Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>More y/y improvement (or decline deceleration) for PC/server, power management IC (PMIC), CMOS sensor/touch controller, GaAs RF/VCSEL, gaming GPU card, memory, and foundry vendors</li>
<li>GaAs RF/VCSEL and gaming GPU card vendors saw very impressive sales growth, driven by new phones introduction and rush orders to use NVIDIA RTX 4090 gaming card for AI training.</li>
<li>Stronger than expected Oct for TSMC and Gigabyte might drive 4Q sales and near term share price upside; Visera, Andes Tech, and AP Memory might see sales and price downside.</li>
</ul>


More y/y improvement (or decline deceleration) for PC/server, power management IC (PMIC), CMOS sensor/touch controller, GaAs RF/VCSEL, gaming GPU card, memory, and foundry vendors
GaAs RF/VCSEL and gaming GPU card vendors saw very impressive sales growth, driven by new phones introduction and rush orders to use NVIDIA RTX 4090 gaming card for AI training.
Stronger than expected Oct for TSMC and Gigabyte might drive 4Q sales and near term share price upside; Visera, Andes Tech, and AP Memory might see sales and price downside.


What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>Shortage/Oversupply, price hike/cut, automotive/industrial demand and inventory corrections are still cyclical. Gross margin should double from 22-24% now once utilization returning to 100% and no more free wafer by 2025.</li>
<li>LCD driver foundry is facing a structural competition as China panel customers are building a local supply chain.</li>
<li>Attractive below NT$70 as: 1. inventory correction should be done by 2Q24; 2. global 8" foundry sales y/y improvement began 3Q23; 3. closing to cyclical low P/BV of 2.5x.</li>
</ul>


Shortage/Oversupply, price hike/cut, automotive/industrial demand and inventory corrections are still cyclical. Gross margin should double from 22-24% now once utilization returning to 100% and no more free wafer by 2025.
LCD driver foundry is facing a structural competition as China panel customers are building a local supply chain.
Attractive below NT$70 as: 1. inventory correction should be done by 2Q24; 2. global 8" foundry sales y/y improvement began 3Q23; 3. closing to cyclical low P/BV of 2.5x.


Why Is Vanguard Semi Becoming to a Bad Student, Cyclical or Structural?

Thematic (Sector/Industry)

<ul>
<li>More clear y/y improvement for 8/12" raw wafer, WiFi IC, GaAs RF/VCSEL, and memory vendors but more y/y deterioration for OLED/LCD driver, LCD panel, design service, equipment/materials, and foundry vendors.</li>
<li>GaAs RF and gaming GPU card vendors showed very impressive y/y sales growth of 54% and 63%, respectively. ABF substrate vendors showed the weakest sales decline of 34% among all. </li>
<li>Except A Data (+2.5% m/m) and Phison Electronics (+5.6% m/m) might see stronger share price to reflect stronger November sales, most of others see good/bad news in the price already.</li>
</ul>


More clear y/y improvement for 8/12" raw wafer, WiFi IC, GaAs RF/VCSEL, and memory vendors but more y/y deterioration for OLED/LCD driver, LCD panel, design service, equipment/materials, and foundry vendors.
GaAs RF and gaming GPU card vendors showed very impressive y/y sales growth of 54% and 63%, respectively. ABF substrate vendors showed the weakest sales decline of 34% among all. 
Except A Data (+2.5% m/m) and Phison Electronics (+5.6% m/m) might see stronger share price to reflect stronger November sales, most of others see good/bad news in the price already.


Stories Behind the Reported Nov 2023 Taiwan Semi/Tech Sales

Asia Pac ECM and Index Rebal, DZT Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of TWSE Stocks as of Nov 28th. The aggregated short interest was USD28.1bn.</li>
<li>We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Lite-On Technology, King Yuan Electronics, ASE Industrial, Acer, Jentech Precision Industrial, Lite-On Technology, King Yuan Electronics, ASE Industrial, Acer, Jentech Precision Industrial.</li>
</ul>


We analyzed the changes in short interest of TWSE Stocks as of Nov 28th. The aggregated short interest was USD28.1bn.
We tabulate league tables for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Lite-On Technology, King Yuan Electronics, ASE Industrial, Acer, Jentech Precision Industrial, Lite-On Technology, King Yuan Electronics, ASE Industrial, Acer, Jentech Precision Industrial.


