUpside/DownsidescenariosShortandlong-termdebt1,1951,1531,121N/AN/AOtherlong-termliabilitiesN/AN/AN/AN/AN/ATotalliabilities1,9791,9131,896N/AN/ANetdebt/(funds)1,075856573N/AN/AShareholders"equity1,8922,0922,250N/AN/AChangeinworkingcapitalN/AN/AN/AN/AN/ACashflowfromoperations217295489N/AN/ACapitalexpenditure-5711-60N/AN/AFreecashflow160306429N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)31.819.312.8N/A21.3EV/sales(x)3.52.82.5N/A3.0EV/EBITDA(adj)(x)-18.423.814.1N/A6.5EquityFCFyield(%)2.95.37.4N/A5.2P/Sales(x)3.02.52.3N/A2.6P/BV(x)N/AN/AN/AN/AN/ADividendyield(%)2.82.82.8N/A2.8Source:Companydata,BarclaysResearchNote:FYEndDec18October201750 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALIntegratedDeviceTechnology,Inc.(IDTI)StockRating:UNDERWEIGHTIncomestatement($mn)2017A2018E2019E2020ECAGRPrice(17-Oct-2017)USD28.01Revenue728800833N/AN/APriceTargetUSD24.00EBITDA(adj)156154182N/AN/AWhyUnderweight?IDTIhasdoneagreatjobincostEBIT(adj)197205223N/AN/AreductionsandisclearlyhittingastrongcycleinPre-taxincome(adj)198197215N/AN/Amemoryinterface.WeremainUWaswirelessNetincome(adj)196187204N/AN/Acharginglikelywon"tprovidethetailwindmanyhopefor,wirelessinfraspendingislikelyslowing,GMsfaceEPS(adj)($)1.401.351.48N/AN/Aaheadwindfrommix,andwebelievethecurrentDilutedshares(mn)139139138N/AN/AvaluationalreadyaccountsfortheadditionalgrowthDPS($)0.000.000.00N/AN/Ainmemoryinterface.MarginandreturndataAverageUpsidecaseUSD30.00EBITDA(adj)margin(%)21.419.221.9N/A20.9Ourupsidecaseof$30isbasedupon17xourupsideEBIT(adj)margin(%)27.025.626.7N/A26.5CY18EEPSof$1.75,whichassumesgreaterrampofPre-tax(adj)margin(%)N/AN/AN/AN/AN/Anewproducts,fasterrampofwirelesscharging,andNet(adj)margin(%)26.923.424.5N/A24.9furthermarginleverage.ROA(%)10.17.87.8N/A8.5ROE(%)16.311.912.9N/A13.7DownsidecaseUSD20.00Ourdownsidecaseof$20isbasedupon15xourBalancesheetandcashflow($mn)CAGRdownsideCY18EEPSof$1.30,whichassumesslowerTangiblefixedassets817658N/AN/AthanexpectedintegrationofGigPeak,greaterSRIOIntangiblefixedassets416616616N/AN/Aheadwinds,sharelossinwirelesscharging,andlessCashandequivalents215345441N/AN/Amarginleverage.Totalassets1,1841,5461,630N/AN/AShortandlong-termdebt286481481N/AN/AUpside/DownsidescenariosOtherlong-termliabilities343838N/AN/ATotalliabilities410605607N/AN/ANetdebt/(funds)7113640N/AN/AShareholders"equity7749411,023N/AN/AChangeinworkingcapital79162100N/AN/ACashflowfromoperations169199201N/AN/ACapitalexpenditure-27-32-24N/AN/AFreecashflow137167177N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)20.020.818.9N/A19.9EV/sales(x)5.24.84.5N/A4.8EV/EBITDA(adj)(x)24.224.820.4N/A23.1EquityFCFyield(%)3.54.34.6N/A4.1P/Sales(x)5.34.94.7N/A5.0P/BV(x)5.04.13.8N/A4.3Dividendyield(%)0.00.00.0N/A0.0Source:Companydata,BarclaysResearchNote:FYEndMar18October201751 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALMaximIntegratedProducts(MXIM)StockRating:EQUALWEIGHTIncomestatement($mn)2017A2018E2019E2020ECAGRPrice(17-Oct-2017)USD49.86Revenue2,2962,3692,483N/AN/APriceTargetUSD50.00EBITDA(adj)9159571,042N/AN/AWhyEqualWeight?MXIMhastradedatadiscounttoEBIT(adj)751804889N/AN/AotherAnalognamesforsometimebutshouldbeablePre-taxincome(adj)730789876N/AN/AtoclosethatvaluationgapnowthatithasNetincome(adj)611671745N/AN/AsuccessfullydiversifieditsrevenueintoAuto,Comm/DataCenter,andIndustrial(now>65%ofEPS(adj)($)2.122.342.60N/AN/Arevenue).AutoisexpectedtocontinuegrowingDilutedshares(mn)288287287N/AN/AdoubledigitsandprofitabilityalsoimproveswithaDPS($)1.321.441.44N/AN/Amargintailwindduetomix.MarginandreturndataAverageUpsidecaseUSD55.00EBITDA(adj)margin(%)39.940.442.0N/A40.7Ourupsidecaseof$55isbasedupon20xourupsideEBIT(adj)margin(%)32.733.935.8N/A34.1CY18EEPSof$2.75,whichassumesfurthermarginPre-tax(adj)margin(%)N/AN/AN/AN/AN/Aleverage,moreaggressivebuybacks,and/orNet(adj)margin(%)26.628.330.0N/A28.3increasedpotentialforM&A.ROA(%)12.512.814.3N/A13.2ROE(%)26.025.628.0N/A26.5DownsidecaseUSD45.00Ourdownsidecaseof$45isbasedupon20xourBalancesheetandcashflow($mn)CAGRdownsideCY18EEPSof$2.25,whichassumesshareTangiblefixedassets607607440N/AN/Alossoraninventorybuildincellular,lessmarginIntangiblefixedassets582582582N/AN/Aleverage,slowerrampofnewproducts,andreducedCashandequivalents2,2462,4172,659N/AN/ApotentialforM&A.Totalassets4,5704,7464,839N/AN/AShortandlong-termdebt1,4881,4881,488N/AN/AUpside/DownsidescenariosOtherlong-termliabilities557557557N/AN/ATotalliabilities2,3682,3692,371N/AN/ANetdebt/(funds)-758-930-1,171N/AN/AShareholders"equity2,2032,3772,468N/AN/AChangeinworkingcapital829174257N/AN/ACashflowfromoperations774831900N/AN/ACapitalexpenditure-41-22-22N/AN/AFreecashflow733809879N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)23.521.319.2N/A21.3EV/sales(x)5.75.45.1N/A5.4EV/EBITDA(adj)(x)14.313.512.2N/A13.3EquityFCFyield(%)5.15.66.1N/A5.6P/Sales(x)6.26.05.8N/A6.0P/BV(x)6.56.05.8N/A6.1Dividendyield(%)2.62.92.9N/A2.8Source:Companydata,BarclaysResearchNote:FYEndJun18October201752 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALM/A-COMTechnologySolutionsHoldings,Inc.