CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · •...

Craig Berger CFA CPA HedgeyeBerger

CHIP STACK TIMES SEMICONDUCTORS

July 1 2014

HEDGEYE 2

DISCLAIMER Hedgeye Risk Management is a registered investment advisor registered with the State of Connecticut Hedgeye Risk Management is not a broker dealer and does not provide investment advice for individuals This research does not constitute an offer to sell or a solicitation of an offer to buy any security This research is presented without regard to individual investment preferences or risk parameters it is general information and does not constitute specific investment advice This presentation is based on information from sources believed to be reliable Hedgeye Risk Management is not responsible for errors inaccuracies or omissions of information The opinions and conclusions contained in this report are those of Hedgeye Risk Management and are intended solely for the use of Hedgeye Risk Managementrsquos clients and subscribers In reaching these opinions and conclusions Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Managementrsquos employees which is based upon sources considered credible and reliable within the industry Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied

TERMS OF USE This report is intended solely for the use of its recipient Re-distribution or republication of this report and its contents are prohibited For more details please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at wwwhedgeyecom

DISCLAIMER

HEDGEYE 4

SEMICONDUCTORS POWER YOUR WORLD

HEDGEYE 5

bull Equity Research Analyst Craig has spent more than a decade as a semiconductor equity research analyst including as Managing Director and Technology Sector Head at Hedgeye Risk Management and previously as managing director for FBR Capital Markets (2007-2013) Wedbush Morgan (2005-2007) and Smith Barney Citigroup (2002-2005) He is a top institutional vote getter at firms like Fidelity Wellington Columbia amp others Craig won several awards from Forbes and ThomsonReuters and has numerous media and press interactions See more on LinkedIn here and CNBC here

bull Industry Experience Craig worked at Intel Corp (1999-2002) in positions of increasing responsibility in the CPU and capital spending finance groups Craig garnered industry perspective and training worked to maximize cash and developed capex metrics

bull Entrepreneurial and Startup Experience Since 2009 Craig founded a growing property management firm in St Louis (to fix or rent for cash flow) and a specialized e-commerce vendor of musical equipment Craig also served as interim CFO of technology startup firm Thirstiecom All of these endeavors provided a trove of operational strategy and real-world problem solving experience

ABOUT CRAIG BERGER CFA CPA

HEDGEYE 6

We add value by layering Keith McCulloughrsquos Macro amp Technical w our Fundamentals

OUR APPROACH DRIVES VALUE

Subscriber Marketing Further Develop Deep Relationships

Industry Events amp Insights Expert Conference Calls Dinners

Focus on Fresh Long and Short Ideas Relative or Absolute

Deep-Dive amp Cross Sector Analysis Macro-related Takeaways

Topical amp Regular Publications Firm Specific amp Industry Pieces

People Networks End Markets amp Firms Close Mgmt Relationships

Good Analysis Events amp Stock Calls married with

Technical amp Macro Analysis

HEDGEYE 7

bull Macro amp Technical Analysis from Hedgeye Founder Keith McCullough helps time stock entry amp exit points Marrying fundamental with Macro amp Technical analysis

bull Relevant industry experience Three years at worldrsquos largest chip firm Intel Corp bull Deep industry contacts across chip firms distributors hardware firms

bull We only seek information on broad trends sub-sector growth lead times pricing competitors etc Legal mosaic informational cross references are only way we operate

bull Detailed Financial Models with bottoms-up Units and ASPs through CY2017 bull Deep Research Analysis We do deep-dive detailed research on pieces of a firmrsquos

businessequity or on topicstechtrends of interest bull Hosted Content Events Deep-dive conference calls speaker series conference calls

hosted CESMWC tours NDRs possible Silicon Valley Bus Tours or Asia tours bull Close management relationships We maintain close management relationships giving

us NDR access answers to business queries other deep-dive insights bull Good judge of buy-side expectations We regularly speak with Buy-Siders helping us

sense expectations on a stock We leverage our 10+ years of sell-side experience here

OUR DIFFERENTIATED INSIGHTS

HEDGEYE 8

Research Coverage Mission Provide leading buy-siders with actionable longs amp shorts relevant companyindustry analyses and various content events bull Covering industry leaders INTC QCOM TXN TSMC There are only four bigmega cap

chip stocks and investors always care here We will provide continuous relevant research on these names (TSM possibly less so given it is foreign)

bull Covering Apple amp Samsung supply chains Apple amp Samsung smartphone supply chains are still of intense interest to investors many derivative plays all around tech sector (QCOM BRCM ARML SWKS AVGO TQNT CRUS SNDK NXPI TSM)

bull Covering PC Handset Communications Equipment Cloud market trends Relevant analysis on PC (INTC AMD NVDA MRVL AVGO MU) Handset (QCOM ARML BRCM MRVL SWKS TQNT RFMD MXIM ATML SYNA CRUS) and Communications Equipment trends (CAVM IPHI SLAB FSL NXPI) are still of interest

bull Covering other thematic topics interesting longsshorts or growthstory stocks Whatever is interesting (cloud IoT 4G infrastructure datacenter) as opportunities arise

SEMIS SECTOR COVERAGE PLAN

HEDGEYE 9

SECTOR VIEW WE ARE CONSTRUCTIVE ON CHIP FIRMSrsquo FUNDAMENTALS COGNIZANT

STOCKS HAVE HAD A HUGE RUN WITH POSSIBLE PROFIT TAKING

HEDGEYE 10

SEMICONDUCTOR COVERAGE SUMMARY Source Hedgeye Risk Management

bull Following big SOX run higher we seek exposure to defensive longs (QCOM MXIM) product cycle growth stories (SLAB) and other value plays (IRF BRCM)

Return Market Current Target Current Target Current Target Current Target

Rating PriceFair

Valueto Fair Value Cap ($m)

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

BRCM Long $3686 $4700 28 22916 228 305 159 213 113 151 135 180 $044IRF Long $2766 $3600 30 2017 125 177 146 208 103 147 71 101 NAINTC Neutra l $3093 $3100 0 157526 262 262 121 121 119 119 63 63 $090LLTC Short $4668 $4400 -3 11460 741 695 205 192 183 171 147 138 $108MXIM Long $3391 $3900 19 9711 363 419 164 190 141 163 110 127 $104NVDA Neutra l $1838 $1800 -2 10043 157 152 188 182 177 171 108 105 $034ONNN Neutra l $909 $1100 21 4022 139 166 110 131 90 108 69 83 NAQCOM Long $7899 $9500 22 134520 361 460 126 161 115 147 95 121 $172SLAB Long $4885 $5800 19 2172 305 372 320 390 265 323 186 226 NATXN Neutra l $4776 $5200 11 51867 398 433 176 192 148 162 106 116 $120Median $354 $415 19 10751 284 338 161 191 130 156 107 118 $104Average $379 $431 14 40625 308 344 172 198 145 166 109 126 $096All PE amp EVEBITDA multiples include stock comp expense and back out net cash and related interest income (or the opposite for debt)

Annual Dividend

2014

Source Hedgeye Risk Management

HEDGEYE 11

CHIP STACK KEY INDUSTRY TAKEAWAYS SOX upside to 700-750 possible if supply chain restocking or macro strengthen However a near-term correction seems healthy after such a run We look to buy lower then bull Semiconductor Fundamentals are (too) Strong New all-time highs seen in sector Sales

Margins Profits Cash on Hand amp Dividends Some Upcycle dynamics seen with 2Q14 guides bull Sector YOY revenue comparisons have likely peaked and are decelerating

bull Overall inventories mostly in check PC amp Industrial DOIs moving up Chip firms are lean bull But Some supply chain re-stocking is now happening in 2Q14 (TXN ONNN)

bull Chip sector now a Dividend amp Cash Return story Dividend yield leaders include STM (42) INTC (30) MXIM (30) MCHP (29) and ADI (27)

bull Large Dividend Hikes (andor buybacks) SNDK QCOM BRCM NVDA MRVL ALTR AVGO POWI VSH SWKS

bull Chip Acquisitions Heating Up Sector Consolidation trends should continue with CAVM ISIL SLAB POWI MLNX AMCC IPHI EZCH our top acquisition targets

bull Acquisition Buckets include Analog roll up bucket Discretes roll-up bucket smaller product cycle targets larger scale targets amp miscellaneous

bull Some chip stocks that one can own now include QCOM MXIM SLAB IRF BRCM

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

Global Macro Trends 3Global economy improving + US Fed policy to inflate US consumer squeeze and slowing China are risks

Global Demand Product Cycles

2Global demand seems decent as emerging market middle class grows Smartphones wearables tablets 4G infrastructure cloud data center IoT others

