Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

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.

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

Himax Technologies Inc Adr / Equity Bottom-Up

<ul>
<li>We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.</li>
<li>Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.</li>
<li>We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.</li>
</ul>


We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.
Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.
We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.


TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

<ul>
<li>Qualcomm's latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results' key implications for Mediatek.</li>
<li>Qualcomm's 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.</li>
<li>Qualcomm confirmed Mediatek's view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.</li>
</ul>


Qualcomm's latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results' key implications for Mediatek.
Qualcomm's 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.
Qualcomm confirmed Mediatek's view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.


Key Insights from Qualcomm's Latest Data; Mediatek Taking Market Share?

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.</li>
<li>
<strong>Why the worst among all?</strong> We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.</li>
<li>
<strong>Priced in?</strong> We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.</li>
</ul>


Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.

Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.

Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.


From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

<ul>
<li>The WiFi technology was dominated by <a href="https://www.smartkarma.com/entities/broadcom-corp-cl-a" target="_blank" data-smartkarma-citation="entities:999:1" rel="noopener">Broadcom Corp Cl A (BRCM US)</a>, but <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> has to break into the PC and smartphone markets in 2024F.</li>
<li>There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.</li>
<li>MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.</li>
</ul>


The WiFi technology was dominated by Broadcom Corp Cl A (BRCM US), but Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F.
There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.
MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.


MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

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.

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Nxp Semiconductors Nv (NXPI US)

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

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

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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

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

Key Insights from Qualcomm's Latest Data; Mediatek Taking Market Share?

We deep dive into Qualcomm's latest results and the key take-aways relative to Mediatek. Overall, we find the latest QCOM results as positive for...

Vincent Fernando, CFA

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. ​In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

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

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...