Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/western-digital-corp" target="_blank" data-smartkarma-citation="entities:1094:1" rel="noopener">Western Digital (WDC US)</a> announced earnings on October 28, and provided a positive outlook on its business despite COVID-19 and the US-China trade war.  Demand for the company's technologies remains strong, and these challenges appear to have only a modest impact on its business.

Western Digital (WDC US) announced earnings on October 28, and provided a positive outlook on its business despite COVID-19 and the US-China trade war.  Demand for the company's technologies remains strong, and these challenges appear to have only a modest impact on its business.

Western Digital: COVID & Trade War Impacts Manageable

Thematic (Sector/Industry)

China's flagship NAND flash maker, YMTC, is already in production and certain prognosticators predict that the company will take an 8% share of the  NAND flash market in 2021.  This Smartkarma Insight evaluates the company's current status and comes to the conclusion that its success with its current endeavor is less likely than these prognosticators would believe.

China's flagship NAND flash maker, YMTC, is already in production and certain prognosticators predict that the company will take an 8% share of the  NAND flash market in 2021.  This Smartkarma Insight evaluates the company's current status and comes to the conclusion that its success with its current endeavor is less likely than these prognosticators would believe.

Is YMTC Really a Threat to the NAND Flash Memory Business?

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Advanced Micro Devices / Equity Bottom-Up

As we had speculated previously, it turns out that AMD’s teaser benchmarks for its graphics cards, at the Ryzen 5000 series presentation, were not for its highest end card. The company’s presentation on its newest line-up underscores the enormous improvement in competitiveness that AMD has engineered over the last few years and has implications not just for its direct competitors but also supplier TSMC and Nvidia customer, Nintendo.

As we had speculated previously, it turns out that AMD’s teaser benchmarks for its graphics cards, at the Ryzen 5000 series presentation, were not for its highest end card. The company’s presentation on its newest line-up underscores the enormous improvement in competitiveness that AMD has engineered over the last few years and has implications not just for its direct competitors but also supplier TSMC and Nvidia customer, Nintendo.

AMD – RX6000 Series Should Make Intel and Nvidia Sweat and TSMC and Nintendo Smile a Touch

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a> is currently trading at more than 2 standard deviations above its 5yr- and 10yr historical average PE range.  A premium makes sense given a significant improvement in their competitive positioning and being in the early stages of a cyclical upswing given the advent of 5G, which should also accelerate the adoption of Internet-of-Things applications. 
This raises the question as to what a fair valuation multiple for TSMC should be. In this insight I make a comparative valuation by looking at, arguably, the two most important companies in TSMC’s value chain, both dominant in their competitive environments, namely TSMC’s largest supplier <a href="https://www.smartkarma.com/entities/asml-holding-nv" target="_blank" data-smartkarma-citation="entities:21097:1" rel="noopener">ASML Holding NV (ASML NA)</a> and their largest customer <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple Inc (AAPL US)</a>. 
My analysis focuses on the companies’ competitive positioning, geographic exposure, customer concentration, growth profile and outlook, cash flow generation, balance sheets, capital allocation and returns on invested capital to assess what a fair relative valuation might look like.

TSMC (2330 TT) is currently trading at more than 2 standard deviations above its 5yr- and 10yr historical average PE range.  A premium makes sense given a significant improvement in their competitive positioning and being in the early stages of a cyclical upswing given the advent of 5G, which should also accelerate the adoption of Internet-of-Things applications. 
This raises the question as to what a fair valuation multiple for TSMC should be. In this insight I make a comparative valuation by looking at, arguably, the two most important companies in TSMC’s value chain, both dominant in their competitive environments, namely TSMC’s largest supplier ASML Holding NV (ASML NA) and their largest customer Apple Inc (AAPL US). 
My analysis focuses on the companies’ competitive positioning, geographic exposure, customer concentration, growth profile and outlook, cash flow generation, balance sheets, capital allocation and returns on invested capital to assess what a fair relative valuation might look like.

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

<a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel</a> last week <a href="https://d1io3yog0oux5.cloudfront.net/_ca7702ae49c039154861b9bb46736c56/intel/news/2020-10-22_Intel_Reports_Third_Quarter_2020_Financial_1424.pdf" target="_blank" rel="noopener">reported</a> Q3 revenues of $18.3 billion, marginally exceeding their forecast. Net income came in at $4.3 billion, again largely in line with expectations. Looking ahead, Intel pegged fourth quarter earnings at a respectable $17.4 billion, implying a FY 2020 revenue of $73.5 billion, $300 million higher than the July forecast and $1.5 billion higher than the January forecast. These notable results notwithstanding, Intel's share price was immediately down 10% the following day and, after the latest market rout on Monday, is now down 14% since just prior to earnings. What was it about Intel's latest earnings report that triggered such a negative response? Here's what we think is going on.

Intel last week reported Q3 revenues of $18.3 billion, marginally exceeding their forecast. Net income came in at $4.3 billion, again largely in line with expectations. Looking ahead, Intel pegged fourth quarter earnings at a respectable $17.4 billion, implying a FY 2020 revenue of $73.5 billion, $300 million higher than the July forecast and $1.5 billion higher than the January forecast. These notable results notwithstanding, Intel's share price was immediately down 10% the following day and, after the latest market rout on Monday, is now down 14% since just prior to earnings. What was it about Intel's latest earnings report that triggered such a negative response? Here's what we think is going on. 

Intel. Reality Bites As Margins Shrink On The Back Of Mix, 10nm Yields & Growing Competition

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)

Western Digital: COVID & Trade War Impacts Manageable

Western Digital continues to perform at a level only slightly lower than normal despite challenges posed by COVID-19 pandemic and US-China trade war.

Jim Handy

Is YMTC Really a Threat to the NAND Flash Memory Business?

YMTC is China's path to semiconductor autonomy, but its current path will lead to failure. The company needs a technology partner.

Jim Handy

AMD – RX6000 Series Should Make Intel and Nvidia Sweat and TSMC and Nintendo Smile a Touch

AMD's ability to suddenly match or better Intel and Nvidia in CPUs and GPUs bodes well for the company but we also feel that GPU developments are...

Mio Kato

TSMC: A Comparative Valuation

In this insight, I make a comparative valuation by looking at two value-chain companies, both dominant in their own right, namely TSMC’s largest...

Wium Malan, CFA

Intel. Reality Bites As Margins Shrink On The Back Of Mix, 10nm Yields & Growing Competition

Despite delivering results slightly ahead of expectations and updating the FY 2020 outlook by a further $300 million, Intel shares are presently...

William Keating

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