TWSE Short Interest Weekly (Nov 28th): Lite-On Technology, King Yuan Electronics, ASE Industrial

Taiwan Tech Focused Senior Analyst

Patrick Liao

United Microelectronics Corp / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/united-microelectron-sp-adr" target="_blank" data-smartkarma-citation="entities:11540:1" rel="noopener">United Microelectron Sp Adr (UMC US)</a> 3Q24 outlook could be showing a slightly upside quarter over quarter and the gross margin is approaching to ~30%.</li>
<li>We estimate that UMC's overall utilization in 3Q24 will be around 65-70%, with 12” at 70-75% and 8” at 60%.</li>
<li>UMC is benefiting from Novatek shipping OLED DDIC to <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a> in 3Q24.</li>
</ul>



United Microelectron Sp Adr (UMC US) 3Q24 outlook could be showing a slightly upside quarter over quarter and the gross margin is approaching to ~30%.
We estimate that UMC's overall utilization in 3Q24 will be around 65-70%, with 12” at 70-75% and 8” at 60%.
UMC is benefiting from Novatek shipping OLED DDIC to Apple (AAPL US) in 3Q24.


UMC (2303.TT; UMC.US): The Outlook for 3Q24 Has Reached a Slightly Upside QoQ.

Taiwan

FocalTech Systems Co., Ltd. provides machine interface solutions and manufactures touch panel controller ICs and LCD driver ICs for mobile devices. The Company offers its products around the world.

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Focaltech Systems (3545 TT)

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales? PC/server, PMIC, CMOS sensor/touch controller, GaAs RF, gaming GPU card, memory...

Andrew Lu

Why Is Vanguard Semi Becoming to a Bad Student, Cyclical or Structural?

Why Is Vanguard Semi Becoming to a Bad Student? Some Cyclical or some Structural reasons for the weaknesses coupled with three reasons suggested...

Andrew Lu

Stories Behind the Reported Nov 2023 Taiwan Semi/Tech Sales

Stories Behind the Reported Nov 2023 Taiwan Semi/Tech Sales. More clear y/y improvement for 8/12" raw wafer, WiFi IC, GaAs RF/VCSEL, and memory...

Andrew Lu

TWSE Short Interest Weekly (Nov 28th): Lite-On Technology, King Yuan Electronics, ASE Industrial

We analyzed TWSE short interest report for the past week and highlighted short interest changes in Lite-On Technology (2301 TT), King Yuan...

Ke Yan, CFA, FRM

UMC (2303.TT; UMC.US): The Outlook for 3Q24 Has Reached a Slightly Upside QoQ.

UMC's 3rd quarter outlook shows a slight upside, with estimated overall utilization at 65-70% and benefits from Novatek shipping OLED DDIC to Apple.

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales? PC/server, PMIC, CMOS sensor/touch controller, GaAs RF, gaming GPU card, memory...

Andrew Lu

Why Is Vanguard Semi Becoming to a Bad Student, Cyclical or Structural?

Why Is Vanguard Semi Becoming to a Bad Student? Some Cyclical or some Structural reasons for the weaknesses coupled with three reasons suggested...

Andrew Lu

Stories Behind the Reported Nov 2023 Taiwan Semi/Tech Sales

Stories Behind the Reported Nov 2023 Taiwan Semi/Tech Sales. More clear y/y improvement for 8/12" raw wafer, WiFi IC, GaAs RF/VCSEL, and memory...

Andrew Lu

TWSE Short Interest Weekly (Nov 28th): Lite-On Technology, King Yuan Electronics, ASE Industrial

We analyzed TWSE short interest report for the past week and highlighted short interest changes in Lite-On Technology (2301 TT), King Yuan...

Ke Yan, CFA, FRM

UMC (2303.TT; UMC.US): The Outlook for 3Q24 Has Reached a Slightly Upside QoQ.

​UMC's 3rd quarter outlook shows a slight upside, with estimated overall utilization at 65-70% and benefits from Novatek shipping OLED DDIC to Apple.

Patrick Liao

UMC's 3rd quarter outlook shows a slight upside, with estimated overall utilization at 65-70% and benefits from Novatek shipping OLED DDIC to Apple.