Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

<ul><li>The year 2023 began with a significant downturn in the semiconductor market.</li><li>Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.</li><li>Supply outpaced demand, and the market turned into a period of oversupply.</li></ul>

The year 2023 began with a significant downturn in the semiconductor market.Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.Supply outpaced demand, and the market turned into a period of oversupply.

Semiconductor Outlook 2024: AI's Adolescence

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>SEMI reports September front end and back end test/assembly equipment sales decline of 18% and 25% y/y, respectively, resulting 3Q23 sales decline of 17% and 28% y/y.</li>
<li>However, WSTS/SIA and US ISM Purchasing Managers Index reported more moderate 7% y/y decline in August global semi sales and 4% y/y decline in September index. </li>
<li>The discrepancy is due to global semi vendors are seeing PC and Smartphone IC improvement but need to consume earlier overbuilt inventories first before boosting in house or foundries' capex.</li>
</ul>


SEMI reports September front end and back end test/assembly equipment sales decline of 18% and 25% y/y, respectively, resulting 3Q23 sales decline of 17% and 28% y/y.
However, WSTS/SIA and US ISM Purchasing Managers Index reported more moderate 7% y/y decline in August global semi sales and 4% y/y decline in September index. 
The discrepancy is due to global semi vendors are seeing PC and Smartphone IC improvement but need to consume earlier overbuilt inventories first before boosting in house or foundries' capex.


What Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us?

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

<ul>
<li>China is considering banning gallium and germanium shipments to the US</li>
<li>Semiconductors consume well under 20% of world gallium production, and an almost immeasurably small amount of germanium</li>
<li>Very little of the consumption is in the US, indicating that the impact of a boycott should be very small</li>
</ul>


China is considering banning gallium and germanium shipments to the US
Semiconductors consume well under 20% of world gallium production, and an almost immeasurably small amount of germanium
Very little of the consumption is in the US, indicating that the impact of a boycott should be very small


Is China's Boycott of Germanium Gallium to the US Meaningful?

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

CXMT Corporation / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cxmt-corporation" target="_blank" data-smartkarma-citation="entities:44129:1" rel="noopener">CXMT Corporation (688825 CH)</a> concluded its IPO price at Rmb8.66, and we estimate this equals 5x PER for FY26 and 3.4x for FY27.</li>
<li>It is inexpensive relative to global peers, as they are trading at an average of 8.1x and 6.1x, respectively. Normally, A-shares trade at a higher multiple than global peers. </li>
<li>Applying the Hang Seng AH premium on the IPO, there is a 74.5% upside. Aggressively, if GPU companies are used as references, it may even provide a 3x upside.</li>
</ul>



CXMT Corporation (688825 CH) concluded its IPO price at Rmb8.66, and we estimate this equals 5x PER for FY26 and 3.4x for FY27.
It is inexpensive relative to global peers, as they are trading at an average of 8.1x and 6.1x, respectively. Normally, A-shares trade at a higher multiple than global peers. 
Applying the Hang Seng AH premium on the IPO, there is a 74.5% upside. Aggressively, if GPU companies are used as references, it may even provide a 3x upside.


CXMT Corporation (688825 CH) IPO: Valuation Insight

Shanghai Enflame Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-enflame-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:50657:1" rel="noopener">Shanghai Enflame Technology (ENFLAME CH)</a>, one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.</li>
<li>The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.</li>
<li>At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, <a href="https://www.smartkarma.com/entities/shanghai-biren-technology-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:39934:1" rel="noopener">Biren Technology (6082 HK)</a> and <a href="https://www.smartkarma.com/entities/shanghai-iluvatar-corex-semiconductor-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:46193:1" rel="noopener">Iluvatar CoreX (9903 HK)</a>. </li>
</ul>



Shanghai Enflame Technology (ENFLAME CH), one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.
The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.
At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, Biren Technology (6082 HK) and Iluvatar CoreX (9903 HK). 


Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

United States

Advanced Micro Devices, Inc. (AMD) produces semiconductor products and devices. The Company offers products such as microprocessors, embedded microprocessors, chipsets, graphics, video and multimedia products and supplies it to third-party foundries, as well as provides assembling, testing, and packaging services. AMD serves customers worldwide.

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Advanced Micro Devices (AMD US)

Semiconductor Outlook 2024: AI's Adolescence

Its time to jog your memory. We've gone through the downturn, what does an upturn look like? The year 2023 began with a significant downturn in the...

Fabricated Knowledge

What Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us?

Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us global semi vendors are consuming earlier overbuilt inventories first...

Andrew Lu

Is China's Boycott of Germanium Gallium to the US Meaningful?

Although China has threatened to boycott shipments of germanium and gallium to the US, the impact of such a move is likely to be very small. This...

Jim Handy

CXMT Corporation (688825 CH) IPO: Valuation Insight

CXMT Corporation (688825 CH) has announced it will start trading on the Shanghai Stock Exchange's STAR Market next Monday (27 Jul 2026).

Osbert Tang, CFA

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Semiconductor Outlook 2024: AI's Adolescence

Its time to jog your memory. We've gone through the downturn, what does an upturn look like? The year 2023 began with a significant downturn in the...

Fabricated Knowledge

What Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us?

Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us global semi vendors are consuming earlier overbuilt inventories first...

Andrew Lu

Is China's Boycott of Germanium Gallium to the US Meaningful?

Although China has threatened to boycott shipments of germanium and gallium to the US, the impact of such a move is likely to be very small. This...

Jim Handy

CXMT Corporation (688825 CH) IPO: Valuation Insight

CXMT Corporation (688825 CH) has announced it will start trading on the Shanghai Stock Exchange's STAR Market next Monday (27 Jul 2026).

Osbert Tang, CFA

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved ​Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...