(MTSI)StockRating:OVERWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD37.70Revenue544702735N/AN/APriceTargetUSD50.00EBITDA(adj)97130177N/AN/AWhyOverweight?MACOMhasavarietyofgrowthEBIT(adj)133180193N/AN/Aopportunitiesacross100/400GOptical,GaNandPre-taxincome(adj)116163171N/AN/AActiveAntennaswhichhavethepotentialto4XNetincome(adj)106147154N/AN/Arevenueinthenext3-5years.Newproductsalsohavestrongmarginprofiles(70%+GM).EPS(adj)($)1.912.352.30N/AN/ADilutedshares(mn)556367N/AN/AUpsidecaseUSD60.00DPS($)0.000.000.00N/AN/AOurupsidecaseof$60isbasedupon18xourupsideCY18EEPSof$3.25,whichassumesafasterthanMarginandreturndataAverageexpectedrampofnew,highergrossmarginA&D,EBITDA(adj)margin(%)17.718.524.0N/A20.1OpticalandNetworksproductsandfastergrowthofEBIT(adj)margin(%)24.525.726.3N/A25.5theacquiredbusinesses.Pre-tax(adj)margin(%)N/AN/AN/AN/AN/ANet(adj)margin(%)19.421.020.9N/A20.4DownsidecaseUSD37.00ROA(%)3.9-6.42.1N/A-0.1Ourdownsidecaseof$37isbasedupon19xourROE(%)8.0-16.44.3N/A-1.4downsideCY18EEPSof$2.00,whichassumesadelayinnewproducttiming,lowerdefensespending,andBalancesheetandcashflow($mn)CAGRgreaterdifficultyintegratingtheacquisitions.Tangiblefixedassets9910434N/AN/AIntangiblefixedassetsN/AN/AN/AN/AN/AUpside/DownsidescenariosCashandequivalents333204318N/AN/ATotalassets1,1891,6291,723N/AN/AShortandlong-termdebt385555N/AN/AOtherlong-termliabilitiesN/AN/AN/AN/AN/ATotalliabilities726831845N/AN/ANetdebt/(funds)622717717N/AN/AShareholders"equity463798878N/AN/AChangeinworkingcapital208-15153N/AN/ACashflowfromoperations7993147N/AN/ACapitalexpenditure-31-33-33N/AN/AFreecashflow4760115N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)19.716.116.4N/A17.4EV/sales(x)5.14.23.8N/A4.3EV/EBITDA(adj)(x)28.522.515.9N/A22.3EquityFCFyield(%)2.32.54.5N/A3.1P/Sales(x)4.63.53.4N/A3.8P/BV(x)4.53.02.9N/A3.4Dividendyield(%)0.00.00.0N/A0.0Source:Companydata,BarclaysResearchNote:FYEndSep18October201753 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALQorvoInc.(QRVO)StockRating:EQUALWEIGHTIncomestatement($mn)2017A2018E2019E2020ECAGRPrice(17-Oct-2017)USD72.27Revenue3,0333,1093,375N/AN/APriceTargetUSD70.00EBITDA(adj)7918801,030N/AN/AWhyEqualWeight?WhilewerecognizeQRVOhasEBIT(adj)707827978N/AN/Amultiplewaystogaincontentandshare,weremainPre-taxincome(adj)647772922N/AN/Aonthesidelinesuntil(1)weseebetterevidenceofNetincome(adj)603707829N/AN/Aexecution,(2)progressonresolvingmarginissues,and(3)AAPLsupplychainismorestable.EPS(adj)($)4.575.396.42N/AN/ADilutedshares(mn)131.9131.1129.2N/AN/AUpsidecaseUSD80.00DPS($)0.000.000.00N/AN/AOurupsidecaseof$80isbasedupon12xourupsideCY18EEPSof$6.75,whichassumeshighercontentatMarginandreturndataAverageApple,furthergainsinRFmodules,continuedEBITDA(adj)margin(%)26.128.330.5N/A28.3strengthinBAWfilters,sharegainsand/orfurtherEBIT(adj)margin(%)23.326.629.0N/A26.3operatingandgrossmarginimprovement.Pre-tax(adj)margin(%)N/AN/AN/AN/AN/ANet(adj)margin(%)19.922.724.6N/A22.4DownsidecaseUSD55.00ROA(%)-0.31.12.7N/A1.2Ourdownsidecaseof$55isbasedupon11xourROE(%)-0.31.53.5N/A1.6downsideCY18EEPSof$5.00,whichassumesgreaterpricingpressure,andsharelossatAAPLand/orBalancesheetandcashflow($mn)CAGRSamsung.Tangiblefixedassets1,3921,3471,477N/AN/AIntangiblefixedassets3,5743,4403,440N/AN/AUpside/DownsidescenariosCashandequivalents5458671,348N/AN/ATotalassets6,5226,7127,310N/AN/AShortandlong-termdebt989989989N/AN/AOtherlong-termliabilities868989N/AN/ATotalliabilities1,6261,5781,602N/AN/ANetdebt/(funds)444123-359N/AN/AShareholders"equity4,8975,1345,708N/AN/AChangeinworkingcapital-93377444N/AN/ACashflowfromoperations7778131,002N/AN/ACapitalexpenditure-553-329-321N/AN/AFreecashflow224483682N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)15.813.411.3N/A13.5EV/sales(x)3.33.12.7N/A3.0EV/EBITDA(adj)(x)12.610.98.9N/A10.8EquityFCFyield(%)2.45.17.3N/A4.9P/Sales(x)3.13.12.8N/A3.0P/BV(x)1.91.81.6N/A1.8Dividendyield(%)0.00.00.0N/A0.0Netdebt/EBITDA(adj)(x)0.60.1N/AN/A0.4Source:Companydata,BarclaysResearchNote:FYEndMar18October201754 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALSiliconLaboratories,Inc.(SLAB)StockRating:EQUALWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD88.15Revenue698764825N/AN/APriceTargetUSD86.00EBITDA(adj)7987105N/AN/AWhyEqualWeight?SLABhasacompellingstrategyEBIT(adj)135151171N/AN/AforgrowthdrivenbyacompleteportfolioofIoTPre-taxincome(adj)133149169N/AN/AofferingsanddisruptiveInfrastructureproductswhichNetincome(adj)118133150N/AN/Ashouldcontinuerampingoverthenextseveralyears,butwiththestocknearalltimehighswelookforaEPS(adj)($)2.783.073.48N/AN/Abetterentrypoint.Dilutedshares(mn)424343N/AN/ADPS($)0.000.000.00N/AN/AUpsidecaseUSD94.00Ourupsidecaseof$94isbasedupon25xourupsideMarginandreturndataAverageCY18EEPSof$3.75,whichassumesgreaterrampofEBITDA(adj)margin(%)11.411.412.8N/A11.9IoT(MCU,Wireless,&Sensorproducts),Timing,andEBIT(adj)margin(%)19.419.820.7N/A20.0Automotiveproducts.Pre-tax(adj)margin(%)19.119.520.5N/A19.7Net(adj)margin(%)16.917.418.2N/A17.5DownsidecaseUSD76.00ROA(%)6.16.86.0N/A6.3Ourdownsidecaseof$76isbasedupon24xourROE(%)8.18.99.3N/A8.8downsideCY18EEPSof$3.20,whichassumesslowerrampofIoT(MCU,Wireless,&Sensorproducts),Balancesheetandcashflow($mn)CAGRTiming,andAutomotiveproductsandfasterdeclineTangiblefixedassets130130209N/AN/AofAccess.Intangiblefixedassets380385385N/AN/ACashandequivalents141278424N/AN/AUpside/DownsidescenariosTotalassets1,0821,5151,763N/AN/AShortandlong-termdebt73336336N/AN/AOtherlong-termliabilities434343N/AN/ATotalliabilities255530541N/AN/ANetdebt/(funds)-6958-88N/AN/AShareholders"equity8279861,222N/AN/AChangeinworkingcapital70431157N/AN/ACashflowfromoperations129156160N/AN/ACapitalexpenditure-11-16-14N/AN/AFreecashflow118140146N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)31.828.725.3N/A28.6EV/sales(x)5.45.14.5N/A5.0EV/EBITDA(adj)(x)47.044.335.3N/A42.2EquityFCFyield(%)3.23.73.8N/A3.6P/Sales(x)5.55.04.6N/A5.0P/BV(x)4.53.93.1N/A3.8Dividendyield(%)0.00.00.0N/A0.0Source:Companydata,BarclaysResearchNote:FYEndDec18October201755 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALSkyworksSolutions,Inc.