Global Inventories 2 PC amp industrial inventories keep growing Chip firms amp distributors running leanChip Revenues YOY

0YOY comparasions are likely peaking but at a solid +10 YOY and beginning to decelerate (bad) still versus positive growth last year

Chip Pricing Trends 4 Robust memory CPU GPU pricing means good times are here

Inflationary Impacts (1)Energy Wages and Healthcare costs increasing Commodity medals could go much higher still

Technical Measures 2Charts still generally look good with various chip stocks making new recent highs (INTC QCOM MU SNDK AVGO)

Valuation Measures 2Valuations have increased but so have EPS estimates Much good news now baked but sector still trades reasonable ~13x PE (2015) and ~8x EVEBITDA (2014)

Other Factors 4Chip consolidation and MampA activities heating up Chip firms now Cash Return stories as dividends amp buybacks drive upside from YieldChasers

Median 20 Dashboard Metrics still Tilting Positive But much good news is now baked and still Average 20 US Fed amp Macro dependent

SOX DASHBOARD STILL TILTS MODESTLY POSITIVE Source Hedgeye Risk Management

HEDGEYE 13

SOX STILL TILT POSITIVE BUT MUCH NOW BAKED

bull Cyclical Industry with more Maturity ndash Long capacity installation times and product manufacturing times drive inventory boombust cycles

bull Cycles more muted now given enhanced maturity of industry bull Semiconductor sector Dividend and Share Repurchase cash return story in play bull Merger amp Acquisition activity also heating up and driving higher valuations given dearth of accretive deals

bull SOX breaks out to new all time highs (ex-DotCom) as Melt Up happens amp Upcycle dynamics ramp

bull SOX upside to 700-750 possible if supply chain restocking or macro strengthen further

bull Fundamentals (too) strong w correction healthy for stocks to move higher modestly positive dashboard metrics amp global demand

bull Selectivity in stocks matters more again bull We may be in later stages of this run bull Correction or not also fedmacro dependent

0

100

200

300

400

500

600

700

800

SOX PhiladelphiaSemiconductor Index

HEDGEYE 14

INDUSTRY FUNDAMENTALS STILL POSITIVE BUT RE-STOCKING

NOW HAPPENING MACROFED DEPENDENT AND MUCH BAKED

HEDGEYE 15

0

10

20

30

40

50

60PC HardwareStorage Inventory Days

0

9

18

27

36

45

Supply Chain Inventory Days

0

10

20

30

40

50

60

70

Semi Suppliers Inventory Days

0

16

32

48

64

80

Distributor Inventory Days

2Q14 DISTIS NOW REPLENISHING INVENTORY PC DAYS UP

Clearly some Disti restocking is now happening raising forward risks bullConclusion Overall supply chain still in control (but not as lean as 2009-2010)

bullConclusion PC amp storage firms have elevated inventory levels a risk to that supply chain

bullConclusion Chip firms amp distributors running lean lessening risks

Source Hedgeye Risk Management Factset

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

Industrial Inventory Days

0

10

20

30

40

50

60

Communications Inventory Days

0

5

10

15

20

25

30

35Handset Inventory Days Conclusion Comms

Equipment amp Handset inventories look healthy

Conclusion Industrial amp EMSODM inventory days are slowly ticking higher

bull Drives a higher risk profile here should any macro slowdown occur

1Q14 INDUSTRIAL amp PC INVENTORY TICKING HIGHER

HEDGEYE 17

CHIP FIRMSrsquo MARGINS NEAR ALL-TIME HIGHS

Gross amp Operating Margins at or near All-Time Highs ndash Sector more mature now ndash Generating much excess free cash ndash Inflation trends could pressure

gross margins but chip firms likely to raise prices in turn

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

Sector Operating Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

Total RevenuesRevenues YOY

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

Total Pro forma Income

CHIP EARNINGS AND REVENUES TOOhellip Revenues and Earnings at or near All-Time Highs ndash Sector more mature now ndash Generating much excess free cash

ndash Chip revenue CAGR ~35 since 2005 ndash Most of sectors profits generated by a

few firms INTC (33) QCOM (24) MU (10) TXN (9) SNDK (4) ndash Note ARMH and TSM are excluded from this data set

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

Total Net Cash (Debt) on Hand

THUS NET CASH AT ALL TIME HIGHShellip Net Cash Position All Time High ndash Net Cash has grown 80 since

the pre-cash economic peak in 2007

ndash Most of sectors net cash held by a few firms QCOM (42) INTC (21) SNDK (6) FSL (-7) ndash Note ARMH and TSM are excluded from this

data set

HEDGEYE 20

HEDGEYE CHIP STACK DIVIDEND ANALYSIS

ndash Conclusion Large Dividend Hikes (andor share buybacks) possible from SNDK POWI BRCM QCOM NVDA MRVL TXN AVGO ALTR SWKS VSH

ndash Conclusion Dividend Yield Leaders include STM (42) INTC (30) MXIM (30) MCHP (29) amp ADI (27)

ndash TXN shares have soared after instituting wildly popular cash return policy A model for other firms to follow

HEDGEYE 21

SO DIVIDENDS ARE GROWING NICELYhellip

ndash Note ARMH amp TSM pay dividends but are excluded from this data set

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

Total Share Repurchases

Total Dividend Payments

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

Dividend Payments at All-Time Highs ndash Generating much excess free cash and

finally beginning to pay some of it out ndash Sectorrsquos biggest dividend payers (in $) are

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

hellip AND SO ARE SHARE REPURCHASES Share Repurchases Solidly Growing ndash More volatile than dividends tied to

economic cycle and share price sell-offs ndash Most of sectorrsquos repurchases (TTM) driven

by few firms QCOM (34) TXN (16) INTC (13) SNDK (9) NXPI (4)

ndash Note ARMH and TSM are excluded from this data set

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

TTM Share Repurchase TTM Dividends

FIRMS RETURNING CASH TO SHAREHOLDERS Firms that Returned the Most Cash (TTM in $) ndash QCOM had big buybacks plus dividends ndash INTC amp TXN pay big dividends and repurchased ndash SNDK NVDA NXPI MXIM round out the list

Top Five Firms Drive 75 of total Cash Payouts

$M

TTM Share Repurchase

TTM Dividends

Total Shareholder

Return ($M TTM)

of Chip Sectors Shareholder

ReturnsQCOM 6364 2375 8739 292INTC 2453 4484 6937 232TXN 2909 1268 4177 139SNDK 1614 153 1767 59NVDA 887 181 1069 36NXPI 828 0 828 28MXIM 465 290 755 25BRCM 490 261 751 25ADI 132 421 554 18ALTR 360 176 535 18XLNX 241 267 508 17MRVL 376 119 496 17STM 0 343 343 11LLTC 85 251 336 11AVGO 94 218 312 10MCHP 0 281 281 09SWKS 212 0 212 07ATML 127 0 127 04ONNN 120 0 120 04

HEDGEYE 24

TXNrsquos Cash Return Policies a Smash bull Policy Returning 100 of Free Cash Flow plus proceeds from Stock Options amp Share sales less debt repayment needs

bull Shareholders have rewarded TXN very well with shares +37 in past year and +68 in past two years (plus dividends)

bull Dividend $13 billion per year ~10 of sales and ~40 of free cash flow

bull Share repurchases steady in the market and smoothed to account for variability in cash flows and debt repayments

0

10

20

30

40

50

60

TXN

Sha

re P

rice

TXN CASH RETURN POSTER CHILD More Chip Firms Commit to Paying Out Cash ndash These firms are getting rewarded ndash QCOM SNDK and NVDA have all made

cash return pledges this year

HEDGEYE 25

FIRMS RETURNING CASH TO SHAREHOLDERS Firms that Returned the Most Cash (as of Market Cap) ndash ELX had a big

repurchase program of $200M

ndash NVDA returned much via dividend amp buyback

ndash TXN MXIM SNDK MRVL QCOM next

Total Shareholder Return of Market

Cap (TTM)ELX 238NVDA 101TXN 81MXIM 77SNDK 76MRVL 66QCOM 65PMCS 59MCRL 58QLGC 55MX 51NXPI 50ALTR 49ENTR 48DSPG 46INTC 46Top 16 59

Firms with the Highest Dividend Yields ndash STM (is it

sustainable) ndash INTC MXIM

MCHP ADI ndash TXN XLNX

LLTC QCOM ALTR NVDA MRVL AVGO

Total Shareholder Return ($M

TTM)Dividend per Share

Dividend Yield

STM 343 $040 42INTC 6937 $090 30MXIM 755 $104 30MCHP 281 $142 29ADI 554 $148 27TXN 4177 $120 25XLNX 508 $116 25LLTC 336 $108 23QCOM 8739 $168 21ALTR 535 $060 18NVDA 1069 $034 17MRVL 496 $024 16AVGO 312 $116 16BRCM 751 $048 13SNDK 1767 $090 09SWKS 212 $044 09NXPI 828 $000 00ATML 127 $000 00

