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>TSMC is back to an 11.8% ADR premium after dropping to 8%... potentially another good Long/Short point.</li>
<li>UMC has flipped to a -0.6% ADR discount, from a 5.6% Premium. If the discount ticks slightly more negative then a good setup level will open up.</li>
<li>ASE, ChipMOS, and CHT spreads have also experienced significant swings since our last dual-listings piece.</li>
</ul>


TSMC is back to an 11.8% ADR premium after dropping to 8%... potentially another good Long/Short point.
UMC has flipped to a -0.6% ADR discount, from a 5.6% Premium. If the discount ticks slightly more negative then a good setup level will open up.
ASE, ChipMOS, and CHT spreads have also experienced significant swings since our last dual-listings piece.


Taiwan Dual-Listings: TSMC Spread Opens Again for Opportunity; Others Have Swung Substantially

<ul>
<li>The semiconductor stock rally in the U.S. caused by Nvidia's monster results and guidance last week has caused multiple ADR premiums to surge to near all-time highs.</li>
<li>TSMC and UMC's ADR premiums don't appear sustainable given their trading history.</li>
<li>Telecom CHT wasn't affected by the Nvidia rally and now has one of the lowest ADR discounts in its history.</li>
</ul>


The semiconductor stock rally in the U.S. caused by Nvidia's monster results and guidance last week has caused multiple ADR premiums to surge to near all-time highs.
TSMC and UMC's ADR premiums don't appear sustainable given their trading history.
Telecom CHT wasn't affected by the Nvidia rally and now has one of the lowest ADR discounts in its history.


Taiwan Dual-Listings: ADR Premiums Surge to Near All-Time Highs on 'Nvidia-Rally'

<ul>
<li>TSMC's ADR premium has enjoyed a significant rally perhaps due to increased international attention driven by positive U.S. and Japan news flow.</li>
<li>ASE's ADR premium has dropped to one of the lower values in its most recent range since the start of 2023, representing a gradual decline in this persistent premium.</li>
<li>Chunghwa Telecom's ADR is trading at a discount that likely represents a decent set-up level for this tightly trading spread.</li>
</ul>


TSMC's ADR premium has enjoyed a significant rally perhaps due to increased international attention driven by positive U.S. and Japan news flow.
ASE's ADR premium has dropped to one of the lower values in its most recent range since the start of 2023, representing a gradual decline in this persistent premium.
Chunghwa Telecom's ADR is trading at a discount that likely represents a decent set-up level for this tightly trading spread.


Taiwan Dual-Listings: TSMC Premium Rallies as Japan & U.S. Entice Further Investment; CHT Discount

ASE Technology Holding   / Equity Bottom-Up

<ul>
<li>ASE's results commentary for its semiconductor packaging and testing service said that inventory problems for the industry are taking longer than expected to improve.</li>
<li>The weaker than expected environment was only realized towards the end of 1Q23. The company's utilization is near an all-time low which is expected to persist through 2Q23E.</li>
<li>Automotive remains a bright spot for the company, with Auto-linked revenue rising 30% YoY.</li>
</ul>


ASE's results commentary for its semiconductor packaging and testing service said that inventory problems for the industry are taking longer than expected to improve.
The weaker than expected environment was only realized towards the end of 1Q23. The company's utilization is near an all-time low which is expected to persist through 2Q23E.
Automotive remains a bright spot for the company, with Auto-linked revenue rising 30% YoY.


ASE Technology: Semiconductor Packaging & Testing Demand Suprisingly Weak At End of Quarter

<ul>
<li>TSMC's ADR spread just experienced one of its largest one-period drops in recent history. The ADRs are now trading at a 2.3% premium after a 4.2% drop.</li>
<li>UMC ADR's are trading at a -1.1% discount to their Taiwan shares. The spread has mostly been trading in negative territory over the last month. UMC earnings coming this week.</li>
<li>ASE ADR's are trading at a 4.7% premium. ASE's Taiwan shares are down 10% since end-March, compared to a 5% drop for the TAIEX Semiconductor Index.</li>
</ul>


TSMC's ADR spread just experienced one of its largest one-period drops in recent history. The ADRs are now trading at a 2.3% premium after a 4.2% drop.
UMC ADR's are trading at a -1.1% discount to their Taiwan shares. The spread has mostly been trading in negative territory over the last month. UMC earnings coming this week.
ASE ADR's are trading at a 4.7% premium. ASE's Taiwan shares are down 10% since end-March, compared to a 5% drop for the TAIEX Semiconductor Index.


Taiwan Dual-Listings: TSMC ADR Premium Hit by Large 1-Period Drop, UMC Discount & Earnings This Week

Taiwan

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

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ASE Technology Holding (ASX US)

Taiwan Dual-Listings: TSMC Spread Opens Again for Opportunity; Others Have Swung Substantially

TSMC's spread has fallen and then spiked again. ASE, ChipMOS, and CHT spreads have also experienced significant swings since our last dual-listings...

Vincent Fernando, CFA

Taiwan Dual-Listings: ADR Premiums Surge to Near All-Time Highs on 'Nvidia-Rally'

The semiconductor stock rally in the U.S. caused by Nvidia's monster results and guidance last week has caused multiple ADR premiums to surge to...

Vincent Fernando, CFA

Taiwan Dual-Listings: TSMC Premium Rallies as Japan & U.S. Entice Further Investment; CHT Discount

Chunghwa Telecom's ADR is trading at a discount that likely represents a decent set-up level for this tightly trading spread.

Vincent Fernando, CFA

ASE Technology: Semiconductor Packaging & Testing Demand Suprisingly Weak At End of Quarter

The weaker than expected environment was only realized towards the end of 1Q23. The company's utilization is near an all-time low which is expected...

Vincent Fernando, CFA

Taiwan Dual-Listings: TSMC ADR Premium Hit by Large 1-Period Drop, UMC Discount & Earnings This Week

UMC ADR's are trading at a -1.1% discount to their Taiwan shares. The spread has mostly been trading in negative territory over the last month. UMC...

Vincent Fernando, CFA

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