Barclays Explores The Semiconductor Space, Says The RF 'Golden Age' Is Losing Luster

In a report published Tuesday, Barclays analyst Blayne Curtis previewed the semiconductors space heading in to the first quarter earnings season.

According to Curtis, semiconductor firms are expected to report "largely better" results and guidance but some softness in PCs and China may be seen. Intel Corporation INTC already negatively pre-announced so any further PC weakness should not be much of a surprise.

Turning to China, Curtis noted that the smartphone market saw a greater than expected correction in the first quarter after a strong end to 2014. As such, this could temper some of the high-end strength from Apple Inc. AAPL and Samsung Electronics Co Ltd.

Analog Trends Are Strong

Curtis stated that trends in Analog are "strong" but investors should sell names without specific second half 2015 catalysts. With downstream industrial datapoints negative, the analyst sees the potential for softness to magnify in the bottom half of 2015 and investors should sell and "go away in May."

Related Link: The Latest 'Apple Barometer' Is In

RF Golden Age Losing Luster

The China market is seeing a correction in the first quarter with supply chains likely down 20 percent quarter-over-quarter. The analyst noted another wave of builds, but this will only be apparent in the second half of 2015 and rebounding back to levels seen at the end of last year. As such, the analyst doesn't expect any material increase at Apple as some have called for.

Most Interesting Ideas

Curtis offered a brief list of his "most interesting ideas" through earnings:

• Cavium Inc CAVM is a top pick with its core business driving a beat and raise.
• Cirrus Logic, Inc. CRUS is expected to report a beat and raise on Galaxy S6 ramp with higher content in the iPhone 6 driven by "always on" audio.
• Qorvo Inc's QRVO second quarter guidance could disappoint given China softness.
• Skyworks Solutions Inc SWKS's estimates are "safe" but a lack of material estimate raise could compress its multiple.