HEDGEYE 26

Dividends amp Buybacks

($M TTM)

Dividend of Next Years

Earnings

Net Cash on Hand

($M)

Earnings Current

Year ($M) CommentSWKS 212 13 798 560 Better Sizable dividend raise possible Or acquisitionsSNDK 1767 14 4864 1371 Better Sizable dividend raise possible To pay out all FCFPOWI 10 14 218 73 Better Sizable dividend raise possibleBRCM 751 15 3546 1369 Better Sizable dividend raise likely after Wireless exitVSH 9 20 788 131 Better Sizable dividend raise possibleMRVL 496 20 1971 574 Better Sizable dividend raise possibleAVGO 312 22 1124 997 Better Sizable dividend raise possibleQCOM 8739 29 32040 8760 Better Sizable dividend raise likely To pay out 75 of FCFNVDA 1069 33 3298 510 Better Sizable dividend raise possibleALTR 535 33 3221 483 Better Sizable dividend raise possibleMPWR 32 36 238 60 Typical Slight dividend raise likelyMCRL 37 38 96 18 Typical Slight dividend raise likelyINTC 6937 43 16080 10043 Typical Slight dividend raise likely in JanuaryXLNX 508 43 2089 651 Typical Slight dividend raise likelyAVX 71 45 899 126 Typical Slight dividend raise likelyTXN 4177 45 (1408) 2510 Typical Slight dividend raise likely Has net debt not cashMCHP 281 46 1123 552 Typical Slight dividend raise likelyLLTC 336 49 920 444 Typical Slight dividend raise likelyMXIM 755 50 228 474 Typical Slight dividend raise likelyADI 554 55 3834 738 Typical Slight dividend raise likelyISIL 62 61 197 93 Typical Slight dividend raise likelyIRF 3 568 68 Not Now No div likely for now buybacks MampA in focusSLAB 26 240 85 Not Now Good candidate for later acquisition focusedIDTI 44 454 102 Not Now Good candidate for laterCRUS 52 385 112 Not Now No dividend likely for now given Apple volatilitySYNA 85 410 149 Not Now Good candidate for laterATML 127 257 187 Not Now But good candidate for laterONNN 120 (303) 353 Not Now No div likely now debt reduction MampA in focusNXPI 828 (2810) 1108 Not Now Working off net debt so no dividend likely yet

PREDICTING BIG DIVIDEND HIKES ALPHA Big dividend hikes (or share buybacks) can drive upside for investors ndash Conclusion Large Dividend Hikes

(andor buybacks) possible from SWKS SNDK POWI BRCM VSH MRVL AVGO QCOM NVDA ALTR

ndash Conclusion Initial Dividends possible in the future from ATML IDTI SYNA SLAB ONNN IRF CRUS

ndash We do NOT see any of these firms as ready to initiate new dividends at next annual review meeting

HEDGEYE 27

HEDGEYE CHIP STACK ACQUISITION ROUNDUP

ndash Conclusion Highest Chance of Being Acquired CAVM ISIL SLAB POWI MLNX AMCC IPHI EZCH

ndash Conclusion Second Likeliest Tranche of Targets SMTC MPWR INVN ADNC MCRL ATML DIOD

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Accretiveness Positive Net

Margin (0-5)

Other Factors

(-5 to +5)Total Score Comments

AMCC 4 4 1 1 2 12 Solid microserver product amp sub-scale ops QCOM TXN BRCMCAVM 4 5 0 0 3 12 Robust IP amp end-market sub-scale operations QCOM or TXN EZCH 5 3 1 2 1 12 Solid IP small scale amp robust margins INTC BRCM QCOM AMCCHITT 3 4 1 1 3 12 Getting acquired by ADI Attractive high margin high-rel businessIPHI 4 4 1 1 2 12 Interesting products amp small scale BRCM MXIM INTCISIL 2 3 1 1 5 12 Analog Roll-Up play w broadbased business TXN MCHP SWKSMLNX 3 4 1 0 4 12 Attractive products amp end markets BRCM MXIM INTCPOWI 3 2 2 1 4 12 Analog Roll-Up play w solid IP amp margins TXN MCHP SWKS ONNNSLAB 2 5 1 0 4 12 Tremendous product portfolio Targeting IoT TXN BRCM MXIMADNC 4 4 1 1 1 11 Interesting products amp small scale BRCM MXIM INTCINVN 4 4 1 0 2 11 Sub-scale firm decent IP for wearables profitable marginsMCRL 3 1 0 3 4 11 Analog Roll-Up play TXN MCHP SWKS ONNNMPWR 3 3 1 1 3 11 Strong IP portfolio amp margins w smaller scale TXN MCHP SWKSSMTC 2 3 0 1 5 11 Analog Roll-Up play for TXN MCHP SWKS or even ONNNATML 2 4 1 2 1 10 Could be attractive to TXN or MCHP given solid MCU products amp fabsDIOD 2 2 0 2 4 10 Discretes Roll-Up play potential for IRF ONNN or FCSEXAR 5 3 1 1 10 Smaller Roll-Up play decent IP amp margins MCHP SWKS ONNNIXYS 3 2 0 2 3 10 Discretes Roll-Up play potential for IRF ONNN or FCSLSCC 3 3 1 1 2 10 Solid revenue base and margins make this an attractive Roll Up playPMCS 2 4 1 1 2 10 Solid products end markets margins and revenue profileSIMG 3 3 1 2 1 10 Decent (but niche) IP and sub-scale size rollup playTQNT 2 3 1 0 4 10 Being consolidated by RFMD RF Roll-Up consolidation play

MampA ACTIVITY HEATING UP PROVIDES A BID Highest Chance of Being Acquired CAVM ISIL SLAB POWI MLNX AMCC IPHI EZCH SMTC MPWR INVN ndash MampA Activity heating

up chip sector Provides some juice

ndash Firms seek scale cost synergies revenue synergies and uses of cash

ndash Some firms are IP plays sector Roll-UpScale plays or Accretion plays

Note We rated PLXT with a lsquo9rsquo Total Score

HEDGEYE 29

FORECASTED MampA ACTIVITY BY BUCKET Analog Roll-Up Bucket Scale amp cost synergies sought by TXN (still absorbing NSM) MCHP (test-driving w SUPX acqrsquon) SWKS (diversification) and maybe MSCC or ONNN (to offset Sanyo pressures) ndash Targets are (in order) ISIL SMTC POWI MPWR MCRL EXAR ATML

Discretes Roll-Up Bucket The discretes sub-sector is likely to continue to consolidate though each major firm management team wishes to remain one of the few last standing may make this harder ndash Targets are (in order) IXYS DIOD VSH (actives only) AVX (actives only) ATNY

Product Cycle amp Growth Driver Bucket (larger) While there are not many growing product cycle firms left in the chip sector but a few have strategic IP products or end-markets ndash Targets are (in order) CAVM SLAB MLNX AMCC PMCS INVN ENTR

IP Technology Acquisition Bucket (smaller) There are many niche chip firms that have decent IPtechnology but can not defend being a standalone public firm with sub-scale ops amp high overhead ndash Targets are (in order) EZCH IPHI ADNC PRKR SIGM SIMG PSEM VTSS AXTI PLXT

Other Possible Acqusition Bucket Here are others that could get gobbled up for various reasons ndash Targets are (in order) QLGC ELX LSCC MXIM (by TXN) ADI (by TXN)

HEDGEYE 30

HEDGEYE CHIP STACK KEY STOCK PICKS

HEDGEYE 31

TickerLong Short

PriceFair

Value Return to Fair Value

Market Cap ($B)

Dividend Yield

Thesis

QCOM Long $7899 $9500 20 $1330 21Cel lular technology amp product leader now with one less competi tor as BRCM exi ted cel lular Can appreciate in an up market and i s defens ive in a down market Go-to mega-cap chip long w growth drivers in QTL uni ts China Mobi le Wearables amp more

MXIM Long $3391 $3900 15 $96 30MXIM shares an attractivesafe mid-cap long Can appreciate in up markets i s defens ive in down MXIM a Cash Return s tory with 31 dividend amp share buybacks The fi rm has leading analog IP a ba lanced bus iness model amp a s trong management team

IRF Long $2766 $3600 30 $20 NALower margin power management smal l mid-cap play Tes la play with $500 of content per car and other growth drivers Gross margin expans ion amp financia l leverage to drive EPS ups ide Va luations s ti l l a ttractive w s tock having eventual runway into the $40s

