Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

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

Semiconductor Manufacturing International Corp (SMIC)

<h2><em>Summary</em></h2><p><em>SMIC reports clear beats on 2Q16 results and 2H16 guidance and outlook against peers and Bloomberg consensus estimates, largely driven by shares gain from system houses, 40nm from fabless customers, and likely customers are asked to place foundry orders domestically in order to boost up China domestic semiconductor production rate to 50% by 2025 from 15-25% now. Although all the numbers look great for SMIC, analysts seem struggling with free cash flow, much higher depreciation cost and</em>…</p>

SummarySMIC reports clear beats on 2Q16 results and 2H16 guidance and outlook against peers and Bloomberg consensus estimates, largely driven by shares gain from system houses, 40nm from fabless customers, and likely customers are asked to place foundry orders domestically in order to boost up China domestic semiconductor production rate to 50% by 2025 from 15-25% now. Although all the numbers look great for SMIC, analysts seem struggling with free cash flow, much higher depreciation cost and…

Thematic (Sector/Industry)

<p><em>Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech July sales are somehow below seasonal and below our expectations. If analysts start to factor in 3-4% appreciation on NT$ against US starting July, earnings prospects in 2H16 for semi and tech companies might not be as strong as market estimated earlier. In conclusion, we believe not much sales momentum left over before we see a seasonal semiconductor</em>…</p>

Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech July sales are somehow below seasonal and below our expectations. If analysts start to factor in 3-4% appreciation on NT$ against US starting July, earnings prospects in 2H16 for semi and tech companies might not be as strong as market estimated earlier. In conclusion, we believe not much sales momentum left over before we see a seasonal semiconductor…

Insights from Taiwan Semi/Tech July Sales

<div class="content-highlight"><p><em>After MediaTek reported 25% q/q sales growth in 2Q16 and commented stronger demand from China smartphone vendors, we see no surprise that Qualcomm reported 9% better on MSM shipment to 201mn units in 2Q16. Despite 2Q16 strengths, Qualcomm guides much flattish 3Q16 MSM shipment of 2% q/q up with 4% q/q sales decline comparing to more positive demand comments from MediaTek smartphone semi CEO earlier, implying MediaTek continues to gain shares from peers during 2Q-3Q16. Healthy months of inventory</em>…</p></div>

After MediaTek reported 25% q/q sales growth in 2Q16 and commented stronger demand from China smartphone vendors, we see no surprise that Qualcomm reported 9% better on MSM shipment to 201mn units in 2Q16. Despite 2Q16 strengths, Qualcomm guides much flattish 3Q16 MSM shipment of 2% q/q up with 4% q/q sales decline comparing to more positive demand comments from MediaTek smartphone semi CEO earlier, implying MediaTek continues to gain shares from peers during 2Q-3Q16. Healthy months of inventory…

Implications to Supply Chain from Qualcomm Results

<p><em>Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways suggest strengths in foundry, fabless, and display vendors to drive Taiwan semi sales recovery of 17% y/y in June and 8 out 12 vendors reported a beat on 2Q16 sales guidance. Despite the strengths, we saw weaknesses in power amplifier, touch panel, and solar vendors and our semi leading indicator fell to 8% in June 2016 from this year peak of 31% in</em>…</p>

Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways suggest strengths in foundry, fabless, and display vendors to drive Taiwan semi sales recovery of 17% y/y in June and 8 out 12 vendors reported a beat on 2Q16 sales guidance. Despite the strengths, we saw weaknesses in power amplifier, touch panel, and solar vendors and our semi leading indicator fell to 8% in June 2016 from this year peak of 31% in…

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Formosa Sumco Technology / Equity Bottom-Up

<ul>
<li>The company recently announced poor earnings down 56% YoY in 1Q24</li>
<li>Dwindling cash is another major concern especially with higher debt/ebitda</li>
<li>At 15-25% ROE is sensible but now back toward 5% there is less enthusiasm </li>
</ul>


The company recently announced poor earnings down 56% YoY in 1Q24
Dwindling cash is another major concern especially with higher debt/ebitda
At 15-25% ROE is sensible but now back toward 5% there is less enthusiasm 


Formosa Sumco Technology - Earnings, Returns, Financial Position, Worsening Dramatically

Taiwan

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

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United Microelectronics Corp (2303 TT)

SMIC Gains Shares at Expense of Peers

SummarySMIC reports clear beats on 2Q16 results and 2H16 guidance and outlook against peers and Bloomberg consensus estimates, largely driven by...

Andrew Lu

Insights from Taiwan Semi/Tech July Sales

Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech...

Andrew Lu

Implications to Supply Chain from Qualcomm Results

After MediaTek reported 25% q/q sales growth in 2Q16 and commented stronger demand from China smartphone vendors, we see no surprise that Qualcomm...

Andrew Lu

Points from Taiwan Semi/Tech 2Q Sales

Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways...

Andrew Lu

Formosa Sumco Technology - Earnings, Returns, Financial Position, Worsening Dramatically

Company is seeing far lower net profit, with the just-announced quarter one of the worst on record in recent years. Debt is now a factor and SG&A...

Daniel Tabbush

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