(SWKS)StockRating:OVERWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD107.35Revenue3,2893,6484,041N/AN/APriceTargetUSD120.00EBITDA(adj)1,4451,5081,711N/AN/AWhyOverweight?Weliketherisk/rewardintonextEBIT(adj)1,2451,3761,573N/AN/Ayeargiven:(1)contentgainopportunities(morePre-taxincome(adj)1,2391,3801,578N/AN/Abands,PAMiDs,receivemodules);(2)furthermarginNetincome(adj)1,0691,1941,341N/AN/Aimprovements(53%GMtargetvs.current51%);(3)EPSleverage($8runratetarget);and(4)M&AEPS(adj)($)5.566.397.24N/AN/Aaccretion/diversificationopportunities($7-8/shareinDilutedshares(mn)192187185N/AN/Acashandnodebt).DPS($)1.061.161.28N/AN/AUpsidecaseUSD135.00MarginandreturndataAverageOurupsidecaseof$135isbasedupon17xourEBITDA(adj)margin(%)43.941.342.3N/A42.5upsideCY18EEPSof$8.00,whichassumesSkyworksEBIT(adj)margin(%)37.837.738.9N/A38.2seesbetterGMs,bettercontentatApple,and/orPre-tax(adj)margin(%)37.737.839.0N/A38.2accretionthroughM&A.Net(adj)margin(%)32.532.733.2N/A32.8ROA(%)25.925.925.4N/A25.7DownsidecaseUSD95.00ROE(%)30.428.228.1N/A28.9Ourdownsidecaseof$95isbasedupon16xourdownsideCY18EEPSof$6.00,whichassumesBalancesheetandcashflow($mn)CAGRSkyworksseessharelossatSamsung,lostcontentatTangiblefixedassets8068431,037N/AN/AAAPL,and/orifpricingbecomesincreasinglyIntangiblefixedassets940943943N/AN/Acompetitive.Cashandequivalents1,0841,5022,122N/AN/ATotalassets3,8554,4695,365N/AN/AUpside/DownsidescenariosShortandlong-termdebt000N/AN/AOtherlong-termliabilities104112112N/AN/ATotalliabilities314430453N/AN/ANetdebt/(funds)-1,084-1,502-2,122N/AN/AShareholders"equity3,5414,0394,912N/AN/AChangeinworkingcapital341475679N/AN/ACashflowfromoperations1,0961,2931,393N/AN/ACapitalexpenditure-190-273-235N/AN/AFreecashflow9061,0201,158N/AN/AValuationandleveragemetricsAverageP/E(adj)(x)19.316.814.8N/A17.0EV/sales(x)5.85.14.4N/A5.1EV/EBITDA(adj)(x)13.112.310.5N/A12.0EquityFCFyield(%)4.45.15.8N/A5.1P/Sales(x)6.15.55.0N/A5.5P/BV(x)5.85.04.0N/A4.9Dividendyield(%)1.01.11.2N/A1.1Source:Companydata,BarclaysResearchNote:FYEndSep18October201756 Barclays|U.S.SemiconductorsU.S.SemiconductorsIndustryView:NEUTRALTexasInstruments,Inc.(TXN)StockRating:EQUALWEIGHTIncomestatement($mn)2016A2017E2018E2019ECAGRPrice(17-Oct-2017)USD94.27Revenue13,37014,73215,329N/AN/APriceTargetUSD95.00EBITDA(adj)5,4206,3866,652N/AN/AWhyEqualWeight?WeapplaudthecontinuedEBIT(adj)5,1036,1846,522N/AN/Acommitmenttocapitalreturns,thefocusonPre-taxincome(adj)5,2346,2056,546N/AN/Aauto/industrial/catalogandshifttothe300mmNetincome(adj)3,6604,3314,582N/AN/Aanalogfabthatpresentsmarginimprovementopportunitiesinto2018.EPS(reported)($)3.364.184.40N/AN/ADilutedshares(mn)1,0171,012992N/AN/AUpsidecaseUSD105.00DPS($)1.642.002.00N/AN/AOurupsidecaseof$105isbasedupon21xourupsideCY18EPSof$5.00,whichassumessharegainsMarginandreturndataAverageinanalogandmeaningfulGMleveragecoupledwithEBITDA(adj)margin(%)40.543.343.4N/A42.4restructuringsavingsinopex.EBIT(adj)margin(%)38.242.042.5N/A40.9Pre-tax(adj)margin(%)39.142.142.7N/A41.3DownsidecaseUSD85.00Net(adj)margin(%)27.429.429.9N/A28.9Ourdownsidecaseof$85isbasedupon21xourROA(%)21.326.027.0N/A24.8downsideCY18EPSof$4.00,whichassumesslowerROE(%)34.840.841.5N/A39.1sharegainsandheadwindsfromexcesscapacity.Balancesheetandcashflow($mn)CAGRUpside/DownsidescenariosTangiblefixedassets2,5122,5632,721N/AN/AIntangiblefixedassets1,264939607N/AN/ACashandequivalents1,1541,2001,032N/AN/ATotalassets16,43116,32716,227N/AN/AShortandlong-termdebt3,6093,5833,583N/AN/AOtherlong-termliabilities554635635N/AN/ATotalliabilities5,9585,7195,764N/AN/ANetdebt/(funds)2,4552,3832,551N/AN/AShareholders"equity10,47310,60810,463N/AN/AChangeinworkingcapital6744607N/AN/ACashflowfromoperations4,4164,3815,021N/AN/ACapitalexpenditure-531-580-604N/AN/AFreecashflow3,8853,8014,417N/AN/AValuationandleveragemetricsAverageP/E(reported)(x)28.022.521.4N/A24.0EV/sales(x)7.36.76.4N/A6.8EV/EBITDA(adj)(x)18.115.414.8N/A16.1EquityFCFyield(%)4.14.04.7N/A4.3P/Sales(x)7.26.56.2N/A6.6P/BV(x)9.29.08.9N/A9.0Dividendyield(%)1.72.12.1N/A2.0Source:Companydata,BarclaysResearchNote:FYEndDec18October201757 Barclays|U.S.SemiconductorsValuationMethodologyandRisksU.S.SemiconductorsAnalogDevices(ADI)ValuationMethodology:Ourpricetargetof$90isbasedon18xourCY18EEPSof$4.91.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:Webelieveourforecastsandpricetargetcouldbeatriskforthefollowingreasons:demandforsemiconductorsslowsdown;pricingbecomesmoreaggressiveanddestabilizes;thecompanylosessharetoitscompetitors;slowerintegrationofLLTCacquisition.BroadcomLimited(AVGO)ValuationMethodology:Ourpricetargetof$300isbasedupon17xourCY18EEPSof$17.90.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:RiskstoourthesisincludefuturesharelossatApple,aslowerFBARramp,andreducedsynergiesfrompastM&A.CirrusLogicInc.(CRUS)ValuationMethodology:Ourpricetargetof$55isbasedupon13xourCY18EEPSof$4.13.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:1)Customerconcentration:CRUShasahighexposuretoAAPL(70-80%ofrevenue)andanydesignlosswouldmateriallyimpactestimates.WebelieveCRUShasgoodvisibilityintofuturedesignsasitdesignsnewchipsonroughlyatwo-yearcyclewithtechnologyroadmapextendingbeyondthat–i.e.,CRUSisalreadywellintothedevelopmentofthenexgenaudiosolutionforthe2017iPhone.2)MultipleCompression:Webelieveinvestorsmaycompressthemultipletheywillpayforacompanywithsuchhighcustomerexposuredespitethelikelysignificantincreaseearningspower.3)Declininghandsetunitvolumes,particularlyatthehighendofthemarket(e.g.AAPLandSamsung).CypressSemiconductorCorp.(CY)ValuationMethodology:Ourpricetargetof$18isbasedupon15xourCY18EPSof$1.24.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:RiskstoourthesisincludeslowergrowthordownturninIoT,fewerdesignwinsinUSB-C,slowerGM/utilizationimprovement,anddeclineinNORandSRAMmemory.IntegratedDeviceTechnology,Inc.(IDTI)ValuationMethodology:Ourpricetargetof$24isbasedupon17xourCY18EEPSof$1.45.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:Riskstoourthesisincludeafaster/slowerrampofnewproducts(wirelesscharging),morerapidgrowthinRapidIOandmemoryinterface,andless/moremarginleverage.M/A-COMTechnologySolutionsHoldings,Inc.