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Akoustis 4Q23 schedule and more ?4

11:56 01-Sep-23

I don't think it's a coincidence that Samsung has reportedly won a memory supply agreement with Nvidia in short order after the announcement of its PIM research, below.  I think the deal is being done to gain eventual access to the newer chips when they become available.  Such a move could produce a compelling results in the near term, whereas the more ground-breaking analog chip approach from IBM will probably still take years to commercialize.  I do see its use of integrated phase change memory as being more likely to find sustainable success in edge devices than Samsung's LPDDR-PIM DRAM, though.  Samsung's work in automating chip packaging also stands out and undercuts Intel's claims in the area.

That's in contrast to a $15.5b package from Washington to support retooling of existing factories for EV production if jobs in those factories are retained.  Having people build cars ultimately just makes them more expensive.  I hope to hear that ChargePoint and others are getting on the stick with fast charging.

Apart from these two reports on Wednesday, next week looks pretty quiet.  Enjoy the long weekend!

Intel's CEO just communicated that the business is above the midpoint of guidance.  We're now two thirds of the way through the quarter.  Per the notes below, readers may not be surprised that I am not impressed.  Since Gelsinger references a midpoint he probably means gross sales, and less profit from more revenue is in line with my outlook.  However, even if Intel were to blow out projections to earn 75 cents per share this year and $2 in 2024 that would only warrant a $20 price tag at the 10x P/E that would be the baseline for a manufacturer.

He also mentioned that he expects to receive government funds this year, has pre-payments for foundry capacity for multiple customers, and still hopes to disclose names this year.  That should carry some weight, and indeed, INTC has risen another 2% to trade above $35.  However, he also acknowledged that Intel will have to compete hard on price, which leads me to look at the longer term picture...

Over six years ago I speculated that

the advent of a new class of non-volatile memory will introduce new classes of computing devices that have more to do with integrating components, and improving the communications between them than it will with faster processors ...   We'll have to wait for redesigns and benchmarks to really know, and that is almost certainly a long process rather than a singular event.

Samsung has just documented what looks like the first of those benchmarks.  By using its PIM (processing in memory) chips with AMD GPUs, Samsung demonstrated double the performance using one third the power.  This works because matrix multiplication, which is fundamental to big data applications, can be done on the memory chip itself, thereby mitigating the von Neumann bottleneck.  Other memory vendors are working on similar approaches, which is an evolution from simply adding more memory bandwidth as is being done with the Intel roadmap below.

For the record, there are follow up reports simply stating that the Biden administration has not denied export licenses to the Middle East.  This leads me to continue with my short term positive, but medium to long term negative outlook for the market, and especially Intel, whose next quarterly report is due at the end of October.  In today's discussion, even Gelsinger acknowledges the "false economy" and "euphoria" associated with Nvidia, as well echoing my point about mature nodes seeing more volume on the edge.  Ultimately, the evolution is still more of a positive factor for software built for these new architectures like MariaDB than it is for companies like Intel, which have to spend for every chip they produce.

On 8/31/23 09:45, Esekla wrote:

Nvidia and AMD have reported export restrictions on their chips extending beyond China.  I think this supports my cynical view on chip demand.  However, Grayscale winning its appeal against the SEC's denial of its Bitcoin ETF spurred sentiment.  I note this doesn't necessarily mean that the ETF will list.  What it really means is that the SEC has to explain itself better.  I still haven't seen much in the way of being able to use cryptocurrencies for real world products.

On 8/30/23 09:21, Esekla wrote:

Huawei has introduced the Mate 60, with the Pro version reported to have 5G capabilities.  It adds another thing for investors to worry about, but I continue to see the development as being of little fundamental relevance to AKTS.  However, downbeat revenue and guidance from HP adds to the generally poor semiconductor outlook.

On 8/29/23 14:14, Esekla wrote:

On the other side of the data center food chain, Google's Cloud Next conference is underway.  Its latest custom processors and use of Nvidia GPUs underscore my take on Intel's effort, below.  The tepid jump and subsequent giveback in GOOG reinforces my view that Google is having its own trouble competing, and keeping the peace.

More interesting is the news that biodigesters have been ordered for the Penguin FLNG & Celsius FSRU.  The business seems incorrectly attributed to Golar, since New Fortress now owns the vessels, and is deploying them to Altamira and Bacarena, respectively.  This indicates that both vessels are preparing to be manned, though perhaps not quite on the schedule projected in the last report.

On 8/29/23 08:35, Esekla wrote:

Akoustis has scheduled the report on its fiscal fourth quarter for the morning of September 6th.  The average of 5 analyst estimates comes to a loss of 17 cents per share from $8.4M of revenue, continuing to ramp to $9.5M this quarter.  AKTS trades more than a dollar below its last placement price and at half of recent highs.  I see that as a value, but have already acknowledged the unique challenges for Akoustis and what a horrible environment this is for GRoDTs.  That backdrop makes this report especially pivotal, and I think that management would have to take the unlikely step of ruling out further dilution in order to improve the stock price in the near term.

Actually, the "horrible environment" description should apply to the entire semiconductor industry.  PC shipments are set to see the largest YoY decline ever.  Intel is attempting to combat in its sixth-gen products by catching up to the higher memory bandwidth offered by competitors, which is suited to AI and data center workloads.  However, these products won't be available until next year, and will force customers to choose between performance and power efficiency via the "Granite Rapids" and "Sierra Forest" products, respectively.  Even if customers espouse such tradeoffs it doesn't bode well for sales of Intel's fifth-gen "Sapphire Rapids" offerings, which hit the market next quarter.

Power consumption is also a consideration in Shell's latest gas platform and its first in Malaysia.  The project was completed in two years, and is notable for being unmanned and uses renewable electricity for its operations.  I think the lack of staff and development time, which is more than twice what New Fortress looks to be taking, are most important.  The wisdom of using renewable energy to power fossil fuel production evades me.

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