BRI: Semiconductors – Analog Renaissance 2.0: Semis You Can Own Through the Next Four Cycles

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Semiconductors – Analog Renaissance 2.0: Semis You Can Own Through the Next Four Cycles

Jefferies revisited the firm’s Analog Renaissance report from 2017 and sees the drivers for analog semiconductors as long-lasting and secular. In addition, the industry is consolidating faster than expected, but the firm sees room for more as the Herfindahl Index for total analog is still “unconcentrated.”  The ongoing shift to the Internet of Things (IoT) from the highly concentrated PC/handset market is a positive as customers are much more fragmented, a positive for semi pricing power. Jefferies’ forecasts for Franchise Pick TXN are already ahead of consensus and the firm’s three-year EPS bull case for the company is $8.09, helped by these secular forces, as well as the high percentage of manufacturing done in house.  FULL REPORT

— Mark Lipacis, Semiconductors