BRCM Long $3686 $4700 28 $215 13BRCM shares seemingly rol l ing over amid post-Cel lular Exi t profi t taking ri skreward s tarting to get more attractive long here as we approach $35 Sti l l industry leading products and sol id end market exposure Shares now inexpens ive at 115x PE

SLAB Long $4885 $5800 19 $21 NASLAB shares are richly va lued but fi rm has attractive proprietary products targeting IoT and Infrastructure i s one of the few growth fi rms in Semis i s an acquis i tion target (for TXN MXIM INTC QCOM SWKS) amp should have robust 2H14 financia l trends

NVDA Neutral $1838 $1800 -2 $103 18NVDA seems best pos i tioned PC chip fi rm Cash Return amp Bus iness Transformation Stories are happening but we await a better s tock entry Va lue-add pro server datacenter amp auto GPUs are ha l f NVDAs va lue PC GPU sa les seem mostly s table now

ONNN Neutral $909 $1100 21 $40 NAONNN is a va lue but we prefer IRF for now ONNNrsquos higher-beta action could drive a sel l -off towards $8 i f Semis correct (a better entry) If Semis do not correct or i f bus iness ramps s izably in 2H14 then ONNN shares are l ikely headed above $10

TXN Neutral $4776 $515 25TXN shares are a mass ive Cash Return amp Gross Margin leverage s tory Dis ti re-s tocking here in 2Q14 i s helping loadings driving GMs up towards 60 TXN could earn close to $400 out in time a plus Prefer QCOM in mega-cap or MXIM in analog

INTC Neutral $3093 $3100 0 $1540 30Rebound in cl ient PC sa les l ikely a dead cat bounce Li ttle PC uni t growth with chip price decl ines amp tabletARM pressure (MS Office on iTunes) No rea l innovation beyond PC CPU process amp manufacturing No rea l handset or tablet biz Likely a protracted battle

LLTC Short $4668 $4400 -6 $112 23LLTC does everything right with industry high margins a great track record of s tabi l i ty amp growing shareholder returns But l i ttle i s left to improve with Operating Margins at 50 Also LLTC trades at a 30 PE premium vs MXIM which we prefer on a relative bas is

SEMICONDUCTOR STOCK CALL SUMMARY Semi Sector Thoughts bull Semis group has meaningfully appreciated many stocks sit at or near recent-history highs

bull Fundamental still good w supply chain inventories largely in check demand trends decent new drivers

ndash But w some signs of double ordering or re-stocking

bull Given stock run amp valuations a prudence makes sense for oft- depressed July-Aug

bull We did not get the Sell in May and go away behavior that happens many years

HEDGEYE 32

c2010 c2011 c2012 c2013 c2014e c2015e c2016e c2017eRevenues ($m) 11661 16291 20458 25469 27748 30181 31219 32110Gross Margin 698 674 645 609 611 613 613 614Op Margin 395 401 375 358 369 376 372 363Net Income ($m) 4375 5734 6996 8927 9475 10140 10305 10349Pro Forma EPS $266 $336 $400 $511 $555 $600 $620 $630

Net Cash ($m) 19107 21978 28371 31610 34752 37191 38918 39902Net Cash per Share $1093 $1220 $1620 $1836 $2045 $2210 $2357 $2435

Dividends ($m) 1202 1399 1649 2217 2787 3091 3242 3399Share Repurchases ($m) 3015 241 1464 5362 4752 5100 5500 5800

QCOM Investment Thesis We think shares can appreciate in an up market and are defensive in a down market given the firmrsquos massive Cash Return story gold-standard cellular technology leadership sustainable competitive barriers additional growth catalysts and reasonable valuation bull QCOM a Cash Return story 75 of free cash being returned and a $32 billion cash arsenal bull Various growth opportunities exist including

1 Growth in LTE and smartphone chip shipments as emerging markets ramp (China Mobile is a particular oppty with TD-LTE) 2 Growth in royalty and chip shipments due to other device ramps tablets wearables automobiles IoT devices and more

bull Royalty units to grow from 12B units now to 20B units in time drives $150-$200 more EPS bull Valuation palatable at 12x-13x PE and 8x-9x EBITDA Appreciates in Up markets Defensive in Down

LONG QCOM FAIR VALUE $95 (NOW $79)

Company Description QUALCOMM Inc designs and markets leading cellular and other wireless chips and technologies The firm has the highest market share of cellular basebands and collects the most in cellular device royalties after inventing the code division multiple access (CDMA) standard and much of the 4G LTE standard The firm was founded in 1985 employs roughly 31000 people and is headquartered in San Diego CA

HEDGEYE 33

4G Competitive Landscape remains surprisingly benign bull QUALCOMM has clear technology leadership in 4G LTE vs all competitors bull The firm is going to ramp its fourth generation LTE solution in 2H14 while other competitors are still

trying to get their first or second solutions to work well enough for low-end customers bull Competition Limited Only Samsungrsquos internal solution (Exynos) Mediatek Marvell and Intel are real

4G competition with NVIDIA and a few other niche players existing on the margin

CY2014 (013113)

CY2014 (82713)

CY2014 Now

Revenues ($m) 25147 27449 27748QoQ YoY 51 72 89

Chipsets (mu) 769 784 870Chipset ASPs ($) $216 $234 $224

Royalty Devices 1109 1166 1225Royalty Device ASPs ($) $217 $219 $213Royalty Rate 328 327 310

Gross Margins 633 628 611Op Margins 364 367 369Pro forma EPS $450 $495 $555

Source Hedgeye Risk Management Other Noteworthy Mentions bull China Mobile is a large untapped opportunity still could drive

5 revenue growth over time bull Chip Pricing robust as smartphone prices fall but emerging

market mixes up bull QUALCOMM developing 5G standards and pursuing a broad

path of product differentiation bodes well for future chip content trends

QUALCOMMrsquos technology leadership amp scale are unmatched Fruits include nicely ramping EPS estimates

HEDGEYE 34

QTL Royalties Still Growing (Despite Big Growth) Wearables and other New Devices the Next Wave bull $100 of EPS Growth vs 2017 We still only model 16B device units in 2017 where others think QTL

devices grow to 20B units in 2017 This would drive $100 of EPS upside vs our 2017 EPS estimate bull Largely due to new categories like tablets Wearables and automobiles bull Key Sensitivity Each 100M QTL device units drives ~$025 of EPS (at todayrsquos ~$220 ASP)

bull Additional 4G handset device units as 2G winds down (Qualcomm does not collect 2G royalties) bull Mix Benefits We think emerging regions are mixing up their handset device purchases helping to offset

handset device ASP declines in developed markets

2009 2010 2011 2012 2013 2014E 2015E 2016E 2017EQTL Units (Mu) 508 655 795 939 1083 1225 1387 1497 1599QTL Device ASP ($) 189 176 197 213 221 213 213 206 202QTL Device Revenues ($M) 96260 115430 156654 199812 239705 260840 295559 308840 323734Qualcomms Royalty Rate 365 329 371 333 321 310 307 303 300

QTL Revenues ($M) 3515 3798 5805 6645 7699 8086 9065 9370 9716QTL Revenue Growth YOY -12 8 53 14 16 5 12 3 4QTL EPS Contribution $148 $160 $244 $279 $323 $340 $381 $394 $408

Assumes a steady 85 QTL Op Margin 16 tax rate and 17B shares outstanding to drive comparabil ity

Plenty of Gas left in the QTL tank with $150-$200 of EPS upside vs our 2014

and still $100 of upside vs our 2017 as new devices like

wearables ramp

HEDGEYE 35

QUALCOMM now a Cash Return story w $7B-$8B Yearly to Shareholders bull Qualcomm shareholder return metrics favorable returning 75 of free cash annually bull 15 annual share count reduction likely QCOM can repurchase ~50M shares annually more

than fully offsetting share count inflation by about 20M shares (15 of outstanding)

0

1000

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4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

bull Mr Market already rewarding firms that return shareholder cash and punishing firms that do not

bull Shareholder return metrics now increasingly important to chip investors as the sector matures

bull Separates the lsquoHavesrsquo from the lsquoNotsrsquo

QCOM is clearly a lsquoHavesrsquo and shares the love with

its shareholders too

HEDGEYE 36

($M) CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14E CY15E CY16E CY17E

Revenues 2073 1901 1657 2314 2461 2405 2419 2596 2799 2919 3022Gross Margin 615 603 563 624 627 621 612 613 617 612 613Op Margin 260 223 147 290 277 265 254 265 288 290 296

Net Income 403 306 176 447 497 498 486 556 640 674 716Pro Forma EPS $123 $095 $057 $147 $164 $166 $165 $194 $225 $240 $257

