Technology / Semiconductor / Internet Research

Nicolas Baratte

Thematic (Sector/Industry)

<ul>
<li>Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   </li>
<li>Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   </li>
<li>Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.</li>
</ul>


Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   
Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   
Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.


Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Equity Bottom-Up

Infineon Technologies  / Equity Bottom-Up

<ul>
<li>Very large miss. Sept-24 (4Q FY24) EPS -30% below Consensus.  Dec-24 (1Q FY25) revenue guidance -16% below Consensus, operating profit at least -20% below Consensus.</li>
<li>End-Demand is slow, large inventory destocking will continue into 1H FY25, followed by “no hockey stick recovery” in 2H FY25. “Current visibility is very low”. </li>
<li>For FY25 (starting in Dec-24 quarter), Consensus assumes +17% revenue growth YoY, management guided for a slight decline. Adding some margins compression, FY25 Consensus Net Income  is ~25-30% too high.   </li>
</ul>


Very large miss. Sept-24 (4Q FY24) EPS -30% below Consensus.  Dec-24 (1Q FY25) revenue guidance -16% below Consensus, operating profit at least -20% below Consensus.
End-Demand is slow, large inventory destocking will continue into 1H FY25, followed by “no hockey stick recovery” in 2H FY25. “Current visibility is very low”. 
For FY25 (starting in Dec-24 quarter), Consensus assumes +17% revenue growth YoY, management guided for a slight decline. Adding some margins compression, FY25 Consensus Net Income  is ~25-30% too high.   


Infineon: Large Miss and Reset. Auto & Industrial Semi Is a Good Space for Shorts.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

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

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>TSMC June Sales Surge Higher Than Expectations; Apple Will Be Use TSMC's 2nm Node for Next Year's iPhone 17</li>
<li>Wiwynn GDR Offering - US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong </li>
<li>Silergy (6415.TT): Trial-Run with Vanguard, and Recent Stock Drops Represent an Entry Opportunity. </li>
</ul>


TSMC June Sales Surge Higher Than Expectations; Apple Will Be Use TSMC's 2nm Node for Next Year's iPhone 17
Wiwynn GDR Offering - US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong 
Silergy (6415.TT): Trial-Run with Vanguard, and Recent Stock Drops Represent an Entry Opportunity. 


Taiwan Tech Weekly: TSMC Sales Beat High Expectations; Wiwynn GDR Offering; IPhone 17 to Use 2nm

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>For this report we datamined autonomous driving technology (ADT) innovations.</li>
<li>Worldwide over the last decade the ADT sector has seen nearly 25% CAGR growth in patent filings, with over 40,000 patent family filings.</li>
<li>
<a href="https://www.smartkarma.com/entities/delphi-automotive-plc" target="_blank" data-smartkarma-citation="entities:20870:1" rel="noopener"><strong>Aptiv PLC (APTV US)</strong></a>, with a leadership position in several areas of ADT, strong financials, reasonable valuations and strategic partnerships stands out.  </li>
</ul>


For this report we datamined autonomous driving technology (ADT) innovations.
Worldwide over the last decade the ADT sector has seen nearly 25% CAGR growth in patent filings, with over 40,000 patent family filings.

Aptiv PLC (APTV US), with a leadership position in several areas of ADT, strong financials, reasonable valuations and strategic partnerships stands out.  


Taiwan Tech Focused Senior Analyst

Patrick Liao

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> and <a href="https://www.smartkarma.com/entities/monolithic-power-systems-inc" target="_blank" data-smartkarma-citation="entities:2088:1" rel="noopener">Monolithic Power Systems, Inc (MPWR US)</a> are gradually increasing demand volume in 2Q24 and 3Q24.  </li>
<li>Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  </li>
</ul>


We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  

Qualcomm Inc (QCOM US) and Monolithic Power Systems, Inc (MPWR US) are gradually increasing demand volume in 2Q24 and 3Q24.  
Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  


Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

Netherlands

NXP Semiconductors NV operates as a global semiconductor company. The Company designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking.  NXP offers its products to the automotive, identification, wireless infrastructure, lighting, mobile, and computing applications.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Nxp Semiconductors Nv (NXPI US)

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Infineon: Large Miss and Reset. Auto & Industrial Semi Is a Good Space for Shorts.

On Consensus before earnings release, the stock trades at 12.5x FY25. After Consensus adjustment, the stock should be trading at ~16-17x FY25 EPS.

Nicolas Baratte

Taiwan Tech Weekly: TSMC Sales Beat High Expectations; Wiwynn GDR Offering; IPhone 17 to Use 2nm

TSMC's strong June sales exceed expectations, Apple to use TSMC's 2nm node for iPhone 17 next year. Wiwynn's US$1.45bn dilutive offering shows...

Vincent Fernando, CFA

Autonomous Driving Leadership Landscape

Autonomous driving tech seeing surge in innovations to make journeys safer, more efficient, and intelligent. Welcome to the future of mobility.

Pyari Menon

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

​Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Infineon: Large Miss and Reset. Auto & Industrial Semi Is a Good Space for Shorts.

On Consensus before earnings release, the stock trades at 12.5x FY25. After Consensus adjustment, the stock should be trading at ~16-17x FY25 EPS.

Nicolas Baratte

Taiwan Tech Weekly: TSMC Sales Beat High Expectations; Wiwynn GDR Offering; IPhone 17 to Use 2nm

​TSMC's strong June sales exceed expectations, Apple to use TSMC's 2nm node for iPhone 17 next year. Wiwynn's US$1.45bn dilutive offering shows...

Vincent Fernando, CFA

Autonomous Driving Leadership Landscape

Autonomous driving tech seeing surge in innovations to make journeys safer, more efficient, and intelligent. Welcome to the future of mobility.

Pyari Menon

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

​Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

TSMC's strong June sales exceed expectations, Apple to use TSMC's 2nm node for iPhone 17 next year. Wiwynn's US$1.45bn dilutive offering shows...

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...