Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

United Microelectronics Corp / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/united-microelectron-sp-adr" target="_blank" data-smartkarma-citation="entities:11540:1" rel="noopener">United Microelectron Sp Adr (UMC US)</a> experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.</li>
<li>We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  </li>
<li>It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.</li>
</ul>



United Microelectron Sp Adr (UMC US) experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.
We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  
It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.


UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

Technology / Semiconductor / Internet Research

Nicolas Baratte

SMIC (Semiconductor Manufacturing International Corp) / Equity Bottom-Up

SMIC (Semiconductor Manufacturing International Corp) (981 HK)

SMIC (Semiconductor Manufacturing International Corp)

<ul>
<li>Chinese Foundries (HuaHong, SMIC) have outgrown ex-China (GlobalFoundries, UMC, Vanguard) very significantly. Reacting to US sanctions, Chinese Chip Designers have shifted to domestic Foundries. China / ex-China supply-chains have decoupled.</li>
<li>End-Demand diverged up to 2Q24. Chinese Foundries were mentioning end-demand recovering, customers restocking, tight capacity. Ex-China Foundries mentioning the opposite: weak end-demand, customers destocking, low utilization. </li>
<li>Change of direction in 3Q24. Chinese Foundries become cautious, we see an obvious inventory problem on overblown end-demand growth expectations. Ex-China end-demand is stabilizing, destocking coming to an end.</li>
</ul>


Chinese Foundries (HuaHong, SMIC) have outgrown ex-China (GlobalFoundries, UMC, Vanguard) very significantly. Reacting to US sanctions, Chinese Chip Designers have shifted to domestic Foundries. China / ex-China supply-chains have decoupled.
End-Demand diverged up to 2Q24. Chinese Foundries were mentioning end-demand recovering, customers restocking, tight capacity. Ex-China Foundries mentioning the opposite: weak end-demand, customers destocking, low utilization. 
Change of direction in 3Q24. Chinese Foundries become cautious, we see an obvious inventory problem on overblown end-demand growth expectations. Ex-China end-demand is stabilizing, destocking coming to an end.


Foundries. China (Hua Hong, SMIC) Has Outperformed but on Poor Margins & Inventory Risk.

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>The price of ASML EUV machine is increasing as thruput (wafer / hour) is increasing. </li>
<li>TSMC 3nm is fully booked in 2025. Here is the list of clients / chips. </li>
<li>SiC and MCU over-investments in China? Very likely. China is limiting SiC investments. </li>
</ul>


The price of ASML EUV machine is increasing as thruput (wafer / hour) is increasing. 
TSMC 3nm is fully booked in 2025. Here is the list of clients / chips. 
SiC and MCU over-investments in China? Very likely. China is limiting SiC investments. 


Tech News This Week. ASML, TSMC, Intel, SiC Capacity, MCU in China

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

<ul>
<li>Rohm’s cyclical turning points in revenue typically lag the turn METI production %YoY less inventory % YoY for electronic devices and components by 12 months.</li>
<li>Investors were disappointed with Q1 results, but the company cleanly outperformed most peers in the power semiconductor space, and recovery now looks inevitable. </li>
<li>We believe the fair value of shares to be around ¥3,300, 2x the current price, but investors should ask, “When?” Not “How much.”</li>
</ul>


Rohm’s cyclical turning points in revenue typically lag the turn METI production %YoY less inventory % YoY for electronic devices and components by 12 months.
Investors were disappointed with Q1 results, but the company cleanly outperformed most peers in the power semiconductor space, and recovery now looks inevitable. 
We believe the fair value of shares to be around ¥3,300, 2x the current price, but investors should ask, “When?” Not “How much.”