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

Dividends 220 247 244 246 253 269 287 300 318 329 345Share Repurchases 62 266 70 252 267 201 473 267 297 314 333

MXIM Investment Thesis MXIM shares an attractive safe mid-cap long that can appreciate in an up market and are defensive in a down market Cash Return story with 31 dividend yield amp share buyback in place Leading analog IP position and nice Sales split among growth amp broad-based (1) Might win iPhone 6 business Not certain but Maxim could win new content in Applersquos iPhone 6 (according

to some press) Maxim also has flagship smartphone sockets with Samsungrsquos Galaxy S handsets ndash Apple sensitivity $020-$025 EPS annual contribution for iPhone 6 sockets (range $007-$052)

(2) Stable margins command respect and are worth a premium multiple (3) Massive Cash Returns to shareholders a big plus (avg 22 of revenues in past seven years) (4) Shares are not expensive at a 14x PE (2015) slightly cheaper vs peers TXN (15x PE) amp LLTC (18x PE)

LONG MXIM FAIR VALUE $39 (NOW $3381)

Company Description Maxim Integrated designs and manufactures high performance analog chips for smartphones base stations automobiles industrial applications smart meters notebook PCs and more The firm claims analog integration leadership and is diverse with thousands of products and end-customers Maxim competes against analog firms like TI Linear Analog Devices and Intersil Maxim was founded in 1983 is based in Sunnyvale CA and employs 9000 people

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

80 Gross Margin Operating Margin

Dependable financials worth a premium shareholder returns significant bull Maxim an attractive business model with sticky product solutions and long-term competitive

barriers in IP design product breadth customer relationships Growth amp broad-based exposure bull Margins are remarkably steady and should remain so this is worth a premium bull While shares have run some volatility on MXIM is reasonably low ($2600-$3541 range in past

19 months) More sequential smartphone growth in crsquo3Q14 could propel shares towards $38

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

300 Industrial Revenues ($m) YOY

Growth drivers in Smartphone Industrial Automotive bull Smartphone (1) New technology

offerings (right) (2) Targeting mid-range amp China handsets with higher volumes (3) Wearables and IoT (watches glasses smart clothes smart appliances medical) (4) possible iPhone 6 content wins

bull Automotive Business is up 25 YOY from new design wins infotainment sensors video displays LED lighting smart key HybridsEVs

bull Industrial Medical smart meter financial terminals (payments) factory automation

bull Communications 4G infrastructure power datacenter links amp power

IP breadth leadership drives integration amp feature leadership bull Power amp Battery management SOCs bull Audio Codec bull Touch screen controller bull MEMS sensors MotionGesture Bio

Temperature Touch Proximity Optical Compass Mic Accelerometer

Industrial and Auto on a roll

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

Free Cash Flow Net Cash

2007 2008 2009 2010 2011 2012 2013 Average 2014E 2015E 2016ERevenues ($m) 2073 1901 1657 2314 2461 2405 2419 2175 2597 2799 2921Free Cash ($m) 215 358 263 513 678 519 570 445 618 648 679Free Cash of Sales 104 189 159 222 275 216 236 200 238 232 232

Dividends 220 247 244 246 253 269 287 252 300 318 329Share Repurchases 62 266 70 252 267 201 473 227 267 297 314Shareholder Return 282 513 314 498 520 470 760 480 567 614 643

Return of Sales 136 270 190 215 211 195 314 219 218 219 220Return of Free Cash 131 143 119 97 77 91 133 113 92 95 95

Aggressively Returns Cash via Dividends amp Buybacks bull Solid Dividend of $104year or 31 yield

bull Is roughly 50 of Free Cash Flow

bull Has paid out 22 of revenues amp 113 of free cash as dividendsbuybacks in past 7 years

bull Management willing to use debt when stock is low

Paying Out 6-7 of market cap each year is

attractive to large income investors

LONG MXIM FAIR VALUE $39 (NOW $3381) Source Hedgeye Risk Management

HEDGEYE 40

Investment Thesis IRF shares an attractive smallmid-cap long with margin expansion and under-appreciated EPS upside opportunities We note the following (1) Growth Drivers International Rectifier (IR) has been investing in areas like power modules ($500 of

content in each Tesla) game consoles GaN amp next-gen Intel server platforms (Grantley) (2) The firm is mid-way through its fab restructuring process likely to benefit gross margins We see

300-400 bps of GM upside versus 2014 driving $045-$060 of EPS growth (3) Model has significant Earnings Leverage Investors should get visibility into $040 run rate EPS

quarters in 2014 and $050 run rate EPS quarters in 2015 better than expected (4) Others Growing Cash Return story with share repurchases possible (and eventually dividends)

May be an industry consolidator Shares are inexpensive at 11x PE (2015) w upside possible

LONG IRF FAIR VALUE $36 (NOW $2766)

Company Description International Rectifier designs and manufactures power transistors (FETs IGBTs) and analog power chips that control condition and convert electrical power for motor electronic lighting and automotive systems IR operates five segments including Power Management Devices (37 of sales) Energy Saving Products (16) Enterprise Power (13) Automotive (10) and High-RelAerospace (21) IR was founded in 1947 is headquartered in El Segundo California and employs more than 4100 people Competition includes FCS ONNN VSH DIOD IFX IXYS others

CY2013 CY2014E CY2015E CY2016ECY2016E

UPSIDE CASERevenues ($m) 1040 1151 1220 1280 1395YOY 47 106 60 49 90

Gross Margins 319 370 393 406 420Operating Exps ($m) 304 313 319 330 341Op Margins 27 99 131 148 176

Pro Forma EPS $009 $135 $190 $230 $300

Net Cash per Share $700 $864 $1079 $1322 $1392 We are $011 and $018 ahead of Street for CY2014 and CY2015

HEDGEYE 41

Key Revenue Growth Drivers IR has invested in a number of growth areas bull Automotive Has focused on top tier automotive power design wins 2014 likely to be a year of significant

growth for IRrsquos IGBTs into electrichybrid vehicles Has gt$500 of chip content in every Tesla bull Game console amp server IRrsquos enterprise server segment trending well due to strength in PS4 game consoles

and digital power management share gains in Intelrsquos Grantley server platform (vs recently acquired Volterra) bull Energy Efficient Appliances IRrsquos power modules

make air conditioners amp refrigerators more power efficient by allowing gradients of power usage (versus on or off) and driving EnergyStar compliance Many appliances will use IR solutions with China industrial consumption a key impact

bull Low Power FETs for the mobile handset market IR has not previously participated here

bull GaN IR has the leading technology position in next generation MOSFETS (a multi-billion revenue market) and is slowly ramping these new cutting edge solutions (5-10 year ramp)

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

Margins have more room to run due to structural changes bull Took old fabs offline and moved to fab-lite model IR has taken old capacity offline and

moved some production to foundries (fab-lite) ndash Utilizations rates now up to 80 (driving gross margins up) but revenue growth gt$300Mquarter

will drive utilizations gt90 and gross margins gt40 driving upside bull GM Sensitivity Each gross margin point drives $015 of EPS upside or ~$2 of stock value

Structural capacity changes and more mature sector mean that

margins should eclipse previous peaks (like many other chip firms)

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

More to go here Possible Gross Margin Upside Drivers ndash 200 bps from utilizations to 90+ ndash 200 bps from Mix of (ESP amp Grantley server) ndash 100 bps from Startup costs winding down ndash 100-150 bps from Newport Wales fab savings Net 300-400 bps of GM upside possible vs 2014

HEDGEYE 43

Leverage Earnings power shows IRF can work into $40s bull Structural changes in capacity and maturity

suggest margins can eclipse previous cycles bull New management (circa 2006) has made

long-haul business changes that are driving revenue margin amp profit good news

bull Significant financial and gross margin leverage exist as Utilizations rise to 90

bull Valuation Still Reasonable $36 Fair Value based on (1) a 18x EVSales (2014) (2) a 15x PE (calendar 2015) and (3) 8x EVEBITDA (calendar 2015)

Calendar Calendar Calendar Calendar Calendar2012 2013 2014 2015 2016

Revenues ($m) 994 1040 1151 1220 1280Gross Margin 271 319 370 393 406Gross Profit ($m) 269 332 426 479 520

Operating Expenses ($m) 329 304 313 319 330Operating Income ($m) -60 28 114 160 190Operating Margin -60 27 99 131 148

Interest Taxes Other ($m) 11 20 16 20 19Net Income ($m) -70 8 98 140 171Pro Forma EPS ($102) $011 $135 $190 $230Street PF EPS $124 $172 $210

Stock Price (at 15x PE) $28 $37 $43

Note We forecast IR to generate another $7share of cash over next three years increasing cash balances and helping push IRF fair value further

