Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

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?

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

<ul><li>A quick discussion of the companies that have reported so far, and my thoughts on the semiconductor stock space</li><li>Pretty much the entire index is going to receive inflows at the expense of the top 8 names.</li><li>Microsoft, Google, Amazon, Nvidia, Meta, Apple, and Tesla will all be cut from the index weight and redistributed into smaller names on <a href="https://www.morningstar.co.uk/uk/news/237279/index-investors-beware-the-nasdaq-is-rebalancing-next-week.aspx" target="_blank" rel="noopener">July 24, 2023</a>.</li></ul>

A quick discussion of the companies that have reported so far, and my thoughts on the semiconductor stock spacePretty much the entire index is going to receive inflows at the expense of the top 8 names.Microsoft, Google, Amazon, Nvidia, Meta, Apple, and Tesla will all be cut from the index weight and redistributed into smaller names on July 24, 2023.

Nasdaq Rebalance, Nanya, Camtek, Nordic Semi, Aehr Test, and Positioning

Taiwan Tech Focused Senior Analyst

Patrick Liao

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>Revenue in 3Q25 was 7.8% higher than in 2Q25, in line with stronger seasonal demand. GM: 22.0% in 3Q25, compared with 20.4% in 2Q25 and 20.5% in 3Q24.</li>
<li>The Company expects: Revenue Flat to up 2% quarter-over-quarter (QoQ). Gross Margin: Between 18% and 20%.</li>
<li>SMIC’s stock price has risen 160.7% year-to-date in 2025, outperforming <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-sp-adr" target="_blank" data-smartkarma-citation="entities:8587:1" rel="noopener">Taiwan Semiconductor (TSMC) - ADR (TSM US)</a> at 44.2% and <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> at 10.8%.</li>
</ul>


Revenue in 3Q25 was 7.8% higher than in 2Q25, in line with stronger seasonal demand. GM: 22.0% in 3Q25, compared with 20.4% in 2Q25 and 20.5% in 3Q24.
The Company expects: Revenue Flat to up 2% quarter-over-quarter (QoQ). Gross Margin: Between 18% and 20%.
SMIC’s stock price has risen 160.7% year-to-date in 2025, outperforming Taiwan Semiconductor (TSMC) - ADR (TSM US) at 44.2% and United Microelectron Sp Adr (UMC US) at 10.8%.


SMIC (981.HK): Although GM May Decline Slightly, Revenue Is Expected to Continue Growing in 4Q25.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>Nvidia Pushes TSMC for More Capacity as AI Chip Demand Surges</li>
<li>Apple Expands Its Satellite Ambitions for iPhones Beyond Just Emergencies -- A Step Towards Disintermediating Telcos?</li>
<li>Nvidia’s International HQ in Taipei Deal Clears Final Hurdle -- Boost for Taiwan 2026E-2027E</li>
</ul>


Nvidia Pushes TSMC for More Capacity as AI Chip Demand Surges
Apple Expands Its Satellite Ambitions for iPhones Beyond Just Emergencies -- A Step Towards Disintermediating Telcos?
Nvidia’s International HQ in Taipei Deal Clears Final Hurdle -- Boost for Taiwan 2026E-2027E


Taiwan Tech Weekly: Nvidia Asking TSMC for More Capacity; Apple to Disintermediate Telcos?

Technology / Semiconductor / Internet Research

Nicolas Baratte

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>TSMC and UMC 3Q revenues are slightly above Guidance / Consensus. In US$, TSMC revenues growing at 40% YoY. Legacy Fab UMC growing at 4%. </li>
<li>This will continue, even if AI / HPC growth is slowing into 2026, the gap will remain wide between AI / HPC (say 35% growth) and Legacy (5%). </li>
<li>Ongoing concerns of AI investment bubble reflect “a lack of imagination” (Lisa Su). Stick with the category winners Nvidia - SK Hynix - TSMC , followed by AMD - Micron.</li>
</ul>


TSMC and UMC 3Q revenues are slightly above Guidance / Consensus. In US$, TSMC revenues growing at 40% YoY. Legacy Fab UMC growing at 4%. 
This will continue, even if AI / HPC growth is slowing into 2026, the gap will remain wide between AI / HPC (say 35% growth) and Legacy (5%). 
Ongoing concerns of AI investment bubble reflect “a lack of imagination” (Lisa Su). Stick with the category winners Nvidia - SK Hynix - TSMC , followed by AMD - Micron.


Semi Revenues Divergence Continues. AI, HPC Growing at ~45%, Everything Legacy in the Slumps.

United States

GLOBALFOUNDRIES Inc. operates as a semiconductor contract manufacturing and design company. The Company offers chips designed for markets such as mobility, automotive, computing and wired connectivity, and consumer internet of things (IoT). GLOBALFOUNDRIES serves customers worldwide.

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GLOBALFOUNDRIES (GFS US)

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

Nasdaq Rebalance, Nanya, Camtek, Nordic Semi, Aehr Test, and Positioning

A quick discussion of the companies that have reported so far, and my thoughts on the semiconductor stock space Pretty much the entire index is...

Fabricated Knowledge

SMIC (981.HK): Although GM May Decline Slightly, Revenue Is Expected to Continue Growing in 4Q25.

SMIC's 3Q25 revenue up 7.8% from 2Q25, GM at 22.0%. Expects flat to 2% revenue growth QoQ, GM between 18% and 20%. Stock price up 160.7% YTD,...

Patrick Liao

Taiwan Tech Weekly: Nvidia Asking TSMC for More Capacity; Apple to Disintermediate Telcos?

Nvidia and Apple are both making strategic moves to secure more capacity and expand their reach in the tech industry, potentially disrupting...

Vincent Fernando, CFA

Semi Revenues Divergence Continues. AI, HPC Growing at ~45%, Everything Legacy in the Slumps.

TSMC and UMC beat revenue expectations in 3Q, with TSMC growing at 40% YoY. The gap between AI/HPC and Legacy Fab growth is expected to widen,...

Nicolas Baratte

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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

Nasdaq Rebalance, Nanya, Camtek, Nordic Semi, Aehr Test, and Positioning

A quick discussion of the companies that have reported so far, and my thoughts on the semiconductor stock space Pretty much the entire index is...

Fabricated Knowledge

SMIC (981.HK): Although GM May Decline Slightly, Revenue Is Expected to Continue Growing in 4Q25.

​SMIC's 3Q25 revenue up 7.8% from 2Q25, GM at 22.0%. Expects flat to 2% revenue growth QoQ, GM between 18% and 20%. Stock price up 160.7% YTD,...

Patrick Liao

Taiwan Tech Weekly: Nvidia Asking TSMC for More Capacity; Apple to Disintermediate Telcos?

​Nvidia and Apple are both making strategic moves to secure more capacity and expand their reach in the tech industry, potentially disrupting...

Vincent Fernando, CFA

Semi Revenues Divergence Continues. AI, HPC Growing at ~45%, Everything Legacy in the Slumps.

​TSMC and UMC beat revenue expectations in 3Q, with TSMC growing at 40% YoY. The gap between AI/HPC and Legacy Fab growth is expected to widen,...

Nicolas Baratte

SMIC's 3Q25 revenue up 7.8% from 2Q25, GM at 22.0%. Expects flat to 2% revenue growth QoQ, GM between 18% and 20%. Stock price up 160.7% YTD,...

Nvidia and Apple are both making strategic moves to secure more capacity and expand their reach in the tech industry, potentially disrupting...

TSMC and UMC beat revenue expectations in 3Q, with TSMC growing at 40% YoY. The gap between AI/HPC and Legacy Fab growth is expected to widen,...