Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

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

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>The U.S. is reportedly working to implement China semiconductor restrictions with South Korean firms, after doing the same with Japanese and Dutch firms.</li>
<li>Nanya management sees a bottom for Memory prices in 1Q23E; we look at Long Micron vs. Short Nanya.</li>
<li>Firms are significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.</li>
</ul>


The U.S. is reportedly working to implement China semiconductor restrictions with South Korean firms, after doing the same with Japanese and Dutch firms.
Nanya management sees a bottom for Memory prices in 1Q23E; we look at Long Micron vs. Short Nanya.
Firms are significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.


Taiwan Tech Weekly: U.S. Pushing South Korea China Restrictions, Nanya Says Memory Bottom in 1Q23E

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Latest Nvidia and Apple developments are positive signals for Hon Hai, we continue to view Hon Hai as a Structural Long and also outline a potential Long/Short.</li>
<li>The Nvidia chips Hon Hai is partnered with to use in its EV autonomous driving systems are based on 7-nm technology, thus restricted for any mainland China competitors.</li>
<li>On the Apple front, Hon Hai is also reported to have won exclusive production for the iPhone 15, iPhone 15 Pro, and iPhone 15 Pro Max.</li>
</ul>


Latest Nvidia and Apple developments are positive signals for Hon Hai, we continue to view Hon Hai as a Structural Long and also outline a potential Long/Short.
The Nvidia chips Hon Hai is partnered with to use in its EV autonomous driving systems are based on 7-nm technology, thus restricted for any mainland China competitors.
On the Apple front, Hon Hai is also reported to have won exclusive production for the iPhone 15, iPhone 15 Pro, and iPhone 15 Pro Max.


Hon Hai Precision: Nvidia Chip Partnership Shows Emerging EV Advantage, Apple Issues Improving; Buy

<ul>
<li>U.S. Commerce Secretary gave a new speech providing additional public detail about the U.S. CHIPS Act aimed at re-shoring the manufacture of semiconductors in the U.S.</li>
<li>Emphasis on national security means that financial cost is now secondary for the U.S. and we should not expect any loosening of chip restrictions for China.</li>
<li>Taiwan companies are straddling a "sweet spot" given they are not restricted, can invest in the U.S. expansion, maintain local non-U.S. advantages, and have had their China-based competition weakened.</li>
</ul>


U.S. Commerce Secretary gave a new speech providing additional public detail about the U.S. CHIPS Act aimed at re-shoring the manufacture of semiconductors in the U.S.
Emphasis on national security means that financial cost is now secondary for the U.S. and we should not expect any loosening of chip restrictions for China.
Taiwan companies are straddling a "sweet spot" given they are not restricted, can invest in the U.S. expansion, maintain local non-U.S. advantages, and have had their China-based competition weakened.


New U.S. CHIPS Act Speech: Commerce Secretary Emphasizes National Security Game Changer; Conclusions

<ul>
<li>China Balloon Incident -- Negative news for China semiconductor restrictions; Up to 45nm may now be hobbled by Japan &amp; Netherlands joining.</li>
<li>Hon Hai -- January sales results strong, could help market look forward to Hon Hai's future growth.</li>
<li>Mediatek Results &amp; Upcoming Results -- Signs of slight smartphone stablization, also we highlight key Auto &amp; Industrial Semiconductor related results ahead.</li>
</ul>


China Balloon Incident -- Negative news for China semiconductor restrictions; Up to 45nm may now be hobbled by Japan &amp; Netherlands joining.
Hon Hai -- January sales results strong, could help market look forward to Hon Hai's future growth.
Mediatek Results &amp; Upcoming Results -- Signs of slight smartphone stablization, also we highlight key Auto &amp; Industrial Semiconductor related results ahead.


Taiwan Tech Weekly: Balloon Incident Could Worsen China Restrictions & Key Earnings Readthroughs

<ul>
<li>Samsung reported 4Q22 detailed results - Semiconductor earnings evaporated and its memory subsegment likely lost money.</li>
<li>Samsung re-iterated that it would NOT cut capex despite the market downturn - Samsung appears ready to endure losses which is negative for Nanya Tech, SK Hynix, and Micron.</li>
<li>Japan and the Netherlands have joined the U.S. with chip technology restrictions for China - Hon Hai is a net winner.</li>
</ul>


Samsung reported 4Q22 detailed results - Semiconductor earnings evaporated and its memory subsegment likely lost money.
Samsung re-iterated that it would NOT cut capex despite the market downturn - Samsung appears ready to endure losses which is negative for Nanya Tech, SK Hynix, and Micron.
Japan and the Netherlands have joined the U.S. with chip technology restrictions for China - Hon Hai is a net winner.


Taiwan Tech Weekly: Samsung Results; Will Bleed Competitors; Japan & Holland Join China Chip Ban

Taiwan

Hon Hai Precision Industry Co., Ltd. provides electronic manufacturing services for computers, communications, and consumer electronic products.  The Company's business operations include desktop and notebook PC assembly, connector production, cable assembly, PCB assembly, handset manufacturing, networking equipment, and other consumer electronic devices manufacturing.

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Hon Hai Precision Industry (2317 TT)

Taiwan Tech Weekly: U.S. Pushing South Korea China Restrictions, Nanya Says Memory Bottom in 1Q23E

Firms are also significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.

Vincent Fernando, CFA

Hon Hai Precision: Nvidia Chip Partnership Shows Emerging EV Advantage, Apple Issues Improving; Buy

Latest Nvidia and Apple developments are positive signals for Hon Hai, we continue to view Hon Hai as a Structural Long and also outline a...

Vincent Fernando, CFA

New U.S. CHIPS Act Speech: Commerce Secretary Emphasizes National Security Game Changer; Conclusions

Don't expect any loosening of China chip restrictions, financial cost is now secondary to national security. A future expansion of funding is...

Vincent Fernando, CFA

Taiwan Tech Weekly: Balloon Incident Could Worsen China Restrictions & Key Earnings Readthroughs

Up to 45nm chips may now hobbled by Japan & Netherlands joining U.S. with restrictions. Mediatek sees signs of slight smartphone stablization; key...

Vincent Fernando, CFA

Taiwan Tech Weekly: Samsung Results; Will Bleed Competitors; Japan & Holland Join China Chip Ban

Samsung re-iterated that it would NOT cut capex despite the market downturn - Samsung appears ready to endure losses which is negative for Nanya...

Vincent Fernando, CFA

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