Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<ul>
<li>The 2023 vintage of "5 High Conviction Ideas" was commodity heavy with 4 of our 5 picks coming from this sector. Three out of five declined between 15-25%. </li>
<li>Our best performer was unloved <a href="https://www.smartkarma.com/entities/mongolian-mining-corp" target="_blank" data-smartkarma-citation="entities:4382:1" rel="noopener">Mongolian Mining (975 HK)</a> which returned 234% even beating <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a> YTD performance.  Miracles happen: Coal mining beats AI.</li>
<li>Our 2024 vintage of top ideas for the year will hopefully have a higher hit ratio. See below for more details which are our five high conviction ideas for 2024.</li>
</ul>


The 2023 vintage of "5 High Conviction Ideas" was commodity heavy with 4 of our 5 picks coming from this sector. Three out of five declined between 15-25%. 
Our best performer was unloved Mongolian Mining (975 HK) which returned 234% even beating NVIDIA Corp (NVDA US) YTD performance.  Miracles happen: Coal mining beats AI.
Our 2024 vintage of top ideas for the year will hopefully have a higher hit ratio. See below for more details which are our five high conviction ideas for 2024.


Overview of My Winners and Losers in 2023...and 5 High Conviction Ideas Going Into 2024

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales</li>
<li>By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.</li>
<li>We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.</li>
</ul>


By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales
By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.
We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.


A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

<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

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

<ul>
<li>Intel's results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.</li>
<li>New Meteor Lake chips for PCs, branded as 'Intel Core Ultra' will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.</li>
<li>Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.</li>
</ul>


Intel's results last week beat expectations by a wide margin, with margins recovering better than expected by the Street and guided to keep improving through 4Q23E.
New Meteor Lake chips for PCs, branded as 'Intel Core Ultra' will officially launch December 14th and are expected to drive demand for new AI-optimized PCs in 2024E.
Intel said that the PC industry completed its inventory digestion in 1H23, drove sequential demand growth in 3Q23, and this is expected to continue into 4Q23E.


PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years

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

<ul>
<li>Q323 revenues of $14.2 billion, some $800 million above the guided midpoint, down 8% YoY but up 10% sequentially.</li>
<li>Current quarter revenue guided up QoQ to $15.1 billion at the midpoint, shares up 10% </li>
<li>Intel is betting big on a return to a 300 million unit PC TAM. Is this realistic?</li>
</ul>


Q323 revenues of $14.2 billion, some $800 million above the guided midpoint, down 8% YoY but up 10% sequentially.
Current quarter revenue guided up QoQ to $15.1 billion at the midpoint, shares up 10% 
Intel is betting big on a return to a 300 million unit PC TAM. Is this realistic?


Intel. Beat & Raise Sends Shares Soaring After Hours

United States

Intel Corporation designs, manufactures, and sells computer components and related products.  The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products.

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Intel Corp (INTC US)

Overview of My Winners and Losers in 2023...and 5 High Conviction Ideas Going Into 2024

Our stand-out performer in FY23 was little loved Mongolia Mining. For FY24 we provide five new names which we think can perform strongly.

Nicolas Van Broekhoven

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC? Intel needs TSMC foundry services more than TSMC needs Intel as a foundry...

Andrew Lu

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

PC Monitor: Inventories Healthy & Intel Expects Over 100 Million AI PCs In Two Years

New Meteor Lake chips launching in December are anticipated to boost demand for AI-optimized PCs in 2024. The PC industry's inventory digestion is...

Vincent Fernando, CFA

Intel. Beat & Raise Sends Shares Soaring After Hours

Q323 revenues $14.2 billion, down 8% YoY but up 10% QoQ. Q423 guided up QoQ to $15.1 billion. Shares soar +10%. Intel is betting big on a return to...

William Keating

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