(MTSI)ValuationMethodology:Ourpricetargetof$50isbasedupon19xourCY18EEPSof$2.69.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:Risksincludeslowernewproductramps,slowerrecoveryofOptical,less-than-expectedleverage,and/orslowdowninendmarkets.MaximIntegratedProducts(MXIM)ValuationMethodology:Ourpricetargetof$50isbasedupon20xourCY18EEPSof$2.49.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:Westillseethecompanyasasolidbusinessandapplaudthecostcuttingefforts,butcontinuedtoplinestrugglesleaveearningsessentiallyrunninginplace.WeremainonthesidelinespendingnewcatalyststodriverevenuegrowthorfurtheractionontheM&Afront.QorvoInc.(QRVO)ValuationMethodology:Ourpricetargetof$70isbasedupon11xourCY18EEPSof$6.43.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:Afailuretoimprovemargins,greaterpricingpressure,weaknessinChinasmartphones,andsharelossatAAPLand/orSamsung.SiliconLaboratories,Inc.(SLAB)ValuationMethodology:Ourpricetargetof$86isbasedupon25xourCY18EEPSof$3.48.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:RiskstoourthesisincludeASPandGMerosioninvideo,slower/fasterrampofitsgrowthproducts(IoT,timing,isolation,MCU,touch),andfaster/slowerfalloffofAccessproducts.SkyworksSolutions,Inc.(SWKS)ValuationMethodology:Ourpricetargetof$120isbasedupon16xourCY18EEPSof$7.51.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:RiskstoourthesisincludefuturesharelossatAAPLandfurthercompetitionintheRFspacepressuringASPsandmargins.TexasInstruments,Inc.(TXN)ValuationMethodology:Ourpricetargetof$95isbasedupon22xourCY18EPSof$4.40.RiskswhichMayImpedetheAchievementoftheBarclaysResearchValuationandPriceTarget:TIissusceptibletothecyclicalnatureofthesemiconductormarket,andinadownturnanylossescouldpotentiallybemagnifiedduetothesubstantialamountofcapacityTIhas.18October201758 Barclays|U.S.SemiconductorsValuationMethodologyandRisksSource:BarclaysResearch.18October201759 Barclays|U.S.SemiconductorsANALYST(S)CERTIFICATION(S):I,BlayneCurtis,herebycertify(1)thattheviewsexpressedinthisresearchreportaccuratelyreflectmypersonalviewsaboutanyorallofthesubjectsecuritiesorissuersreferredtointhisresearchreportand(2)nopartofmycompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendationsorviewsexpressedinthisresearchreport.IMPORTANTDISCLOSURESCONTINUEDBarclaysResearchisproducedbytheInvestmentBankofBarclaysBankPLCanditsaffiliates(collectivelyandeachindividually,"Barclays").AvailabilityofDisclosures:Whereanycompaniesarethesubjectofthisresearchreport,forcurrentimportantdisclosuresregardingthosecompaniespleaserefertohttps://publicresearch.barclays.comoralternativelysendawrittenrequestto:BarclaysResearchCompliance,745SeventhAvenue,13thFloor,NewYork,NY10019orcall+1-212-526-1072.Theanalystsresponsibleforpreparingthisresearchreporthavereceivedcompensationbaseduponvariousfactorsincludingthefirm"stotalrevenues,aportionofwhichisgeneratedbyinvestmentbankingactivities,theprofitabilityandrevenuesoftheMarketsbusinessandthepotentialinterestofthefirm"sinvestingclientsinresearchwithrespecttotheassetclasscoveredbytheanalyst.AllauthorscontributingtothisresearchreportareResearchAnalystsunlessotherwiseindicated.ThepublicationdateatthetopofthereportreflectsthelocaltimewherethereportwasproducedandmaydifferfromthereleasedateprovidedinGMT.Analystsregularlyconductsitevisitstoviewthematerialoperationsofcoveredcompanies,butBarclayspolicyprohibitsthemfromacceptingpaymentorreimbursementbyanycoveredcompanyoftheirtravelexpensesforsuchvisits.InordertoaccessBarclaysStatementregardingResearchDisseminationPoliciesandProcedures,pleaserefertohttps://publicresearch.barcap.com/static/S_ResearchDissemination.html.InordertoaccessBarclaysResearchConflictManagementPolicyStatement,pleasereferto:https://publicresearch.barcap.com/static/S_ConflictManagement.html.BarclaysResearchDepartmentproducesvarioustypesofresearchincluding,butnotlimitedto,fundamentalanalysis,equity-linkedanalysis,quantitativeanalysis,andtradeideas.RecommendationscontainedinonetypeofBarclaysResearchmaydifferfromthosecontainedinothertypesofBarclaysResearch,whetherasaresultofdifferingtimehorizons,methodologies,orotherwise.TheBarclaysResearchDepartmentoperatesindependentlyfromtheAbsaResearchDepartment.AbsaResearchisproducedbyAbsaBankLimitedactingthroughitsCorporateandInvestmentBankdivision,whichisapartofBarclaysAfricaGroupLimitedandaffiliatedwiththeInvestmentBankofBarclaysBankPLC.Eligibleclientsmayreceiveresearchreportsfrombothresearchdepartments,whichmayreachdifferentconclusionsandmaycontaindifferentandconflictingforecasts,recommendations,ortradeideas.PrimaryStocks(Ticker,Date,Price)AnalogDevices(ADI,17-Oct-2017,USD88.94),EqualWeight/Neutral,CD/CE/J/K/MBroadcomLimited(AVGO,17-Oct-2017,USD242.62),Overweight/Neutral,A/CE/D/E/J/LOtherMaterialConflicts:BarclaysBankand/oritsaffiliateisprovidinginvestmentbankingservicestoBroadcomLimited(NASDAQ:AVGO)inrelationtotheirpotentialacquisitionofBrocadeCommunicationSystems,Inc(NASDAQ:BRCD).Therating,pricetarget,andestimates(asapplicable)onBroadcomLimitedpreviouslyissuedbytheFirm’sResearchdepartmentdonotincorporatethispotentialtransaction.CirrusLogicInc.(CRUS,17-Oct-2017,USD54.83),Underweight/Neutral,CE/J/K/MCypressSemiconductorCorp.(CY,17-Oct-2017,USD15.86),Overweight/Neutral,CD/CE/D/J/K/L/M/NIntegratedDeviceTechnology,Inc.(IDTI,17-Oct-2017,USD28.01),Underweight/Neutral,CD/CE/JM/A-COMTechnologySolutionsHoldings,Inc.(MTSI,17-Oct-2017,USD37.70),Overweight/Neutral,CE/D/J/K/L/MMaximIntegratedProducts(MXIM,17-Oct-2017,USD49.86),EqualWeight/Neutral,A/CD/CE/D/J/K/L/MQorvoInc.(QRVO,17-Oct-2017,USD72.27),EqualWeight/Neutral,CD/CE/JSiliconLaboratories,Inc.(SLAB,17-Oct-2017,USD88.15),EqualWeight/Neutral,CD/CE/E/J/LSkyworksSolutions,Inc.