Post by Admin on May 2, 2016 10:09:23 GMT -5
The earnings call, while on-target, had weak guidance going forward. So, what I did was take the average analyst estimates and come up with projections using a sigmoid curve (below):
There are one or two things that are problematic here.
One is that if AMCC is still a front-runner in the ARM server market, and that market will be $5B by 2020, then AMCC's top line should be one hell of a lot larger. In fact, from the extrapolation, this argues for an ARM server market that is about $0.7B, and not the forecast $5B proposed by ARM.
Another possibility is that the other ARM competitors are selling more than AMCC presently, and this is responsible for the weakness. This seems unlikely, as CAVM had a fairly sketchy earnings call as well. ...speaking of CAVM...
I noticed in the Linley white paper (figure 1) that Thunder-X acquits itself rather well relative to X-Genes 1 and 2. The only problem with comparing Thunder-X to X-Gene3 is that X-Gene3 does not yet exist. Will CAVM do AMCC the favor of standing still while AMCC releases X-Gene3 as a product? ...will Intel do the same? Will this be true especially when competitors know ahead of time the specifications they have to beat?
Still another possibility is that we are so early in the adoption phase that it is difficult to distinguish the signal from the noise and revenues will tend to be lumpy and unpredictable for the immediate future. This could very well be true, in fact it is likely.
I hope that if things do begin to go south, including an unreasonable amount of time passing before the release of successful products, that Christopher Zepf, and others hold shareholder value paramount and sell AMCC. Whichever processor architecture is finally adopted, the leading company will need the leading interconnect technology to build the twenty first century data center. AMCC knows how to do that, and it could be very valuable to pair with the ARM processor technology of say QCOM, for example.
If you own AMCC, you certainly must live in interesting times.
There are one or two things that are problematic here.
One is that if AMCC is still a front-runner in the ARM server market, and that market will be $5B by 2020, then AMCC's top line should be one hell of a lot larger. In fact, from the extrapolation, this argues for an ARM server market that is about $0.7B, and not the forecast $5B proposed by ARM.
Another possibility is that the other ARM competitors are selling more than AMCC presently, and this is responsible for the weakness. This seems unlikely, as CAVM had a fairly sketchy earnings call as well. ...speaking of CAVM...
I noticed in the Linley white paper (figure 1) that Thunder-X acquits itself rather well relative to X-Genes 1 and 2. The only problem with comparing Thunder-X to X-Gene3 is that X-Gene3 does not yet exist. Will CAVM do AMCC the favor of standing still while AMCC releases X-Gene3 as a product? ...will Intel do the same? Will this be true especially when competitors know ahead of time the specifications they have to beat?
Still another possibility is that we are so early in the adoption phase that it is difficult to distinguish the signal from the noise and revenues will tend to be lumpy and unpredictable for the immediate future. This could very well be true, in fact it is likely.
I hope that if things do begin to go south, including an unreasonable amount of time passing before the release of successful products, that Christopher Zepf, and others hold shareholder value paramount and sell AMCC. Whichever processor architecture is finally adopted, the leading company will need the leading interconnect technology to build the twenty first century data center. AMCC knows how to do that, and it could be very valuable to pair with the ARM processor technology of say QCOM, for example.
If you own AMCC, you certainly must live in interesting times.
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