Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Tier-2 commodity Memory is a lousy business, which requires high Capex and R&amp;D, generates very low Free Cash Flows. DRAM is more sustainable than NAND as peak margins are higher. </li>
<li>Kioxia only makes NAND, has a high market share (16%) but is a Tier-2 supplier with a roadmap lagging SK Hynix by ~2 years, and a high exposure to Consumer. </li>
<li>The Memory cycle has recovered, probably close to peak earnings. That’s why stocks have been declining (Micron, Hynix).  Part 2 will cover financials (there's a bad surprise) and valuations. </li>
</ul>


Tier-2 commodity Memory is a lousy business, which requires high Capex and R&amp;D, generates very low Free Cash Flows. DRAM is more sustainable than NAND as peak margins are higher. 
Kioxia only makes NAND, has a high market share (16%) but is a Tier-2 supplier with a roadmap lagging SK Hynix by ~2 years, and a high exposure to Consumer. 
The Memory cycle has recovered, probably close to peak earnings. That’s why stocks have been declining (Micron, Hynix).  Part 2 will cover financials (there's a bad surprise) and valuations. 


What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.</li>
<li>Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.</li>
<li>Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase</li>
</ul>


September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.
Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.
Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase


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

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. </li>
<li>With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   </li>
<li>AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.</li>
</ul>


The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. 
With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   
AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.


All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

Samsung Fire & Marine Insurance / Event-Driven

<ul>
<li>With the 15% ownership cap complicating buybacks, Samsung Fire’s more likely to roll out a dividend-focused value-up play instead.</li>
<li>They’ve flagged a mix of shareholder returns and investments, but the big question is how much will be funneled into returns this year.</li>
<li>If Samsung Fire hits a 50% shareholder return this year, DPS could jump to ₩23,000–₩25,000 with a 6.5% yield, potentially boosting the stock price by 20–30%.</li>
</ul>


With the 15% ownership cap complicating buybacks, Samsung Fire’s more likely to roll out a dividend-focused value-up play instead.
They’ve flagged a mix of shareholder returns and investments, but the big question is how much will be funneled into returns this year.
If Samsung Fire hits a 50% shareholder return this year, DPS could jump to ₩23,000–₩25,000 with a 6.5% yield, potentially boosting the stock price by 20–30%.


Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> is a leading beneficiary of the recovery in global Smartphone demand, and strength in Memory prices, driven by the proliferation of Gen AI demand.</li>
<li>Global Memory prices have recovered by up to +80%y/y driven by demand from hyperscaler customers for leading-technology DDR5, HBM, and other high-value-added memory products.</li>
<li>Samsung Electronics trades more than one standard deviation below its 5-year historic average trading range, a historically proved to be an excellent buying point.</li>
</ul>



Samsung Electronics (005930 KS) is a leading beneficiary of the recovery in global Smartphone demand, and strength in Memory prices, driven by the proliferation of Gen AI demand.
Global Memory prices have recovered by up to +80%y/y driven by demand from hyperscaler customers for leading-technology DDR5, HBM, and other high-value-added memory products.
Samsung Electronics trades more than one standard deviation below its 5-year historic average trading range, a historically proved to be an excellent buying point.


Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

Samsung Electronics Pref Shares (005935 KS)

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Samsung Electronics Pref Shares (005935 KS)

What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Nicolas Baratte

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure

Samsung Fire is emerging as the top dividend play with the value-up angle. This post dives into why the market’s abuzz about the potential dividend...

Sanghyun Park

Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

In this insight, we analyse Samsung Electronics with a particular focus on the global Memory and Smartphone markets, company financials and growth...

Wium Malan, CFA

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What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

​Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Nicolas Baratte

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for ​Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

Why Samsung Fire Is Shaping Up to Be the Hottest Dividend Play Ahead of the Value-Up Disclosure

Samsung Fire is emerging as the top dividend play with the value-up angle. This post dives into why the market’s abuzz about the potential dividend...

Sanghyun Park

Samsung Electronics (005930-KR): Quality Generative AI Play, Trading at a Discount

In this insight, we analyse Samsung Electronics with a particular focus on the global Memory and Smartphone markets, company financials and growth...

Wium Malan, CFA

Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...