(SWKS,17-Oct-2017,USD107.35),Overweight/Neutral,CE/JTexasInstruments,Inc.(TXN,17-Oct-2017,USD94.27),EqualWeight/Neutral,A/CD/CE/D/J/K/L/M/NMateriallyMentionedStocks(Ticker,Date,Price)AdvancedMicroDevices(AMD,17-Oct-2017,USD14.16),Underweight/Neutral,CD/CE/D/E/FA/J/K/L/MCaviumInc.(CAVM,17-Oct-2017,USD69.46),Overweight/Neutral,CE/JIntelCorp.(INTC,17-Oct-2017,USD39.79),Overweight/Neutral,CD/CE/J/K/M/NMarvellTechnologyGroup,Ltd.(MRVL,17-Oct-2017,USD18.36),EqualWeight/Neutral,CE/FA/J/K/MMicronTechnology,Inc.(MU,17-Oct-2017,USD40.39),Overweight/Neutral,CD/CE/FA/FC/JNVIDIACorp.(NVDA,17-Oct-2017,USD197.75),EqualWeight/Neutral,CD/CE/D/J/K/L/MQuantennaCommunications,Inc.(QTNA,17-Oct-2017,USD16.55),Overweight/Neutral,A/CE/D/J/L18October201760 Barclays|U.S.SemiconductorsIMPORTANTDISCLOSURESCONTINUEDXilinx,Inc.(XLNX,17-Oct-2017,USD72.37),EqualWeight/Neutral,A/CD/CE/D/J/K/L/MPricesaresourcedfromThomsonReutersasofthelastavailableclosingpriceintherelevanttradingmarket.DisclosureLegend:A:BarclaysBankPLCand/oranaffiliatehasbeenleadmanagerorco-leadmanagerofapubliclydisclosedofferofsecuritiesoftheissuerintheprevious12months.B:Anemployeeornon-executivedirectorofBarclaysBankPLCand/oranaffiliateisadirectorofthisissuer.CD:BarclaysBankPLCand/oranaffiliateisamarket-makerindebtsecuritiesissuedbythisissuer.CE:BarclaysBankPLCand/oranaffiliateisamarket-makerinequitysecuritiesissuedbythisissuer.D:BarclaysBankPLCand/oranaffiliatehasreceivedcompensationforinvestmentbankingservicesfromthisissuerinthepast12months.E:BarclaysBankPLCand/oranaffiliateexpectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesfromthisissuerwithinthenext3months.FA:BarclaysBankPLCand/oranaffiliatebeneficiallyowns1%ormoreofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithUSregulations.FB:BarclaysBankPLCand/oranaffiliatebeneficiallyownsalongpositionofmorethan0.5%ofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithEUregulations.FC:BarclaysBankPLCand/oranaffiliatebeneficiallyownsashortpositionofmorethan0.5%ofaclassofequitysecuritiesofthisissuer,ascalculatedinaccordancewithEUregulations.GD:Oneoftheanalystsonthefundamentalcreditcoverageteam(oramemberofhisorherhousehold)hasafinancialinterestinthedebtorequitysecuritiesofthisissuer.GE:Oneoftheanalystsonthefundamentalequitycoverageteam(oramemberofhisorherhousehold)hasafinancialinterestinthedebtorequitysecuritiesofthisissuer.H:Thisissuerbeneficiallyownsmorethan5%ofanyclassofcommonequitysecuritiesofBarclaysPLC.I:BarclaysBankPLCand/oranaffiliateispartytoanagreementwiththisissuerfortheprovisionoffinancialservicestoBarclaysBankPLCand/oranaffiliate.J:BarclaysBankPLCand/oranaffiliateisaliquidityproviderand/ortradesregularlyinthesecuritiesofthisissuerand/orinanyrelatedderivatives.K:BarclaysBankPLCand/oranaffiliatehasreceivednon-investmentbankingrelatedcompensation(includingcompensationforbrokerageservices,ifapplicable)fromthisissuerwithinthepast12months.L:Thisissueris,orduringthepast12monthshasbeen,aninvestmentbankingclientofBarclaysBankPLCand/oranaffiliate.M:Thisissueris,orduringthepast12monthshasbeen,anon-investmentbankingclient(securitiesrelatedservices)ofBarclaysBankPLCand/oranaffiliate.N:Thisissueris,orduringthepast12monthshasbeen,anon-investmentbankingclient(non-securitiesrelatedservices)ofBarclaysBankPLCand/oranaffiliate.O:Notinuse.P:Apartner,directororofficerofBarclaysCapitalCanadaInc.has,duringthepreceding12months,providedservicestothesubjectcompanyforremuneration,otherthannormalcourseinvestmentadvisoryortradeexecutionservices.Q:BarclaysBankPLCand/oranaffiliateisaCorporateBrokertothisissuer.R:BarclaysCapitalCanadaInc.and/oranaffiliatehasreceivedcompensationforinvestmentbankingservicesfromthisissuerinthepast12months.S:ThisissuerisaCorporateBrokertoBarclaysPLC.T:BarclaysBankPLCand/oranaffiliateisprovidingequityadvisoryservicestothisissuer.U:TheequitysecuritiesofthisCanadianissuerincludesubordinatevotingrestrictedshares.V:TheequitysecuritiesofthisCanadianissuerincludenon-votingrestrictedshares.RiskDisclosure(s)Masterlimitedpartnerships(MLPs)arepass-throughentitiesstructuredaspubliclylistedpartnerships.Fortaxpurposes,distributionstoMLPunitholdersmaybetreatedasareturnofprincipal.InvestorsshouldconsulttheirowntaxadvisorsbeforeinvestinginMLPunits.GuidetotheBarclaysFundamentalEquityResearchRatingSystem:OurcoverageanalystsusearelativeratingsysteminwhichtheyratestocksasOverweight,EqualWeightorUnderweight(seedefinitionsbelow)relativetoothercompaniescoveredbytheanalystorateamofanalyststhataredeemedtobeinthesameindustry(the"industrycoverageuniverse").Inadditiontothestockrating,weprovideindustryviewswhichratetheoutlookfortheindustrycoverageuniverseasPositive,NeutralorNegative(seedefinitionsbelow).Aratingsystemusingtermssuchasbuy,holdandsellisnottheequivalentofourratingsystem.Investors18October201761 Barclays|U.S.SemiconductorsIMPORTANTDISCLOSURESCONTINUEDshouldcarefullyreadtheentireresearchreportincludingthedefinitionsofallratingsandnotinferitscontentsfromratingsalone.StockRatingOverweight-Thestockisexpectedtooutperformtheunweightedexpectedtotalreturnoftheindustrycoverageuniverseovera12-monthinvestmenthorizon.EqualWeight-Thestockisexpectedtoperforminlinewiththeunweightedexpectedtotalreturnoftheindustrycoverageuniverseovera12-monthinvestmenthorizon.Underweight-Thestockisexpectedtounderperformtheunweightedexpectedtotalreturnoftheindustrycoverageuniverseovera12-monthinvestmenthorizon.RatingSuspended-Theratingandtargetpricehavebeensuspendedtemporarilyduetomarketeventsthatmadecoverageimpracticableortocomplywithapplicableregulationsand/orfirmpoliciesincertaincircumstancesincludingwheretheInvestmentBankofBarclaysBankPLCisactinginanadvisorycapacityinamergerorstrategictransactioninvolvingthecompany.IndustryViewPositive-industrycoverageuniversefundamentals/valuationsareimproving.Neutral-industrycoverageuniversefundamentals/valuationsaresteady,neitherimprovingnordeteriorating.Negative-industrycoverageuniversefundamentals/valuationsaredeteriorating.Belowisthelistofcompaniesthatconstitutethe"industrycoverageuniverse":U.S.SemiconductorsAdvancedMicroDevices(AMD)AnalogDevices(ADI)BroadcomLimited(AVGO)CaviumInc.