Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>DOW +0.59%, Russell -1.06%, SPX -1.39%, Nasdaq -2.77%, SOX -6.81% as investors shifted from growth to value stocks. UST10 was flat at 4.16%, and the yen strengthened to Y156.18.</li>
<li>Commodities were mixed with copper -0.3%, nickel -0.83%, and Brent +1.72%. Energy and consumer staples rose, with VSF +13.6% after Essilor Luxottica agreed to buy Supreme. US homebuilders lost ground. </li>
<li>Tech stocks fell sharply after ASML's earnings missed estimates and news of potential US export restrictions to China. Focus on SPE names with high China exposure as shorts.</li>
</ul>


DOW +0.59%, Russell -1.06%, SPX -1.39%, Nasdaq -2.77%, SOX -6.81% as investors shifted from growth to value stocks. UST10 was flat at 4.16%, and the yen strengthened to Y156.18.
Commodities were mixed with copper -0.3%, nickel -0.83%, and Brent +1.72%. Energy and consumer staples rose, with VSF +13.6% after Essilor Luxottica agreed to buy Supreme. US homebuilders lost ground. 
Tech stocks fell sharply after ASML's earnings missed estimates and news of potential US export restrictions to China. Focus on SPE names with high China exposure as shorts.


Japan Morning Connection – 18 July, 2024

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> is forecasted to experience slight growth in 3Q24 compared to 2Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  </li>
<li>The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.</li>
</ul>



Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.  

Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  
The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.


MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>Significant revenue guidance hike -- TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed 'mid-20's' percent, a significant hike from previous guidance.</li>
<li>Management is low-balling LT margins -- Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.</li>
<li>Signs of Apple expecting strong iPhone 16 sales -- TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.</li>
</ul>


Significant revenue guidance hike -- TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed 'mid-20's' percent, a significant hike from previous guidance.
Management is low-balling LT margins -- Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.
Signs of Apple expecting strong iPhone 16 sales -- TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.


We See TSMC's Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up

<ul>
<li>TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.</li>
<li>The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.</li>
<li>A16 will enter MP in 2H26, and it's first process starts adopting backside power.</li>
</ul>


TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.
The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.
A16 will enter MP in 2H26, and it's first process starts adopting backside power.


TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line, and GM Could Be Better.

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

Sino American Silicon Products / Equity Bottom-Up

<ul><li>GlobalWafers secures $400M of CHIPS Act funding; boosting semiconductor production capacity and technological advancements.</li><li>Acer targets India's booming smartphone market with a white-label strategy; aiming to capitalize on the growing demand.</li><li>Qualcomm collaborates with Microsoft to revolutionize PCs in the AI era; promising groundbreaking advancements in affordable chip designs.</li></ul>

GlobalWafers secures $400M of CHIPS Act funding; boosting semiconductor production capacity and technological advancements.Acer targets India's booming smartphone market with a white-label strategy; aiming to capitalize on the growing demand.Qualcomm collaborates with Microsoft to revolutionize PCs in the AI era; promising groundbreaking advancements in affordable chip designs.

Tech Supply Chain Tracker (17-Jul-2024): GlobalWafers gets $400M CHIPS Act funding.

Taiwan

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

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TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

Japan Morning Connection – 18 July, 2024

Investors shift from growth to value stocks, tech stocks fall on ASML earnings miss and US export restrictions to China, VSF surges after Essilor...

Andrew Jackson

MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...

Patrick Liao

We See TSMC's Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up

TSMC raises revenue guidance significantly for 2024E. We also see many signs that TSMC can earn higher LT margins than it is guiding. TSMC shows...

Vincent Fernando, CFA

TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line, and GM Could Be Better.

TSMC anticipates mid-20% sales growth in USD for 2024, with tight N3/N5 capacity and plans for N2 to enter MP in 4Q25. A16 set to enter MP in 2H26...

Patrick Liao

Tech Supply Chain Tracker (17-Jul-2024): GlobalWafers gets $400M CHIPS Act funding.

GlobalWafers secures $400M from CHIPS Act, Samsung targets wearable sales, ASML sees high demand, Acer eyes India market, Qualcomm/Microsoft...

Tech Supply Chain Tracker

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Morning Connection – 18 July, 2024

​Investors shift from growth to value stocks, tech stocks fall on ASML earnings miss and US export restrictions to China, VSF surges after Essilor...

Andrew Jackson

MediaTek (2454.TT): 3Q24 Might Grow Slightly QoQ, While AI PCs Could Be Delivered in 2H25.

​Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...

Patrick Liao

We See TSMC's Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up

​TSMC raises revenue guidance significantly for 2024E. We also see many signs that TSMC can earn higher LT margins than it is guiding. TSMC shows...

Vincent Fernando, CFA

TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line, and GM Could Be Better.

​TSMC anticipates mid-20% sales growth in USD for 2024, with tight N3/N5 capacity and plans for N2 to enter MP in 4Q25. A16 set to enter MP in 2H26...

Patrick Liao

Tech Supply Chain Tracker (17-Jul-2024): GlobalWafers gets $400M CHIPS Act funding.

GlobalWafers secures $400M from CHIPS Act, Samsung targets wearable sales, ASML sees high demand, Acer eyes India market, Qualcomm/Microsoft...

Tech Supply Chain Tracker

Investors shift from growth to value stocks, tech stocks fall on ASML earnings miss and US export restrictions to China, VSF surges after Essilor...

Mediatek Inc expected to see slight growth in 3Q24, while AI PCs are anticipated to delivered in 2H25. The shipment forecast for the Dimensity...

TSMC raises revenue guidance significantly for 2024E. We also see many signs that TSMC can earn higher LT margins than it is guiding. TSMC shows...

TSMC anticipates mid-20% sales growth in USD for 2024, with tight N3/N5 capacity and plans for N2 to enter MP in 4Q25. A16 set to enter MP in 2H26...