Nomura Securities on U.S. Semiconductors: China Telecom Guiding Wireless Capex Down

Nomura Securities on U.S. Semiconductors: China Telecom Guiding Wireless Capex Down

Analyst, Romit Shah, said, "China Telecom (CT) (NYSE: CHA) provided 2012 capex guidance yesterday, and we believe the implications for the PLDs and Broadcom (Nasdaq: BRCM)(Buy, PT $45) are significant...CT indicated that total capex will increase 8% YoY to CNY 54bn, inline with our colleague Danny Chu's estimate. However, wireless capex will decline 14% y/y to CNY 19bn. This forecast is being driven by CT’s lowered expectations of net-adds and weak ARPU...This forecast comes on the heels of an update from China Mobile (CM)(NYSE: CHL), which guided mobile capex to decline (-26% y/y) in FY12."

"While sales should recover in the June quarter, we think the updates from CT and CM would seem to contradict investor expectations for Altera (Nasdaq: ALTR) and Xilinx (Nasdaq: XLNX) to snap back in Q2."

"We believe the strength in broadband is positive for Broadcom, which acquired BroadLight yesterday."

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