Note Net Cash per share to grow from $750 now to $13 exiting calendar 2016 providing valuation support (just over 2x forecasted net cash is still inexpensive)

HEDGEYE 44

LONG BRCM FAIR VALUE $47 (NOW $3686) BRCM Investment Thesis BRCM shares are seemingly rolling over amid post-Cellular Exit profit taking riskreward starting to get more attractive long here as we approach $35 1 Investors uncertain about Cellular exit Concern about Combo revenue loss limiting share price upside 2 Technology Leader in a number of chip IP areas including Datacenter Networking CableSat set top box

CableDSL Modem WifiBluetoothGPSNFC and related combo chips Presents sizable barriers to entry 3 Now a Cash Return Story Buyback ammo w $7B of cash generated in next 4 years amp only $21B market cap

bull Dividend payment likely to get meaningfully raised in Janrsquo15 towards $060-$070 per year 4 Valuation downright attractive only 115x90x PE 2015 (withwithout stock comp) and 23x EVS

Risks to BRCM Story bull Cellular-driven Wireless Combo

revenue atrophy risk is real 20 of $600M-700M annual sales already baked in our model

bull Datacenter (~9 of sales) might be overheating revenues were +50 in 4Q13 YOY indicating unsustainable strength or coming lumpiness

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

Gross Margin 516 491 506 508 521 525 529 544 542 542Op Margin 200 158 245 233 222 207 199 253 258 262Pro-Forma EPS $168 $122 $266 $289 $292 $272 $256 $325 $345 $365

Net Cash 1898 1929 3638 4009 2329 2977 4494 6150 7906 9752Dividends Paid 0 0 164 196 224 254 284 331 385 449Share Buybacks 1284 422 280 1168 33 597 300 420 441 463Note We are roughly in line with Street for 2014 and 2015 EPS Source Hedgeye Risk Management

HEDGEYE 45

LONG SLAB FAIR VALUE $58 (NOW $4885) SLAB Investment Thesis SLAB shares are richly valued however the firm has an attractive portfolio of proprietary value-add products is one of the few growth firms in Semis is an acquisition target and should have robust 2H14 financial and growth trends 1 Very robust IP and product portfolio focused on IoT (wireless MCUs sensors) internet infrastructure (timing

clocks power) amp wearable (watches fitness medical) Usually most integrated smallest solutions 2 One of the few lsquoTweenerrsquo growth stories in Semis As seen below Silicon Labs will grow revenues 82

since 2007 better than most firms in the sector and one of the few working towards $1B in sales 3 An Acquisition Target SLAB has great products has strong margins and would slot in nicely with other larger

analog firms seeking scale growth and IoT building blocks TXN INTC MXIM SWKS QCOM

Risks to SLAB Story bull Video market share very high future

growth to be more difficult (19 of sales) demod to help but risks remain

bull Shares already trade richly at 265x PE (2015 including stock comp) momentum or acquisition needed to move higher Note We are roughly in line with Street for 2014 and 2015 EPS

($M) 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017ERevenues 337 416 441 493 492 563 580 614 656 702 745YoY -27 23 6 12 0 15 3 6 7 7 6

Gross Margin 619 623 638 660 616 610 614 608 614 620 624Op Margin 189 234 252 257 192 207 188 188 200 210 219Pro-Forma EPS $134 $171 $237 $233 $180 $216 $203 $200 $230 $255 $280

Net Cash 573 325 435 366 325 198 199 325 406 478 540Share Buyback 0 284 20 140 110 62 26 15 40 60 80

HEDGEYE 46

INTC Investment Thesis Despite recent strength we think INTC is a long-term structural short trading vehicle given little PC unit growth (andor shrinkage) more compute moving to ARM (handsetstablets) and our view that Intel will not gain much traction in mobile ARM competitors will likely encroach on Intelrsquos core x86 PC market with much lower ASPs in a slow and protracted battle (1) More client compute moving to ARM-based platforms (handsets amp tablets) not to IA (MS Office on iTunes) school

kids using tabletsiPads not PCs Meanwhile INTC rallies as PC unit shipments stabilize (for now) (2) Innovation track record poor beyond CPU design process amp manufacturing Intelrsquos track record is poor on most

projects beyond CPU manufacturing and process scaling No real cellular success (10 years of effortcost) McAfee is not the security leader no mega-healthcare wins no cable set top box wins no CE wins no good tablets etc

(3) Gross margins may eventually be at risk as Depreciation catches up to Capex What goes in must come out and Intel has been overspending for years It is possible that Gross Margins could compress some here

(4) Positives EPS power up with latest guidance revision (so dividend is safer again) Datacenter strength coming in 2H14 with Grantley New CEO driving changes 30 dividend yield slow bleed down leads to trading opportunities

NEUTRAL INTC FAIR VALUE $31 (NOW $3093)

Company Description Intel Corp is the worldrsquos largest chip firm and supplier of PC microprocessors Intel has about 90 unit share in the PC CPU market though lacks similar share in handsets or tablets The firm also produces communication chips embedded chips and NORNAND flash chips Intel founded in 1968 is based in Santa Clara CA and employs 108000 people

($M) 2010 2011 2012 2013 2014E 2015E 2016E 2017ERevenues $43623 $54109 $53341 $52708 $54858 $55870 $55958 $56156YoY 24 24 -1 -1 4 2 0 0

Gross Margin 650 637 632 616 632 626 624 622Op Margin 355 341 291 261 281 281 276 272Pro Forma EPS $197 $254 $224 $211 $230 $235 $235 $235

Net Cash $23842 $9204 $9450 $14616 $15085 $17868 $20504 $23104Dividends 3503 4127 4349 4479 4718 4962 5115 5265Repurchases 2250 14133 4765 2147 2180 2000 2000 2000

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

120PC Unit Shipments (mu) Shipments YOY

PC Units not really growing anymore and could shrink again while shares rally

bull PC market stagnant as more compute moves to ARM tabletsphones (MS Office for iPads) Market can grow again but likely not much

bull Meanwhile shares are rallying as this negative shrinkage gap closes (and we get back to no PC unit shrinkage in 2H14)

bull Shares look strong perhaps toppy and we think shares tilt short from here much more than long $34 is Full Value at 14x PE multiple and giving INTC many benefits of the doubt PC Sales Could Weaken Again

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

Gross MarginOperating Margin

HEDGEYE 48

2012 2013 2014 2015 2016 2017CapEx ($M) 11027 10711 11056 11056 11296 11456Depreciation ($M) 6388 6783 7300 7920 8240 8560

YOY 243 62 76 85 40 39

Depreciation of Sales 120 129 133 142 147 152Gross Margin Drag YOY 25 09 04 09 05 05

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

16000 Revenues ($Mqtr)Capex of Revenues

What Goes In Must Come Out ndash Ramping depreciation likely a gross margin headwind bull We believe Intel has been over-investing in capacity w Capex charges at 20 of revs for sustained years This will

likely weigh on gross margin in each of the next three years bull Proprietary depreciation model derives drag (I worked in capex finance at Intel in 2001-2002) bull We think the Street does NOT understand the 2015 amp 2016 depreciation impacts

Intel has never had a sustained (four-year) period of Capex ~20 of revenues

drives under-appreciated gross margin risks

HEDGEYE 49

Trying to break into value tablet segment (non-Apple) for years now bull 150 bps gross margin impact from tablets in 2014 It is material to how we view the stock

bull This strategy could backfire Technically this is a BOM cost equalizer payment from Intel to OEMs with Intel saying the penalty shrinks in half by year end and more over time But Intel has a bad track record in tabletssmartphones because Intelrsquos products are not as good as Qualcommrsquos products When Intelrsquos tablet subsidy is gone the customers will likely leave too

150 bps of gross margin is not immaterial ($800M)

Tablet chips only cost about $25-$30 so Intel is giving these next 30m units away for free Why canrsquot Intel win real business versus Qualcomm or even Nvidia Lack of innovation lack of good software lack of

customer-centric thinking

$M 2014Gross Margin Impact 150Gross Profit Impact $810

2014 Tablet Goal 402013 Tablet Shipments 10New 2014 tablet shipments 30

Subsidy per tablet $27

HEDGEYE 50

NEUTRAL TXN FAIR VALUE $52 (NOW $4776) TXN Investment Thesis TXN shares are a massive Cash Return and Gross Margin leverage story It seems distis are re-stocking here in 2Q14 helping loadings but fab utilizations remain low and a source of likely future GM expansion (towards 60) TXN could earn close to $400 out in time and investors are thrilled the firm is returning ALL of its Free Cash Flow bull Gross margins on the rise TXN has much inexpensive capacity installed with $18B of annual revenue

capacity vs our $13B sales estimate (2014) As revenues rise we expect a 75 cash fall through to gross profit plus the impact from falling depreciation We see 60 GMs at $3-5B-$36B in quarterly sales a plus

bull Business trends robust Disti re-stocking occurring now TXN gave strong 2Q14 sales guidance and hinted 3Q14 would grow again We think chip shipments are now tracking above consumption levels with Disti re-stocking happening now in 2Q14 and 3Q14 This makes us wonder how long this semi rally will last

bull Returning all Free Cash a smash TXN shares are straight up over past year as its cash return policies drive investor upside We think others will follow suit here

bull Valuations in line but prefer MXIM TXNrsquos valuations are normal at a 15x PE (2015) amp 40x EVSales (2014) a slight premium vs MXIMrsquos 14x PE amp 36x EVS We like MXIMrsquos higher 30 div yield amp growth opportunities