(CAVM)CirrusLogicInc.(CRUS)CypressSemiconductorCorp.(CY)IntegratedDeviceTechnology,Inc.(IDTI)IntelCorp.(INTC)M/A-COMTechnologySolutionsHoldings,Inc.(MTSI)MagnaChipSemiconductor(MX)MarvellTechnologyGroup,Ltd.(MRVL)MaximIntegratedProducts(MXIM)MicronTechnology,Inc.(MU)NVIDIACorp.(NVDA)NXPSemiconductorsNV(NXPI)QorvoInc.(QRVO)QUALCOMM,Inc.(QCOM)QuantennaCommunications,Inc.(QTNA)SiliconLaboratories,Inc.(SLAB)SkyworksSolutions,Inc.(SWKS)SmartGlobalHoldings,Inc.(SGH)TexasInstruments,Inc.(TXN)Xilinx,Inc.(XLNX)DistributionofRatings:BarclaysEquityResearchhas1603companiesundercoverage.42%havebeenassignedanOverweightratingwhich,forpurposesofmandatoryregulatorydisclosures,isclassifiedasaBuyrating;59%ofcompanieswiththisratingareinvestmentbankingclientsoftheFirm;77%oftheissuerswiththisratinghavereceivedfinancialservicesfromtheFirm.41%havebeenassignedanEqualWeightratingwhich,forpurposesofmandatoryregulatorydisclosures,isclassifiedasaHoldrating;50%ofcompanieswiththisratingareinvestmentbankingclientsoftheFirm;71%oftheissuerswiththisratinghavereceivedfinancialservicesfromtheFirm.15%havebeenassignedanUnderweightratingwhich,forpurposesofmandatoryregulatorydisclosures,isclassifiedasaSellrating;39%ofcompanieswiththisratingareinvestmentbankingclientsoftheFirm;62%oftheissuerswiththisratinghavereceivedfinancialservicesfromtheFirm.GuidetotheBarclaysResearchPriceTarget:Eachanalysthasasinglepricetargetonthestocksthattheycover.Thepricetargetrepresentsthatanalyst"sexpectationofwherethestockwilltradeinthenext12months.Upside/downsidescenarios,whereprovided,representpotentialupside/potentialdownsidetoeachanalyst"spricetargetoverthesame12-monthperiod.TopPicks:BarclaysEquityResearch"s"TopPicks"representthesinglebestalpha-generatinginvestmentideawithineachindustry(asdefinedbytherelevant"industrycoverageuniverse"),takenfromamongtheOverweight-ratedstockswithinthatindustry.BarclaysEquityResearchpublishes"TopPicks"reportseveryquarterandanalystsmayalsopublishintra-quarterchangestotheirTopPicks,asnecessary.WhileanalystsmayhighlightotherOverweight-ratedstocksintheirpublishedresearchinadditiontotheirTopPick,therecanonlybeone"TopPick"foreachindustry.ToviewthecurrentlistofTopPicks,gototheTopPickspageonBarclaysLive(https://live.barcap.com/go/keyword/TopPicks).Toseealistofcompaniesthatcompriseaparticularindustrycoverageuniverse,pleasegotohttps://publicresearch.barclays.com.ExplanationofothertypesofinvestmentrecommendationsproducedbyBarclaysEquityResearch:Tradeideas,thematicscreensorportfoliorecommendationscontainedhereinthathavebeenproducedbyanalystswithinEquityResearchshallremainopenuntiltheyaresubsequentlyamendedorclosedinafutureresearchreport.DisclosureofpreviousinvestmentrecommendationsproducedbyBarclaysEquityResearch:18October201762 Barclays|U.S.SemiconductorsIMPORTANTDISCLOSURESCONTINUEDBarclaysEquityResearchmayhavepublishedotherinvestmentrecommendationsinrespectofthesamesecurities/instrumentsrecommendedinthisresearchreportduringthepreceding12months.ToviewpreviousinvestmentrecommendationspublishedbyBarclaysEquityResearchinthepreceding12monthspleaserefertohttps://live.barcap.com/go/research/ResearchInvestmentRecommendations.LegalentitiesinvolvedinproducingBarclaysResearch:BarclaysBankPLC(Barclays,UK)BarclaysCapitalInc.(BCI,US)BarclaysSecuritiesJapanLimited(BSJL,Japan)BarclaysBankPLC,HongKongbranch(BarclaysBank,HongKong)BarclaysCapitalCanadaInc.(BCCI,Canada)BarclaysBankMexico,S.A.(BBMX,Mexico)BarclaysSecurities(India)PrivateLimited(BSIPL,India)BarclaysBankPLC,Indiabranch(BarclaysBank,India)BarclaysBankPLC,Singaporebranch(BarclaysBank,Singapore)18October201763 DISCLAIMER:ThispublicationhasbeenproducedbyBarclaysResearchDepartmentintheInvestmentBankofBarclaysBankPLCand/oroneormoreofitsaffiliates(collectivelyandeachindividually,"Barclays").IthasbeendistributedbyoneormoreBarclaysaffiliatedlegalentitieslistedbelow.Itisprovidedtoourclientsforinformationpurposesonly,andBarclaysmakesnoexpressorimpliedwarranties,andexpresslydisclaimsallwarrantiesofmerchantabilityorfitnessforaparticularpurposeorusewithrespecttoanydataincludedinthispublication.TotheextentthatthispublicationstatesonthefrontpagethatitisintendedforinstitutionalinvestorsandisnotsubjecttoalloftheindependenceanddisclosurestandardsapplicabletodebtresearchreportspreparedforretailinvestorsunderU.S.FINRARule2242,itisan“institutionaldebtresearchreport”anddistributiontoretailinvestorsisstrictlyprohibited.Barclaysalsodistributessuchinstitutionaldebtresearchreportstovariousissuers,regulatoryandacademicorganisationsforinformationalpurposesandnotforthepurposeofmakinginvestmentdecisionsregardinganydebtsecurities.AnysuchrecipientsthatdonotwanttocontinuereceivingBarclaysinstitutionaldebtresearchreportsshouldcontactdebtresearch@barclays.com.Barclayswillnottreatunauthorizedrecipientsofthisreportasitsclientsandacceptsnoliabilityforusebythemofthecontentswhichmaynotbesuitablefortheirpersonaluse.PricesshownareindicativeandBarclaysisnotofferingtobuyorsellorsolicitingofferstobuyorsellanyfinancialinstrument.Withoutlimitinganyoftheforegoingandtotheextentpermittedbylaw,innoeventshallBarclays,noranyaffiliate,noranyoftheirrespectiveofficers,directors,partners,oremployeeshaveanyliabilityfor(a)anyspecial,punitive,indirect,orconsequentialdamages;or(b)anylostprofits,lostrevenue,lossofanticipatedsavingsorlossofopportunityorotherfinancialloss,evenifnotifiedofthepossibilityofsuchdamages,arisingfromanyuseofthispublicationoritscontents.OtherthandisclosuresrelatingtoBarclays,theinformationcontainedinthispublicationhasbeenobtainedfromsourcesthatBarclaysResearchbelievestobereliable,butBarclaysdoesnotrepresentorwarrantthatitisaccurateorcomplete.Barclaysisnotresponsiblefor,andmakesnowarrantieswhatsoeverasto,theinformationoropinionscontainedinanywritten,electronic,audioorvideopresentationsofthirdpartiesthatareaccessibleviaadirecthyperlinkinthispublicationorviaahyperlinktoathird-partywebsite(‘Third-PartyContent’).AnysuchThird-PartyContenthasnotbeenadoptedorendorsedbyBarclays,doesnotrepresenttheviewsoropinionsofBarclays,andisnotincorporatedbyreferenceintothispublication.Third-PartyContentisprovidedforinformationpurposesonlyandBarclayshasnotindependentlyverifieditsaccuracyorcompleteness.Theviewsinthispublicationaresolelyandexclusivelythoseoftheauthoringanalyst(s)andaresubjecttochange,andBarclaysResearchhasnoobligationtoupdateitsopinionsortheinformationinthispublication.Ifthispublicationcontainsrecommendations,theyaregeneralrecommendationsthatwerepreparedindependentlyofanyotherinterests,includingthoseofBarclaysand/oritsaffiliates.Thispublicationdoesnotcontainpersonalinvestmentrecommendationsorinvestmentadviceortakeintoaccounttheindividualfinancialcircumstancesorinvestmentobjectivesoftheclientswhoreceiveit.Thesecuritiesandotherinvestmentsdiscussedhereinmaynotbesuitableforallinvestors.Barclaysisnotafiduciarytoanyrecipientofthispublication.Investorsmustindependentlyevaluatethemeritsandrisksoftheinvestmentsdiscussedherein,consultanyindependentadvisorstheybelievenecessary,andexerciseindependentjudgmentwithregardtoanyinvestmentdecision.Thevalueofandincomefromanyinvestmentmayfluctuatefromdaytodayasaresultofchangesinrelevanteconomicmarkets(includingchangesinmarketliquidity).Theinformationhereinisnotintendedtopredictactualresults,whichmaydiffersubstantiallyfromthosereflected.Pastperformanceisnotnecessarilyindicativeoffutureresults.Thisdocumentisbeingdistributed(1)onlybyorwiththeapprovalofanauthorisedperson(BarclaysBankPLC)or(2)to,andisdirectedat(a)personsintheUnitedKingdomhavingprofessionalexperienceinmattersrelatingtoinvestmentsandwhofallwithinthedefinitionof"investmentprofessionals"inArticle19(5)oftheFinancialServicesandMarketsAct2000(FinancialPromotion)Order2005(the"Order");or(b)highnetworthcompanies,unincorporatedassociationsandpartnershipsandtrusteesofhighvaluetrustsasdescribedinArticle49(2)oftheOrder;or(c)otherpersonstowhomitmayotherwiselawfullybecommunicated(allsuchpersonsbeing"RelevantPersons").AnyinvestmentorinvestmentactivitytowhichthiscommunicationrelatesisonlyavailabletoandwillonlybeengagedinwithRelevantPersons.Anyotherpersonswhoreceivethiscommunicationshouldnotrelyonoractuponit.BarclaysBankPLCisauthorisedbythePrudentialRegulationAuthorityandregulatedbytheFinancialConductAuthorityandthePrudentialRegulationAuthorityandisamemberoftheLondonStockExchange.TheInvestmentBankofBarclaysBankPLCundertakesU.S.securitiesbusinessinthenameofitswhollyownedsubsidiaryBarclaysCapitalInc.,aFINRAandSIPCmember.BarclaysCapitalInc.,aU.S.registeredbroker/dealer,isdistributingthismaterialintheUnitedStatesand,inconnectiontherewithacceptsresponsibilityforitscontents.AnyU.S.personwishingtoeffectatransactioninanysecuritydiscussedhereinshoulddosoonlybycontactingarepresentativeofBarclaysCapitalInc.intheU.S.at745SeventhAvenue,NewYork,NewYork10019.Non-U.S.personsshouldcontactandexecutetransactionsthroughaBarclaysBankPLCbranchoraffiliateintheirhomejurisdictionunlesslocalregulationspermitotherwise.BarclaysBankPLC,ParisBranch(registeredinFranceunderParisRCSnumber381066281)isregulatedbytheAutoritédesmarchésfinanciersandtheAutoritédecontrôleprudentiel.Registeredoffice34/36AvenuedeFriedland75008Paris.ThismaterialisdistributedinCanadabyBarclaysCapitalCanadaInc.,aregisteredinvestmentdealer,aDealerMemberofIIROC(www.iiroc.ca),andaMemberoftheCanadianInvestorProtectionFund(CIPF).Subjecttotheconditionsofthispublicationassetoutabove,AbsaBankLimited,actingthroughitsCorporateandInvestmentBankdivision,whichisapartofBarclaysAfricaGroupLimitedandaffiliatedwiththeInvestmentBankofBarclaysBankPLC,anauthorisedfinancialservicesprovider(RegistrationNo.:1986/004794/06.RegisteredCreditProviderRegNoNCRCP7),isdistributingthismaterialinSouthAfrica.AbsaBankLimitedisregulatedbytheSouthAfricanReserveBank.Thispublicationisnot,norisitintendedtobe,adviceasdefinedand/orcontemplatedinthe(SouthAfrican)FinancialAdvisoryandIntermediaryServicesAct,37of2002,oranyotherfinancial,investment,trading,tax,legal,accounting,retirement,actuarialorotherprofessionaladviceorservicewhatsoever.AnySouthAfricanpersonorentitywishingtoeffectatransactioninanysecuritydiscussedhereinshoulddosoonlybycontactingarepresentativeofAbsaBankLimitedactingthroughitsCorporateandInvestmentBankdivisioninSouthAfrica,7thFloor,BarclaysTowersWest,15TroyeStreet,Johannesburg.AbsaBankLimitedisanaffiliateoftheBarclaysgroup.AllBarclaysresearchreportsaredistributedtoinstitutionalinvestorsinJapanbyBarclaysSecuritiesJapanLimited.BarclaysSecuritiesJapanLimitedisajoint-stockcompanyincorporatedinJapanwithregisteredofficeof6-10-1Roppongi,Minato-ku,Tokyo106-6131,Japan.ItisasubsidiaryofBarclaysBankPLCandaregisteredfinancialinstrumentsfirmregulatedbytheFinancialServicesAgencyofJapan.RegisteredNumber:KantoZaimukyokucho(kinsho)No.143.BarclaysBankPLC,HongKongBranchisdistributingthismaterialinHongKongasanauthorisedinstitutionregulatedbytheHongKongMonetaryAuthority.RegisteredOffice:41/F,CheungKongCenter,2Queen"sRoadCentral,HongKong.AllIndiansecurities-relatedresearchandotherequityresearchproducedbyBarclays’InvestmentBankaredistributedinIndiabyBarclaysSecurities(India)PrivateLimited(BSIPL).BSIPLisacompanyincorporatedundertheCompaniesAct,1956havingCINU67120MH2006PTC161063.BSIPLisregisteredand