Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Smartphone 2024 small growth about +5% YoY. PC 2024 small unit growth +4%. Don’t expect much better in 2025 but the Silicon content will increase, both for processor and DRAM.</li>
<li>Lots of cuts in 2025 Semiconductor Capex. TSMC is up but Samsung, UMC, Intel down. Japan Semi Equipment association has revised down 2025 growth from 10% to 5%.</li>
<li>Cloud Capex booming. Microsoft announced US$80bn in FY25. Meta at US$60-65bn. TSMC to increase 5-3nm wafer price by 5-10%. The Ai segment of semiconductors is doing extremely well</li>
</ul>


Smartphone 2024 small growth about +5% YoY. PC 2024 small unit growth +4%. Don’t expect much better in 2025 but the Silicon content will increase, both for processor and DRAM.
Lots of cuts in 2025 Semiconductor Capex. TSMC is up but Samsung, UMC, Intel down. Japan Semi Equipment association has revised down 2025 growth from 10% to 5%.
Cloud Capex booming. Microsoft announced US$80bn in FY25. Meta at US$60-65bn. TSMC to increase 5-3nm wafer price by 5-10%. The Ai segment of semiconductors is doing extremely well


Tech News: Smartphone and PC Stabilize. Semicon Capex Cuts. Cloud Capex Up. TSMC Increasing Prices.

<ul>
<li>News or rumors of Nvidia, AMD, Broadcom cutting down CoWoS orders at TSMC have been flying around since last week (Taiwan media, some sell-side analysts).</li>
<li>TSMC guided for AI revenues doubling in 2025. Nvidia’s CEO clarified that CoWoS-S orders are declining because CoWoS-L is increasing. This transition has been known for over 1 year.</li>
<li>TSMC is converting CoWoS-S to L and adding capacity in Tainan Science Park phase 2 &amp; 3. In 2024, CoWoS-L was ~10% of CoWoS output, increasing to 50-60% in 2025.</li>
</ul>


News or rumors of Nvidia, AMD, Broadcom cutting down CoWoS orders at TSMC have been flying around since last week (Taiwan media, some sell-side analysts).
TSMC guided for AI revenues doubling in 2025. Nvidia’s CEO clarified that CoWoS-S orders are declining because CoWoS-L is increasing. This transition has been known for over 1 year.
TSMC is converting CoWoS-S to L and adding capacity in Tainan Science Park phase 2 &amp; 3. In 2024, CoWoS-L was ~10% of CoWoS output, increasing to 50-60% in 2025.


TSMC Order Cut Rumors: Keep Calm and Ignore the Rumors.

<ul>
<li>4Q24 beat Consensus by ~4%, 1Q25 guidance ~7% above Consensus at OP level.</li>
<li>2025 revenue up mid-20%. AI revenues will double or more depending on capacity bottlenecks (2023 5%, 2024 15% of total revenues). 2025 Capex US$40bn, from 2024 30bn. </li>
<li>The stock is trading at 18.8x 2025 and 15.8x 2026 Consensus EPS.  This is cheap for the ~25% growth outlook over 2025-26.</li>
</ul>


4Q24 beat Consensus by ~4%, 1Q25 guidance ~7% above Consensus at OP level.
2025 revenue up mid-20%. AI revenues will double or more depending on capacity bottlenecks (2023 5%, 2024 15% of total revenues). 2025 Capex US$40bn, from 2024 30bn. 
The stock is trading at 18.8x 2025 and 15.8x 2026 Consensus EPS.  This is cheap for the ~25% growth outlook over 2025-26.


TSMC Results / Guidance Beat. 2025 Capex and AI Revenue up Strongly.

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

Silicon Motion Technology / Equity Bottom-Up

<ul>
<li>We engaged with the company recently -- SIMO remains in a strong position to capitalize on global increased need for high-end NAND memory controllers across mobiles, PCs, and enterprise AI.</li>
<li>SIMO’s strong positioning in the Client SSD market and its technology leadership in PCIe 5 SSD and MonTitan solutions provide significant growth opportunities into 2025E and beyond.</li>
<li>Reiterate Structural Long. Given the company's net cash balance sheet, depressed market price, and multi-year growth outlook, in our view a share buyback program would be accretive to shareholder value.</li>
</ul>


We engaged with the company recently -- SIMO remains in a strong position to capitalize on global increased need for high-end NAND memory controllers across mobiles, PCs, and enterprise AI.
SIMO’s strong positioning in the Client SSD market and its technology leadership in PCIe 5 SSD and MonTitan solutions provide significant growth opportunities into 2025E and beyond.
Reiterate Structural Long. Given the company's net cash balance sheet, depressed market price, and multi-year growth outlook, in our view a share buyback program would be accretive to shareholder value.