US-EU Index Rebalances / Quantitative Researcher

Dimitris Ioannidis

Global Financial Data and Analytics Platform

ORTEX

ORTEX is a global financial data and analytics platform providing real-time securities lending and short interest data, index rebalance data, holdings and insider transactions, trading signals, corporate actions and news,  stock machine learning and factor scores and other analytics. The majority of the data are downloadable and accessible through APIs.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cap-gemini-sa" target="_blank" data-smartkarma-citation="entities:21411:1" rel="noopener">Cap Gemini SA (CAP FP)</a> is estimated to be excluded from the selection list in the long-run due to being pushed way above 60% coverage in the Technology sector.</li>
<li>
<a href="https://www.smartkarma.com/entities/merck-kgaa" target="_blank" data-smartkarma-citation="entities:21676:1" rel="noopener">Merck KGaA (MRK GR)</a> switches between in and out of the selection list because it fluctuates close to the 60% coverage of the Health Care sector.</li>
<li>
<a href="https://www.smartkarma.com/entities/nokia-oyj" target="_blank" data-smartkarma-citation="entities:21754:1" rel="noopener">Nokia OYJ (NOKIA FH)</a> has a higher probability of deletion from SX5E if <a href="https://www.smartkarma.com/entities/merck-kgaa" target="_blank" data-smartkarma-citation="entities:21676:1" rel="noopener">Merck KGaA (MRK GR)</a>  qualifies to the selection list. Forecasted passive fund supply is  ~15 ADV.   </li>
</ul>



Cap Gemini SA (CAP FP) is estimated to be excluded from the selection list in the long-run due to being pushed way above 60% coverage in the Technology sector.

Merck KGaA (MRK GR) switches between in and out of the selection list because it fluctuates close to the 60% coverage of the Health Care sector.

Nokia OYJ (NOKIA FH) has a higher probability of deletion from SX5E if Merck KGaA (MRK GR)  qualifies to the selection list. Forecasted passive fund supply is  ~15 ADV.   


Germany

Infineon Technologies AG designs, manufactures, and markets semiconductors. The Company offers products include power semiconductors, microcontrollers, security controllers, radio frequency products, and sensors. Infineon markets its products to the automotive, industrial, communications, and consumer and security electronics sectors.

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Infineon Technologies (IFX GR)

UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

UMC expects a 5-10% QoQ decline in 1Q25, with a modest 5% YoY decline for 2025. Taiwanese Fabless companies may boost 1Q25 demand, while mature...

Patrick Liao

Foundries. China (Hua Hong, SMIC) Has Outperformed but on Poor Margins & Inventory Risk.

Chinese foundries have overgrown ex-China counterparts, but now face inventory issues. Ex-China foundries are stabilizing, destocking coming to an...

Nicolas Baratte

Tech News This Week. ASML, TSMC, Intel, SiC Capacity, MCU in China

ASML price increase in 2025. TSMC 3nm Order Surge Expected in 2025. Intel's Next-Gen Panther Lake CPUs Handed to Lenovo. China restrictions on SiC...

Nicolas Baratte

Rohm (6963): Search for the Bottom

Growth of production less growth of inventory turned positive last September, which could lead to an upturn in Rohm’s sales by the third quarter. ...

Michael Allen

EURO STOXX 50: Exclusion by Sector

Merck KGaA's fluctuating ranking in the Health Care sector impacts the probability of Nokia's deletion from EURO STOXX 50 which can cause a passive...

Dimitris Ioannidis

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UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

UMC expects a 5-10% QoQ decline in 1Q25, with a modest 5% YoY decline for 2025. Taiwanese Fabless companies may boost 1Q25 demand, while mature...

Patrick Liao

Foundries. China (Hua Hong, SMIC) Has Outperformed but on Poor Margins & Inventory Risk.

​Chinese foundries have overgrown ex-China counterparts, but now face inventory issues. Ex-China foundries are stabilizing, destocking coming to an...

Nicolas Baratte

Tech News This Week. ASML, TSMC, Intel, SiC Capacity, MCU in China

ASML price increase in 2025. TSMC 3nm Order Surge Expected in 2025. Intel's Next-Gen Panther Lake CPUs Handed to Lenovo. China restrictions on SiC...

Nicolas Baratte

Rohm (6963): Search for the Bottom

Growth of production less growth of inventory turned positive last September, which could lead to an upturn in Rohm’s sales by the third quarter. ...

Michael Allen

EURO STOXX 50: Exclusion by Sector

Merck KGaA's fluctuating ranking in the Health Care sector impacts the probability of Nokia's deletion from EURO STOXX 50 which can cause a passive...

Dimitris Ioannidis

Chinese foundries have overgrown ex-China counterparts, but now face inventory issues. Ex-China foundries are stabilizing, destocking coming to an...