Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.</li>
<li>Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.</li>
<li>We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.</li>
</ul>


Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.
Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.
We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.


First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Diodes Incorporated's second quarter of fiscal year 2024 showcased performance exceeding prior expectations as demand began to recover, particularly noted in the computing market in Asia.</li><li>The improvement in distributor inventory levels, marked by a sequential decrease in channel inventory weeks, was also a positive development.</li><li>The company highlighted significant growth in point-of-sale (POS) across 3C markets (Computers, Communication, and Consumer Electronics), maintaining a steady revenue stream from automotive and industrial products which collectively accounted at 41% of total revenue.</li></ul>

Diodes Incorporated's second quarter of fiscal year 2024 showcased performance exceeding prior expectations as demand began to recover, particularly noted in the computing market in Asia.The improvement in distributor inventory levels, marked by a sequential decrease in channel inventory weeks, was also a positive development.The company highlighted significant growth in point-of-sale (POS) across 3C markets (Computers, Communication, and Consumer Electronics), maintaining a steady revenue stream from automotive and industrial products which collectively accounted at 41% of total revenue.

Diodes Incorporated: Automotive & Industrial Market Expansion & Focus on AI & Data Center Applications! - Major Drivers

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We continue to play the hand we have been dealt; i.e., riding the trend higher on the SPX and Nasdaq 100, and being overweight large-cap growth</li>
<li>Russell 1000 GrowthVs.Value ratio is breaking out from a 4-year base, suggesting growth's outperformance is likely to continue in the months ahead. Growth outperforming during bull markets is no surprise.</li>
<li>Latest bullish developments include the equal-weighted Nasdaq 100 (QQQE) breaking out from a 4-month base, while Discretionary (XLY) displays a 6-month base breakout and RS is reversing its YTD downtrend</li>
</ul>


We continue to play the hand we have been dealt; i.e., riding the trend higher on the SPX and Nasdaq 100, and being overweight large-cap growth
Russell 1000 GrowthVs.Value ratio is breaking out from a 4-year base, suggesting growth's outperformance is likely to continue in the months ahead. Growth outperforming during bull markets is no surprise.
Latest bullish developments include the equal-weighted Nasdaq 100 (QQQE) breaking out from a 4-month base, while Discretionary (XLY) displays a 6-month base breakout and RS is reversing its YTD downtrend


Play the Hand You're Dealt; Bullish Outlook Intact; Remain Overweight Large-Cap Growth; Tech Buys

<ul><li>Diodes Incorporated reported its financial results for the first quarter of fiscal 2024 with mixed outcomes during a challenging economic environment.</li><li>The company experienced decreased revenue, reflecting slower-than expected recovery in consumer, computing, and communication segments, along with expected seasonal effects from the Chinese New Year holiday.</li><li>Revenue for the quarter stood at $302 million, a significant reduction from the previous year.</li></ul>

Diodes Incorporated reported its financial results for the first quarter of fiscal 2024 with mixed outcomes during a challenging economic environment.The company experienced decreased revenue, reflecting slower-than expected recovery in consumer, computing, and communication segments, along with expected seasonal effects from the Chinese New Year holiday.Revenue for the quarter stood at $302 million, a significant reduction from the previous year.

Diodes Incorporated: Focus on High-Value New Product Development and Portfolio Expansion!  - Major Drivers

<ul><li>This is our first report on semiconductors player, Diodes Incorporated.</li><li>Diodes' gross profit target of $1 billion has not been met yet, but the company remains positive about its strategic position in the market for eventual growth.</li><li>We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios - a base case, a bull case, and a bear case.</li></ul>

This is our first report on semiconductors player, Diodes Incorporated.Diodes' gross profit target of $1 billion has not been met yet, but the company remains positive about its strategic position in the market for eventual growth.We have further incorporated a sensitivity analysis/ scenario analysis to understand how changes in key assumptions could impact the valuation under 3 scenarios - a base case, a bull case, and a bear case.

Diodes Incorporated: Initiation of Coverage - How Their Focus on Design Wins Is Shaping the Future of Automotive and Industrial Sectors! - Major Drivers

United States

Diodes Incorporated manufactures and supplies discrete, logic, and analog semiconductor devices to consumers in the electronics, computing, industrial, communications, and automotive markets. The Company's products include diodes, transistors, MOSFETs, single gate logic, LED drivers, and USB switches.

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Diodes Inc (DIOD US)

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid; Weaknesses to be seen in industrial, general non-AI server semi,...

Andrew Lu

Diodes Incorporated: Automotive & Industrial Market Expansion & Focus on AI & Data Center Applications! - Major Drivers

Diodes Incorporated's second quarter of fiscal year 2024 showcased performance exceeding prior expectations as demand began to recover,...

Baptista Research

Play the Hand You're Dealt; Bullish Outlook Intact; Remain Overweight Large-Cap Growth; Tech Buys

Play the Hand You're Dealt; Bullish Outlook Intact $SPX $QQQ $IWM; Remain Overweight Large-Cap Growth $IWF $NVDA $AVGO $TSM $AMD $ASML $AAPL $MSFT...

Vermilion Research

Diodes Incorporated: Focus on High-Value New Product Development and Portfolio Expansion! - Major Drivers

Diodes Incorporated reported its financial results for the first quarter of fiscal 2024 with mixed outcomes during a challenging economic...

Baptista Research

Diodes Incorporated: Initiation of Coverage - How Their Focus on Design Wins Is Shaping the Future of Automotive and Industrial Sectors! - Major Drivers

This is our first report on semiconductors player, Diodes Incorporated. Diodes' gross profit target of $1 billion has not been met yet, but the...

Baptista Research

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