Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>Worldwide silicon wafer shipments declined ~4% sequentially in Q4 2022. We anticipate a further 10% sequential decline in area shipments in Q1 2023</li>
<li>For 2023, we expect wafer shipments to decline by around 5% YoY with weakness in H1 offset by strength in demand in H2.</li>
<li>Despite the decline in area shipments, we expect the sector to remain strongly profitable, bolstered by the impact of Long Term Agreements and customer prepayments. </li>
</ul>


Worldwide silicon wafer shipments declined ~4% sequentially in Q4 2022. We anticipate a further 10% sequential decline in area shipments in Q1 2023
For 2023, we expect wafer shipments to decline by around 5% YoY with weakness in H1 offset by strength in demand in H2.
Despite the decline in area shipments, we expect the sector to remain strongly profitable, bolstered by the impact of Long Term Agreements and customer prepayments. 


Semiconductor Silicon Wafers Segment Q4 2022 Roundup & 2023 Outlook

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723)</a> and <a href="https://www.smartkarma.com/entities/japan-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1184:1" rel="noopener">Japan Airlines (9201)</a> will replace <a href="https://www.smartkarma.com/entities/toyobo-co-ltd" target="_blank" data-smartkarma-citation="entities:6187:1" rel="noopener">Toyobo (3101)</a>, <a href="https://www.smartkarma.com/entities/nippon-light-metal-holdings" target="_blank" data-smartkarma-citation="entities:1485:1" rel="noopener">Nippon Light Metal (5703)</a> and <a href="https://www.smartkarma.com/entities/toho-zinc-co-ltd" target="_blank" data-smartkarma-citation="entities:2796:1" rel="noopener">Toho Zinc (5707)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a>. </li>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.</li>
<li>Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.</li>
</ul>



Oriental Land (4661), Renesas Electronics (6723) and Japan Airlines (9201) will replace Toyobo (3101), Nippon Light Metal (5703) and Toho Zinc (5707) in the Nikkei 225 (NKY INDEX). 

Oriental Land (4661 JP) has been added at a post-split PAF of 1. This reduces the passive buying on the stock by around a third.
Passive trackers need to buy between 2.2-6.7 days of ADV on the adds while selling between 5-12 days of ADV on the deletes. There's a big funding trade too.


Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

Japan Specialist

Mark Chadwick

<ul>
<li>Global markets continued positive momentum on peaking in global inflation and expectations that the rate hike cycle is approaching its end</li>
<li>There is a slew of economic data next week and some major US tech company results announcements. Japanese earnings announcements get into full swing</li>
<li>Suzuki was the start performer last week as investors cheered the company's new mid-term strategy and decarbonization plans</li>
</ul>


Global markets continued positive momentum on peaking in global inflation and expectations that the rate hike cycle is approaching its end
There is a slew of economic data next week and some major US tech company results announcements. Japanese earnings announcements get into full swing
Suzuki was the start performer last week as investors cheered the company's new mid-term strategy and decarbonization plans


Japan Weekly | Bullish Markets, Suzuki, Shin-Etsu

<ul>
<li>OVERSEAS.  SPX Rallies as Earnings take centre stage; Telsa rips as Musk see 2m in Sales; Auto Semis in Play as STMicro beats - lifts sector; Seagate at turning point</li>
<li>JAPAN.  NKY Futs +0.5% vs Cash; USDJPY Steady at 130.22; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc</li>
<li>DAILY NUGGET. Toyota - End of an Era, and the start of another. We expect new CEO Sato to accelerate the EV shift !</li>
</ul>


OVERSEAS.  SPX Rallies as Earnings take centre stage; Telsa rips as Musk see 2m in Sales; Auto Semis in Play as STMicro beats - lifts sector; Seagate at turning point
JAPAN.  NKY Futs +0.5% vs Cash; USDJPY Steady at 130.22; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc
DAILY NUGGET. Toyota - End of an Era, and the start of another. We expect new CEO Sato to accelerate the EV shift !


Good Morning Japan |Earnings Bonanaza! ; Tesla Rips; AutoSemis in Play;Toyoda @Toyota Passes Baton

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term</li>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> / <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> issued an announcement it would pursue a primary listing on the HKEX. This will make BABA Southbound-eligible</li>
<li>At 0.81x newly-lowered book value, <a href="https://www.smartkarma.com/entities/australian-unity-office-fund" target="_blank" data-smartkarma-citation="entities:24077:1" rel="noopener">Australian Unity Office Fund (AOF AU)</a> is trading at a relatively low multiple. </li>
</ul>


Given recent corporate events in S-REIT land, there could be some considerable money to be allocated to the sector near-term

Alibaba (ADR) (BABA US) / Alibaba Group (9988 HK) issued an announcement it would pursue a primary listing on the HKEX. This will make BABA Southbound-eligible
At 0.81x newly-lowered book value, Australian Unity Office Fund (AOF AU) is trading at a relatively low multiple. 


Last Week in Event SPACE: Mapletree, Alibaba, Australian Unity Office

Japan

Shin-Etsu Chemical Co., Ltd. produces and distributes synthetic resins and other chemical products such as fertilizers. The Company also manufactures electronic materials such as semiconductor silicon, synthetic, and rare earth quartz. Shin-Etsu Chemical operates in Japan and overseas.

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Shin Etsu Chemical (4063 JP)

Semiconductor Silicon Wafers Segment Q4 2022 Roundup & 2023 Outlook

Despite the anticipated 5% YoY decline in wafer area shipments, we expect the sector to remain strongly profitable, bolstered by the impact of Long...

William Keating

Nikkei 225 Index Rebalance: Oriental Land, Renesas, JAL IN; Toyobo, Nippon LightMetal, Toho Zinc OUT

There are 3 adds and 3 deletes in March - mostly on expected line. The inclusion of Oriental Land at a lower than expected PAF could see some...

Brian Freitas

Japan Weekly | Bullish Markets, Suzuki, Shin-Etsu

Global stocks remain on an uptrend. Japanese stocks were in the green for the third week running. We highlight the stocks that impacted the market...

Mark Chadwick

Good Morning Japan |Earnings Bonanaza! ; Tesla Rips; AutoSemis in Play;Toyoda @Toyota Passes Baton

JAPAN. NKY Futs +0.5% vs Cash; Baton gets passed at Toyota; Double D/G of Shippers downgrade to Sell ; EARNINGS TODAY: All about Fanuc.

Mark Chadwick

Last Week in Event SPACE: Mapletree, Alibaba, Australian Unity Office

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

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