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 13834 12501 10428 13966 13736 12825 11999 13055 13800 14235 14795Gross Margin 530 500 479 536 494 496 513 568 590 607 616Op Margin 253 215 211 315 249 210 232 310 344 361 372Pro Forma Income 2641 2004 1615 3116 2531 1918 2143 2867 3355 3607 3851Pro Forma EPS $183 $151 $128 $254 $213 $165 $189 $260 $310 $340 $370

Net Cash on Hand 3191 3193 3562 3525 3200 4180 4045 4911 5772 6610 7325Debt 0 0 0 0 4211 4186 4158 4652 4652 4652 4652

Free Cash Flow 3720 2563 1890 2621 2442 2916 2972 3213 3727 3873 3927Dividends 425 537 567 592 644 819 1175 1310 1430 1529 1631Share Repurchases 4885 2165 954 2454 1973 1800 2868 2445 2184 2271 2362

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

NEUTRAL NVDA FAIR VALUE $18 (NOW $1838) NVDA Investment Thesis NVDA seems the best positioned PC chip firm selling broad-based and value add serverdatacenterauto products that are now half its firm value PC GPU sales seem steady for now catering to Gamers and feature client PC buyers but with near-term risks there bull Business Transformation Happening Nvidia invented innovative GPU products including Quadro (graphics

professional) Tesla (serverbig-iron) and Grid (cloud GPU) has been seeding the global developer ecosystem for years driving higher margins and sustainable barriers to entry This is much of the value of the firm

bull Cash Return Story NVDA returning $1B seems able to make big dividend hike (Janrsquo15) or more big buybacks bull Client GPU seems more stable given it is a gamingfeature sub-set of PCs We are still skeptical here but

NVDA has done very well at holding client GPU pricing amp units these go into gaming PCs (less tied to console cycle) and feature-rich client PCs for differentiation

Risks to NVDA Shares bull Near-term client PC GPU risks

have been discussed in press Could keep a lid on shares for now but this seems less important than growth in Quadro Tesla amp Grid

bull $038 of EPS risk as Intel Royalty payments unwind in Aprrsquo17 Source Hedgeye Risk Management

(Calendar $M) 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017ERevenues 4098 3425 3326 3543 3998 4280 4130 4474 4655 4966 5188

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

Gross Margins 46 40 39 45 52 52 55 54 54 55 54Op Margins 24 9 7 11 17 16 16 17 16 17 17EPS (ex Stock Comp) $156 $054 $040 $064 $098 $096 $099 $110 $115 $130 $133

Net Cash 1809 1255 1728 2491 3130 3728 3315 3026 3030 3005 2892Dividends Paid 0 0 0 0 11 47 181 190 260 300 339Share Buybacks 553 424 0 0 0 100 887 900 440 484 532

HEDGEYE 53

EVSales Multiples Resulting Stock Value2014 2015 2016 2014 2015 2016

Client PC GPUs 100 095 090 $46 $44 $42Quadro Workstation 30 27 24 $46 $47 $47Tesla (Server) 40 35 30 $15 $19 $22Grid (GPU Cloud) 60 53 45 $00 $05 $11Tegra Client 22 19 16 $15 $13 $11Tegra Auto 50 45 40 $13 $18 $21Other 05 05 05 $03 $03 $03Net Cash (after tax) $44 $44 $44Total 172 172 168 $1818 $1915 $2004

NEUTRAL NVDA FAIR VALUE $18 (NOW $1838)

NVDA Valuation Mostly Full Fair Value today is ~$18 or roughly 17x PE (2015) Valuing NVDA requires adjusting for Intel Royalty Payments amp Stock Comp bull PE 18x and 17x PE (CY14 and CY15 respectively this includes stock comp adjusts out much

of the Intel Royalty payment and excludes net cash) bull EVEBITDA 11x EVEBITDA (CY14 and CY15 same formula as above) this is certainly not

inexpensive but not egregious either bull EVSales16x EVSales (CY14)

Key Conclusions bull NVDA shares could run to the low- to

mid-$20s should any of its growth products really take off or with GM expansion

bull Our lsquoSum of the Partsrsquo Analysis values NVDA at $18-$20 plus growing cash balances and dividends not factored

HEDGEYE 54

NEUTRAL ONNN FAIR VALUE $11 (NOW $909) ONNN Investment Thesis ONNN shares are a value but we prefer IRF for now We note ONNNrsquos high-beta behavior could drive a sell-off towards $8 if Semis correct (a better entry) If Semis do not correct or if business ramps sizably in 2H14 then ONNN shares are likely headed above $10 We could get positive on ONNN once sector correction visibility improves bull MampA Action Jackson After acquiring Sanyo in early 2010 (and seeing challenges) ON now acquires image

maker Aptina ($532M in TTM sales) for $400M cash ON says $008 amp $010 EPS accretive in 2015 amp 2016 bull Business trends seem to be picking up in 2H14 ON management talked about its strongest order activity in

more than two years for 2H14 and we are encouraged its non-Sanyo businesses can pick up nicely a plus bull Sanyo and Gross Margins remain challenged Management seems to have backed off of its target of 40

GMs at $800M in revenues Similarly ONrsquos Sanyo business has seen revenues fall below its $150Mqtr floor

Note We are $005 and $007 better than Street EPS for 2014 and 2015 respectively Source Hedgeye Risk Management

bull ON can continue to consolidate industry or eventually initiate dividends or buybacks in 2016-2017 On has built solid scale with almost $4 billion in annual sales

bull Valuations attractive We include Aptina in our estimates ONNN trades at 11x9x PE (20142015) 7x6x EVEBITDA (20142015) and 14x12x EVSales (20142015)

($M) 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017ERevenues 1566 2055 1769 2313 3442 2895 2783 3179 3717 3875 4060YoY 2 31 -14 31 49 -16 -4 14 17 4 5

Gross Margin 374 398 359 418 348 333 339 360 363 373 378Op Margin 176 160 119 191 133 90 104 135 141 156 163PF Income 241 287 164 396 405 213 252 376 461 544 603PF EPS $079 $075 $038 $090 $088 $047 $056 $085 $105 $125 $140

Net Cash (885) (711) (356) (266) 65 (27) (135) (420) 35 551 1114Dividends 0 0 0 0 0 0 0 0 0 0 0

HEDGEYE 55

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues ($m) 1093 1164 901 1450 1336 1283 1317 1432 1547 1658 1771Gross Margins 773 769 748 783 767 753 758 769 778 782 786Op Margins 481 474 410 520 488 476 499 511 526 535 544Pro Forma Income 427 440 279 534 513 434 493 563 632 688 745Pro Forma EPS $149 $181 $112 $231 $220 $184 $206 $230 $255 $275 $295

Net Cash on Hand (893) (600) (343) (28) 242 483 880 903 1196 1534 1929Debt (1700) (1500) (1286) (776) (796) (816) (838) (843) (843) (843) (843)

SHORT LLTC FAIR VALUE $44 (NOW $4668) LLTC Investment Thesis LLTC does everything right as a firm and a stock with industry high gross amp operating margins and a great track record of stability profitability and growing shareholder returns But doing everything right means there is little left to improve Gross and operating margins are already very high and LLTC trades at a 30 PE multiple premium versus MXIM We prefer MXIM in the analog space and note LLTCrsquos high 18x PE leaves little upside left bull Margins already on the moon LLTC is the most profitable chip firm in the world on a margin basis with both

Gross amp Operating margins leading the industry We bow with respect but note the obvious that there is little left to improve as OM grows beyond 50

bull Shareholder Returns significant LLTC is a leader in dividend payments increasing its dividend every year for more than 20 years now The firmrsquos 2014 dividend is roughly 18 of sales and 62 of Free Cash very solid

bull Valuation somewhat rich prefer MXIM We note LLTC trades at 185x PE (2015 including stock comp) and 75x EVSales (2014) LLTC trades at a 30 PE multiple premium versus MXIM (14x 2015) even though MXIM pays more out in dividends (30 yield versus LLTCrsquos 23 yield) and in share buybacks Our Short thesis on LLTC is a relative not absolute call

