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ARM buyout implications and IoT +2
09:34 18-Jul-16
This morning's announcement that SoftBank will buy Arm is likely to be seen as a sign of the M&A trend in semiconductors kicking into high gear. That's speculatively positive for these stocks that I cover:
- IDTI - which just announced a new timing chip for communications devices.
- MX - which already has a $10 buyout offer that it has
been stalling, and will
host its Foundry Symposium on Sept. 27th
- INVN - which I've long cited as being a hard-to-find critical piece for the design of a new wave of ultra-compact consumer devices.
The deal cites IoT opportunity as one of the main drivers. I see
that as an uncertain market with lots hype. There will almost
certainly be growth, but I think the opportunities tend to come in
specific niches. This opinion comes from thinking about what
actually has to happen here, from a communications and computing
standpoint. Most of the devices that really could benefit from
IoT will be powered in some way. In the majority of cases where
that is wired electrical power, there may already be established
communications networks that can be leveraged. Even when that's
not the case, the very low data transfer rates may lend themselves
to communication over power line applications which were developed
long ago, but found to be not suitable for high bandwidth. Of
course some devices will be unpowered or off the grid, but how
many, really, and how compelling will the need for IoT be in such
cases? When I ponder these questions, I wind up liking the
sensor, low-power computing (like ARM) and maybe analytics
providers better than the communications side.