Analog Semiconductors Stocks Q2 In Review: Power Integrations (NASDAQ:POWI) Vs Peers

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the analog semiconductors stocks, including Power Integrations (NASDAQ:POWI) and its peers.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 15 analog semiconductors stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 1.2% below.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

In light of this news, analog semiconductors stocks have held steady with share prices up 3.4% on average since the latest earnings results.

Power Integrations (NASDAQ:POWI)

A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ:POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.

Power Integrations reported revenues of $106.2 million, down 13.8% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with a significant improvement in its inventory levels but underwhelming revenue guidance for the next quarter.

Interestingly, the stock is up 1.1% since reporting and currently trades at $64.92.

Read our full report on Power Integrations here, it’s free.

Best Q2: Himax (NASDAQ:HIMX)

Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.

Himax reported revenues of $239.6 million, up 2% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a significant improvement in its gross margin.

The market seems happy with the results as the stock is up 8% since reporting. It currently trades at $6.33.

Is now the time to buy Himax? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Microchip Technology (NASDAQ:MCHP)

Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.

Microchip Technology reported revenues of $1.24 billion, down 45.8% year on year, in line with analysts’ expectations. It was a softer quarter as it posted underwhelming revenue guidance for the next quarter and a decline in its operating margin.

Microchip Technology delivered the slowest revenue growth in the group. As expected, the stock is down 6.3% since the results and currently trades at $79.17.

Read our full analysis of Microchip Technology’s results here.

Vishay Intertechnology (NYSE:VSH)

Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.

Vishay Intertechnology reported revenues of $741.2 million, down 16.9% year on year. This number lagged analysts' expectations by 1.7%. Overall, it was a softer quarter as it also produced underwhelming revenue guidance for the next quarter and a decline in its operating margin.

Vishay Intertechnology had the weakest performance against analyst estimates among its peers. The stock is down 14.3% since reporting and currently trades at $18.39.

Read our full, actionable report on Vishay Intertechnology here, it’s free.

Skyworks Solutions (NASDAQ:SWKS)

Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.

Skyworks Solutions reported revenues of $905.5 million, down 15.5% year on year. This print was in line with analysts’ expectations. Aside from that, it was a slower quarter as it logged a decline in its operating margin and an increase in its inventory levels.

The stock is down 16.2% since reporting and currently trades at $98.65.

Read our full, actionable report on Skyworks Solutions here, it’s free.

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