Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Equity Bottom-Up

<ul>
<li>ASML today reported Q326 net sales of €11.66 billion, up 25.0% QoQ and up 55.2% YoY, near the high end of guidance</li>
<li>Q4 2026 guided for total net sales between €14.2 billion and €15.2 billion,  up 26% QoQ, with a gross margin around 57%</li>
<li>ASML now expects they won't be able to meet customer demand in 2027 &amp; 2028 and are investigating ways to increase 2028 capacity beyond the 30% increase they previously communicated.</li>
</ul>


ASML today reported Q326 net sales of €11.66 billion, up 25.0% QoQ and up 55.2% YoY, near the high end of guidance
Q4 2026 guided for total net sales between €14.2 billion and €15.2 billion,  up 26% QoQ, with a gross margin around 57%
ASML now expects they won't be able to meet customer demand in 2027 &amp; 2028 and are investigating ways to increase 2028 capacity beyond the 30% increase they previously communicated.


ASML Q326 Earnings Review. TSMC Confirmed On High NA EUV By 2030. Phew!

AI and Energy Infrastructure, Explained Plainly, The Physical Layer

The Physical Layer

AI and Energy Infrastructure, Explained Plainly

A journal on the physical constraints behind the AI buildout: power, grid connection, data centres, cooling and the supply chains that gate them. Written to be understood by anyone.

<ul><li>Every factory making the most advanced AI chips needs EUV machines, and ASML, a Dutch company, is the only maker.</li><li>It expects to ship about 65 of its standard model this year, its full capacity, and says next year's machines are already close to fully ordered.</li><li>Its output can grow only as fast as its German optics supplier allows, so a chipmaker that wants more must order a year or two ahead, much as a data centre books its grid connection.</li></ul>

Every factory making the most advanced AI chips needs EUV machines, and ASML, a Dutch company, is the only maker.It expects to ship about 65 of its standard model this year, its full capacity, and says next year's machines are already close to fully ordered.Its output can grow only as fast as its German optics supplier allows, so a chipmaker that wants more must order a year or two ahead, much as a data centre books its grid connection.

ASML's EUV machines are booked a year or two ahead, like a grid connection

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.</li>
<li>A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. </li>
<li>China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.</li>
</ul>


During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.
A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. 
China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.


More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.</li>
<li>
No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.</li>
<li>Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.</li>
</ul>


TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.

No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>As with US efforts to thwart Chinese smuggling of chips to meet its AI demand, China cannot fully stop US smuggling of REEs and high-powered permanent magnets.</li>
<li>Chinese official policy holds that applying export controls to rare earths is consistent with international practice because they can be used for both civilian and military purposes.  </li>
<li>U.S. is 80% import-dependent on REEs, with China supplying 80% of those imports. It is a 100% net importer of REEs produced via China's magnet rare earth concentrate (mREC) process.</li>
</ul>


As with US efforts to thwart Chinese smuggling of chips to meet its AI demand, China cannot fully stop US smuggling of REEs and high-powered permanent magnets.
Chinese official policy holds that applying export controls to rare earths is consistent with international practice because they can be used for both civilian and military purposes.  
U.S. is 80% import-dependent on REEs, with China supplying 80% of those imports. It is a 100% net importer of REEs produced via China's magnet rare earth concentrate (mREC) process.


Rare Earth Elements: U.S. SMUGGLING ILLICITS CHINA CRACKDOWN !!

Netherlands

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients worldwide.

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ASML Holding NV (ASML US)

ASML Q326 Earnings Review. TSMC Confirmed On High NA EUV By 2030. Phew!

ASML now expects they won't be able to meet customer demand in 2027 & 2028 and are investigating ways to increase 2028 capacity beyond the 30%...

William Keating

ASML's EUV machines are booked a year or two ahead, like a grid connection

Every factory making the most advanced AI chips needs EUV machines, and ASML, a Dutch company, is the only maker. It expects to ship about 65 of...

The Physical Layer

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction. During the period, global semi equipment and manufacturing...

Andrew Lu

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

Rare Earth Elements: U.S. SMUGGLING ILLICITS CHINA CRACKDOWN !!

As with US efforts to thwart Chinese smuggling of chips to meet its AI demand, China cannot fully stop US smuggling of REEs and high-powered...

David Mudd

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