Silicon Motion: NAND Controller Leader; Positioned for a Transformative 2025E; Structural Long

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

<ul>
<li>Leaked Mediatek Chip Specs? -- Talk of a "Qualcomm Killer"</li>
<li>Hon Hai in the New York Times -- Why Foxconn is Investing in Texas &amp; Thailand</li>
<li>TSMC's Arizona 4nm Production On Track to Start 2H25E -- Still Expected to Be 30% Higher Cost vs. Taiwan and That's Okay</li>
</ul>


Leaked Mediatek Chip Specs? -- Talk of a "Qualcomm Killer"
Hon Hai in the New York Times -- Why Foxconn is Investing in Texas &amp; Thailand
TSMC's Arizona 4nm Production On Track to Start 2H25E -- Still Expected to Be 30% Higher Cost vs. Taiwan and That's Okay


Taiwan Tech Weekly: Leaked Mediatek Specs Spur Talk Of "Qualcomm Killer"'; TSMC on Track in Arizona

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.

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TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

Tech News: Smartphone and PC Stabilize. Semicon Capex Cuts. Cloud Capex Up. TSMC Increasing Prices.

Smartphone and PC small growth in 2024 and 2025, but Silicon content in processors and DRAM will increase. Semiconductor Capex cuts in 2025. Cloud...

Nicolas Baratte

TSMC Order Cut Rumors: Keep Calm and Ignore the Rumors.

Rumors of Nvidia, AMD, Broadcom cutting CoWoS orders at TSMC are debunked as TSMC transitions to CoWoS-L, expects a doubling of AI revenues in...

Nicolas Baratte

TSMC Results / Guidance Beat. 2025 Capex and AI Revenue up Strongly.

Company beats consensus, expects strong growth in 2025 with AI revenues doubling, stock trading at attractive multiples for projected growth.

Nicolas Baratte

Silicon Motion: NAND Controller Leader; Positioned for a Transformative 2025E; Structural Long

SIMO is well-positioned to capitalize on the growing demand for high-end NAND memory controllers. We believe a share buyback program could enhance...

Vincent Fernando, CFA

Taiwan Tech Weekly: Leaked Mediatek Specs Spur Talk Of "Qualcomm Killer"'; TSMC on Track in Arizona

Leaked Mediatek chip specs hint at potential rival to Qualcomm's flagship chips; Foxconn investing in Texas & Thailand; TSMC's Arizona production...

Vincent Fernando, CFA

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Tech News: Smartphone and PC Stabilize. Semicon Capex Cuts. Cloud Capex Up. TSMC Increasing Prices.

​Smartphone and PC small growth in 2024 and 2025, but Silicon content in processors and DRAM will increase. Semiconductor Capex cuts in 2025. Cloud...

Nicolas Baratte

TSMC Order Cut Rumors: Keep Calm and Ignore the Rumors.

​Rumors of Nvidia, AMD, Broadcom cutting CoWoS orders at TSMC are debunked as TSMC transitions to CoWoS-L, expects a doubling of AI revenues in...

Nicolas Baratte

TSMC Results / Guidance Beat. 2025 Capex and AI Revenue up Strongly.

​Company beats consensus, expects strong growth in 2025 with AI revenues doubling, stock trading at attractive multiples for projected growth.

Nicolas Baratte

Silicon Motion: NAND Controller Leader; Positioned for a Transformative 2025E; Structural Long

​SIMO is well-positioned to capitalize on the growing demand for high-end NAND memory controllers. We believe a share buyback program could enhance...

Vincent Fernando, CFA

Taiwan Tech Weekly: Leaked Mediatek Specs Spur Talk Of "Qualcomm Killer"'; TSMC on Track in Arizona

​Leaked Mediatek chip specs hint at potential rival to Qualcomm's flagship chips; Foxconn investing in Texas & Thailand; TSMC's Arizona production...

Vincent Fernando, CFA

Smartphone and PC small growth in 2024 and 2025, but Silicon content in processors and DRAM will increase. Semiconductor Capex cuts in 2025. Cloud...

Rumors of Nvidia, AMD, Broadcom cutting CoWoS orders at TSMC are debunked as TSMC transitions to CoWoS-L, expects a doubling of AI revenues in...

Company beats consensus, expects strong growth in 2025 with AI revenues doubling, stock trading at attractive multiples for projected growth.

SIMO is well-positioned to capitalize on the growing demand for high-end NAND memory controllers. We believe a share buyback program could enhance...

Leaked Mediatek chip specs hint at potential rival to Qualcomm's flagship chips; Foxconn investing in Texas & Thailand; TSMC's Arizona production...