FOR MORE INFORMATION CONTACT US AT

SALESHEDGEYECOM (203) 562-6500

Slide Number 1
Slide Number 2
Slide Number 3
Semiconductors Power Your World
About Craig Berger CFA CPA
Our approach drives value
Our Differentiated Insights
Semis Sector Coverage Plan
Sector view We are constructive on chip firmsrsquo fundamentals cognizant stocks have had a huge run with possible profit taking
Semiconductor Coverage summary
Slide Number 11
SOX Dashboard Still tilts Modestly positive
SOX Still tilt positive but Much Now baked
Industry fundamentals still positive but re-stocking now happening MacroFed Dependent and Much baked
2q14 DISTIS NOW REPLENISHING INVENTORY PC days UP
1q14 Industrial amp pc inventory ticking higher
Chip Firmsrsquo Margins Near all-time Highs
Chip Earnings and Revenues toohellip
Thus Net Cash at all time highshellip
Hedgeye chip stack Dividend Analysis
So Dividends are Growing Nicelyhellip
hellip And so are share repurchases
Firms Returning cash to shareholders
Txn cash return poster child
Predicting big dividend hikes alpha
Hedgeye Chip stack acquisition roundup
Mampa activity heating up provides a bid
Forecasted Mampa activity bY Bucket
Hedgeye Chip Stack Key Stock Picks
Semiconductor Stock Call Summary
Long QCOM FAIR VALUE $95 (now $79)
Long MXIM FAIR VALUE $39 (now $3381)
Long IRF FAIR VALUE $36 (now $2766)
Long BRCM FAIR VALUE $47 (now $3686)
Long SLAB FAIR VALUE $58 (now $4885)
Neutral INTC fair value $31 (now $3093)
Slide Number 48
Neutral TXN fair value $52 (now $4776)
Neutral nvda fair value $18 (now $1838)
Neutral onnn fair value $11 (now $909)
Short LLTC fair value $44 (now $4668)
Slide Number 56

Page 2: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 2

DISCLAIMER Hedgeye Risk Management is a registered investment advisor registered with the State of Connecticut Hedgeye Risk Management is not a broker dealer and does not provide investment advice for individuals This research does not constitute an offer to sell or a solicitation of an offer to buy any security This research is presented without regard to individual investment preferences or risk parameters it is general information and does not constitute specific investment advice This presentation is based on information from sources believed to be reliable Hedgeye Risk Management is not responsible for errors inaccuracies or omissions of information The opinions and conclusions contained in this report are those of Hedgeye Risk Management and are intended solely for the use of Hedgeye Risk Managementrsquos clients and subscribers In reaching these opinions and conclusions Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Managementrsquos employees which is based upon sources considered credible and reliable within the industry Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied

TERMS OF USE This report is intended solely for the use of its recipient Re-distribution or republication of this report and its contents are prohibited For more details please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at wwwhedgeyecom

DISCLAIMER

HEDGEYE 4

HEDGEYE 5

HEDGEYE 6

HEDGEYE 7

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 3: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 4

HEDGEYE 5

HEDGEYE 6

HEDGEYE 7

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 4: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 5

HEDGEYE 6

HEDGEYE 7

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

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60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

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50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 5: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 6

HEDGEYE 7

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 6: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 7

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 7: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 8

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 8: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 9

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 9: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 10

Rating PriceFair

2014 EVS

2014 PE

2015 PE

2014 EVEBITDA

Annual Dividend

2014

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 10: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 11

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 11: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 12

Impact FactorsFrom

-5 to +5 Comments

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 12: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 13

0

100

200

300

400

500

600

700

800

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 13: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 14

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 14: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 15

0

10

20

30

40

50

0

9

18

27

36

45

0

10

20

30

40

50

60

70

0

16

32

48

64

80

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 15: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 16

0

16

32

48

64

80

EMS Inventory Days

0

20

40

60

80

0

10

20

30

40

50

60

0

5

10

15

20

25

30

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 16: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 17

-10

0

10

20

30

40

50

60

Gros

s amp O

pera

ting

Mar

gin

Sector Gross Margin

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 17: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 18

-60

-40

-20

0

20

40

60

80

0

10000

20000

30000

40000

50000

60000

$M p

er Q

uart

er

(20000)

(15000)

(10000)

(5000)

0

5000

10000

15000

$M p

er Q

uart

er

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 18: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 19

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

$M

data set

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 19: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 20

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 20: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 21

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

0

500

1000

1500

2000

2500

3000

3500

$M p

er Q

uart

er

INTC (39) QCOM (21) TXN (11) ADI (4)

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 21: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 22

0

1000

2000

3000

4000

5000

6000

7000

8000

$M p

er Q

uart

er

0

2000

4000

6000

8000

10000

12000

$M o

f Ret

urn

per Q

uart

er

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 22: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 23

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

QCO

M

INTC

TXN

SND

K

NVD

A

NXP

I

MXI

M

BRCM AD

I

ALTR

XLN

X

MRV

L

STM

LLTC

AVG

O

MCH

P

SWKS

ATM

L

ON

NN

$M p

er Y

ear

$M

TTM Dividends

Total Shareholder

Return ($M TTM)

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 23: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 24

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 24: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 25

Dividend Yield

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 25: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 26

($M TTM)

Earnings

Net Cash on Hand

($M)

Earnings Current

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 26: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 27

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 27: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 28

Sub-Scale (0-5)

Desirable IP (0-5)

Net Debt (-2 or -1)

or Net Cash (0-1)

Margin (0-5)

Other Factors

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 28: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 29

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 29: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 30

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 30: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 31

TickerLong Short

PriceFair

Market Cap ($B)

Dividend Yield

Thesis

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 31: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 32

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 32: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 33

CY2014 (013113)

CY2014 (82713)

CY2014 Now

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 33: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 34

wearables ramp

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 34: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 35

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Shar

ehol

der R

etur

n ($

M)

Share Repurchases

Dividends

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 35: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 36

Net Cash 1155 925 839 798 817 1030 1150 1341 1539 1733 1923

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 36: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 37

0

5

10

15

20

25

30

35

40

MXI

M S

hare

Pric

e

0

20

40

60

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 37: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 38

-36

-18

0

18

36

54

72

0

50

100

150

200

250

right now

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 38: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 39

0

500

1000

1500

2000

2500

0

100

200

300

400

500

600

700

800

Net

Cas

h on

Han

d ($

M)

Cas

h Fl

ow ($

M)

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 39: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 40

CY2013 CY2014E CY2015E CY2016ECY2016E

Pro Forma EPS $009 $135 $190 $230 $300

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 40: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 41

0

5

10

15

20

25

30

IRF S

hare

Pric

e

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

40

60

80

100

0

10

20

30

40

50

60

70

Mar

-96

Mar

-97

Mar

-98

Mar

-99

Mar

-00

Mar

-01

Mar

-02

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

HEDGEYE 48

YOY 243 62 76 85 40 39

4

8

12

16

20

24

28

32

36

0

2000

4000

6000

8000

10000

12000

14000

HEDGEYE 49

HEDGEYE 50

HEDGEYE 51

0

10

20

30

40

50

60

TXN

Sha

re P

rice

HEDGEYE 52

YOY 34 -16 -3 7 13 7 -4 8 4 7 45

HEDGEYE 53

HEDGEYE 54

HEDGEYE 55

Slide Number 1
Slide Number 2
Slide Number 3
Slide Number 11
Slide Number 48
Slide Number 56

Page 41: CHIP STACK TIMES: SEMICONDUCTORSdocs.hedgeye.com/HE_SemiconductorsLaunch_JUL2014.pdf · • Semiconductor sector: Dividend and Share Repurchase cash return story in play • Merger

HEDGEYE 42

-40

-30

-20

-10

0

10

20

30

40

50

60

Op Margin

Gross Margin

HEDGEYE 43

HEDGEYE 44

($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

HEDGEYE 45

HEDGEYE 46

HEDGEYE 47

0

5

10

15

20

25

30

35

INTC

Shar

e Pr

ice

-18

-9

0

9

18

27

36

0

20

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100

0

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-96

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-97

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-98

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-99

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YOY 243 62 76 85 40 39

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($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

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YOY 243 62 76 85 40 39

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($M) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Revenues 4658 4490 6818 7389 8006 8305 8238 8357 8734 9205YOY 23 -4 52 8 8 4 3 1 5 5

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HEDGEYE 46

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Mar

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YOY 243 62 76 85 40 39

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HEDGEYE 52

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