--- the subscriber area has no ads and those above are not selected or endorsed by this site ---

Akoustis Foundry Services and semiconductor update +4

14:49 16-Jun-23

Rumors have been flying that Intel will reach a deal with Germany over the weekend after all, and an assembly & testing plant in Poland could be supporting evidence.  However the 2027 timing of the latter is not auspicious, and I'll be waiting on the terms, which are likely to include profit sharing, just as in America.  My take is that Intel is still not competing effectively.  I'm also inclined to deprecate any ARM IPO investment as incumbent competition is fierce in the innovation and production cost races.

Akoustis has launched 150mm RF MEMS silicon foundry and engineering services which will allow customers to design their own  custom chips including the companies BAW filters.  This should help expand the customer base beyond WiFi and 5G to higher margin defense and automotive products.  Two PDKs (process design kits) are being offered to support such customers.  XB1 covers 1.6 to 7 GHz, and will probably see the most use in the near term.  The XB3F hints at Akoustis next generation technology and is expected to cover frequencies from 7 to 20 GHz.  Of course, both press the now obligatory AI-assisted buzzword button, but that's actually useful and standard in this particular case.

AKTS is down nearly 7% in initial pre-market trading, which appears indicative but probably just due to caution ahead of CPI.  However,  the tight UK labor market may also be a factor if we continue to consider the Brits as forerunners to the Americans.  That would be particularly troublesome for an expanding company like Akoustis, but tere have been very limited opportunities to add the stock below the $2.75 placement price that I favored.  Whether or not I give in to the temptation to buy more below $3 on this news will depend heavily on the updated macro outlook coming with CPI at 8:30.  It will also depend on whether 5G investment proceeds or collapses in the face of faltering competition.  My view continues to be that there are limited reasons for companies to use 5G when they can just use WiFi, which puts the incumbents that have paid through the nose for spectrum in trouble.

Elsewhere in semiconductors, Himax has rebounded to levels that I would no longer chase ahead of the ex-dividend date at the end of the month.  However, the push toward automation with sensors is gathering steam which still benefits HIMX over the long term.  This will lead toward further integration in chips, which is trouble for Intel's x86 legacy franchise.  The market may not be realizing that, but Intel seems to, as it seeks to become an anchor investor for Arm's IPO in the wake of failed negotiations for its German high tech fab.  I note that its competition has succeeded in the lower end fabrication that I favor, and that non-domestic production should continue to be an option.

Topics:

• none