regulatedbytheSecuritiesandExchangeBoardofIndia(SEBI)asaResearchAnalyst:INH000001519;PortfolioManagerINP000002585;StockBroker/TradingandClearingMember:NationalStockExchangeofIndiaLimited(NSE)CapitalMarketINB231292732,NSEFutures&OptionsINF231292732,NSECurrencyderivativesINE231450334,BombayStockExchangeLimited(BSE)CapitalMarketINB011292738,BSEFutures&OptionsINF011292738;DepositoryParticipant(DP)withtheNationalSecurities&DepositoriesLimited(NSDL):DPID:IN-DP-NSDL-299-2008;InvestmentAdviser:INA000000391.TheregisteredofficeofBSIPLisat208,CeejayHouse,ShivsagarEstate,Dr.A.BesantRoad,Worli,Mumbai–400018,India.TelephoneNo:+912267196000.Faxnumber:+912267196100.AnyotherreportsproducedbyBarclays’InvestmentBankaredistributedinIndiabyBarclaysBankPLC,IndiaBranch,anassociateofBSIPLinIndiathatisregisteredwithReserveBankofIndia(RBI)asaBankingCompanyundertheprovisionsofTheBankingRegulationAct,1949(RegnNoBOM43)andregisteredwithSEBIasMerchantBanker(RegnNoINM000002129)andalsoasBankertotheIssue(RegnNoINBI00000950).BarclaysInvestmentsandLoans(India)Limited,registeredwithRBIasNonBankingFinancialCompany(RegnNoRBICoR-07-00258),andBarclaysWealthTrustees(India)PrivateLimited,registeredwithRegistrarofCompanies(CINU93000MH2008PTC188438),areassociatesofBSIPLinIndiathatarenotauthorisedtodistributeanyreportsproducedbyBarclays’InvestmentBank.BarclaysBankPLCFrankfurtBranchdistributesthismaterialinGermanyunderthesupervisionofBundesanstaltfürFinanzdienstleistungsaufsicht(BaFin).ThismaterialisdistributedinMexicobyBarclaysBankMexico,S.A.NothinghereinshouldbeconsideredinvestmentadviceasdefinedintheIsraeliRegulationofInvestmentAdvisory,InvestmentMarketingandPortfolioManagementLaw,1995(“AdvisoryLaw”).Thisdocumentisbeingmadetoeligibleclients(asdefinedundertheAdvisoryLaw)only.BarclaysIsraelibranchpreviouslyheldaninvestmentmarketinglicensewiththeIsraelSecuritiesAuthoritybutitcancelledsuchlicenseon30/11/2014asitsolelyprovidesitsservicestoeligibleclientspursuanttoavailableexemptionsundertheAdvisoryLaw,thereforealicensewiththeIsraelSecuritiesAuthorityisnotrequired.Accordingly,BarclaysdoesnotmaintainaninsurancecoveragepursuanttotheAdvisoryLaw.BarclaysBankPLCintheDubaiInternationalFinancialCentre(RegisteredNo.0060)isregulatedbytheDubaiFinancialServicesAuthority(DFSA).PrincipalplaceofbusinessintheDubaiInternationalFinancialCentre:TheGateVillage,Building4,Level4,POBox506504,Dubai,UnitedArabEmirates.BarclaysBankPLC-DIFCBranch,mayonlyundertakethefinancialservicesactivitiesthatfallwithinthescopeofitsexistingDFSAlicence.RelatedfinancialproductsorservicesareonlyavailabletoProfessionalClients,asdefinedbytheDubaiFinancialServicesAuthority.BarclaysBankPLCintheUAEisregulatedbytheCentralBankoftheUAEandislicensedtoconductbusinessactivitiesasabranchofacommercialbankincorporatedoutsidetheUAEinDubai(LicenceNo.:13/1844/2008,RegisteredOffice:BuildingNo.6,BurjDubaiBusinessHub,SheikhZayedRoad,DubaiCity)andAbuDhabi(LicenceNo.:13/952/2008,RegisteredOffice:AlJaziraTowers,HamdanStreet,POBox2734,AbuDhabi).BarclaysBankPLCintheQatarFinancialCentre(RegisteredNo.00018)isauthorisedbytheQatarFinancialCentreRegulatoryAuthority(QFCRA).BarclaysBankPLC-QFCBranchmayonlyundertaketheregulatedactivitiesthatfallwithinthescopeofitsexistingQFCRAlicence.PrincipalplaceofbusinessinQatar:QatarFinancialCentre,Office1002,10thFloor,QFCTower,DiplomaticArea,WestBay,POBox15891,Doha,Qatar.RelatedfinancialproductsorservicesareonlyavailabletoBusinessCustomersasdefinedbytheQatarFinancialCentreRegulatoryAuthority.ThismaterialisdistributedintheUAE(includingtheDubaiInternationalFinancialCentre)andQatarbyBarclaysBankPLC.ThismaterialisnotintendedforinvestorswhoarenotQualifiedInvestorsaccordingtothelawsoftheRussianFederationasitmightcontaininformationaboutordescriptionofthefeaturesoffinancialinstrumentsnotadmittedforpublicofferingand/orcirculationintheRussianFederationandthusnoteligiblefornon-QualifiedInvestors.IfyouarenotaQualifiedInvestoraccordingtothelawsoftheRussianFederation,pleasedisposeofanycopyofthismaterialinyourpossession.ThismaterialisdistributedinSingaporebytheSingaporebranchofBarclaysBankPLC,abanklicensedinSingaporebytheMonetaryAuthorityofSingapore.Formattersinconnectionwiththisreport,recipientsinSingaporemaycontacttheSingaporebranchofBarclaysBankPLC,whoseregisteredaddressis10MarinaBoulevard,#23-01MarinaBayFinancialCentreTower2,Singapore018983.ThismaterialisdistributedtopersonsinAustraliabyeitherBarclaysBankplc,BarclaysCapitalInc.,BarclaysCapitalSecuritiesLimitedorBarclaysCapitalAsiaLimited.NoneofBarclaysBankplc,noranyoftheotherreferencedBarclaysgroupentities,holdanAustralianfinancialserviceslicenceandinsteadtheyeachrelyonanexemptionfromtherequirementtoholdsuchalicence.Thismaterialisintendedtoonlybedistributedto“wholesaleclients”asdefinedbytheAustralianCorporationsAct2001.IRSCircular230PreparedMaterialsDisclaimer:Barclaysdoesnotprovidetaxadviceandnothingcontainedhereinshouldbeconstruedtobetaxadvice.PleasebeadvisedthatanydiscussionofU.S.taxmatterscontainedherein(includinganyattachments)(i)isnotintendedorwrittentobeused,andcannotbeused,byyouforthepurposeofavoidingU.S.tax-relatedpenalties;and(ii)waswrittentosupportthepromotionormarketingofthetransactionsorothermattersaddressedherein.Accordingly,youshouldseekadvicebasedonyourparticularcircumstancesfromanindependenttaxadvisor.©CopyrightBarclaysBankPLC(2017).Allrightsreserved.NopartofthispublicationmaybereproducedorredistributedinanymannerwithoutthepriorwrittenpermissionofBarclays.BarclaysBankPLCisregisteredinEnglandNo.1026167.Registeredoffice1ChurchillPlace,London,E145HP.Additionalinformationregardingthispublicationwillbefurnisheduponrequest. BARCRES-63852b76'