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

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>Novatek reported earnings ahead of expectations where margins rose thanks to recovery in pricing for its products in inventory. Inventory metrics improved as well.</li>
<li>Key industry readthrough -- Novatek seeing strongest demand for DDICs (display driver chips) coming from the small/medium form factor and highlighted mass production of VR as a cause.</li>
<li>Apple could be quietly preparing for mass production of AR/VR headset ahead of announcement at June's WWDC. Combined with Novatek's comments, could AR/VR will be going mass market this year?</li>
</ul>


Novatek reported earnings ahead of expectations where margins rose thanks to recovery in pricing for its products in inventory. Inventory metrics improved as well.
Key industry readthrough -- Novatek seeing strongest demand for DDICs (display driver chips) coming from the small/medium form factor and highlighted mass production of VR as a cause.
Apple could be quietly preparing for mass production of AR/VR headset ahead of announcement at June's WWDC. Combined with Novatek's comments, could AR/VR will be going mass market this year?


Novatek: Volume Production of VR Driving Strongest Segment; AR/VR Finally Going Mass Market in 2023?

<ul>
<li>Major earnings this week including Hon Hai, Novatek, Wistron, Asustek, and more.</li>
<li>We believe one can consider Long Acer vs. Short Asustek into Asustek's results this week.</li>
<li>Apple Suppliers -- Quanta has tracked Apple's success while others have lagged by a large margin.</li>
</ul>


Major earnings this week including Hon Hai, Novatek, Wistron, Asustek, and more.
We believe one can consider Long Acer vs. Short Asustek into Asustek's results this week.
Apple Suppliers -- Quanta has tracked Apple's success while others have lagged by a large margin.


Taiwan Tech Weekly: Hon Hai Earnings; Long/Short Into Asustek Results; Quanta Tracking Apple Shares

Taiwan

ChipMOS TECHNOLOGIES INC. offers semiconductor testing and packaging solutions to companies, integrated device manufacturers, and foundries. The Company provides a broad range of back-end testing services for high density memory, mixed-signal and liquid crystal display.

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Chipmos Technologies (8150 TT)

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

Novatek: Volume Production of VR Driving Strongest Segment; AR/VR Finally Going Mass Market in 2023?

Apple could be quietly preparing for mass production of AR/VR headset ahead of announcement at June's WWDC. Combined with Novatek's comments, could...

Vincent Fernando, CFA

Taiwan Tech Weekly: Hon Hai Earnings; Long/Short Into Asustek Results; Quanta Tracking Apple Shares

Quanta has tracked Apple's share price success while many other suppliers have lagged by a large margin. Separately, one can consider going Long...

Vincent Fernando, CFA

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