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

Thematic (Sector/Industry)

<ul>
<li>August's WSTS semiconductor revenues registered a record high of more than $53 billion</li>
<li>Nobody seemed to notice, including the organization making the announcement</li>
<li>There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales</li>
</ul>


August's WSTS semiconductor revenues registered a record high of more than $53 billion
Nobody seemed to notice, including the organization making the announcement
There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales


Semis Just Broke a Record.  Why Did Nobody Notice?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei reported mid-day that <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> made a ¥1.3trln takeover proposal to <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> in February. That's big news. Last year Denso bought ~5%.</li>
<li>The goal would be to be dominant in power chips and to serve Toyota Group. There is a big Toshiba angle here too. Rohm bought into Toshiba, also has JVs.</li>
<li>Toshiba owns a big stake in Kioxia which trickles down to Rohm. Much will be made of the look-through valuation. It's complicated.</li>
</ul>


The Nikkei reported mid-day that Denso Corp (6902 JP) made a ¥1.3trln takeover proposal to ROHM Co Ltd (6963 JP) in February. That's big news. Last year Denso bought ~5%.
The goal would be to be dominant in power chips and to serve Toyota Group. There is a big Toshiba angle here too. Rohm bought into Toshiba, also has JVs.
Toshiba owns a big stake in Kioxia which trickles down to Rohm. Much will be made of the look-through valuation. It's complicated.


[Japan M&A] Denso (6902) Reportedly Made a ¥1.3trln Takeover Proposal to Rohm (6963). Light & Iffy.

Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>2Q is inline, revenue and margins look like a beat but that’s weaker JPY and higher utilization as the firm is increasing inventory, expecting a better 2H25. </li>
<li>3Q guide is flat QoQ, the YoY recovery continues (2Q -9%, 3Q -4%). For 4Q, management expects a “modest” flattish or slight increase QoQ, which implies at least +13% YoY</li>
<li>The stock is cheap, but “overall demand for automotive, we still have no clue as to how that will unfold” and short-term, Auto growth depends on China</li>
</ul>


2Q is inline, revenue and margins look like a beat but that’s weaker JPY and higher utilization as the firm is increasing inventory, expecting a better 2H25. 
3Q guide is flat QoQ, the YoY recovery continues (2Q -9%, 3Q -4%). For 4Q, management expects a “modest” flattish or slight increase QoQ, which implies at least +13% YoY
The stock is cheap, but “overall demand for automotive, we still have no clue as to how that will unfold” and short-term, Auto growth depends on China


Renesas 2Q25: Revenue Inflexion Is Visible but Management Cautious

<ul>
<li>Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.</li>
<li>Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.</li>
<li>2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.</li>
</ul>


Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.
Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.
2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.


Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a> to international investors.</li>
<li>The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday's close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.</li>
<li>We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.</li>
</ul>



Denso Corp (6902 JP) is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of Renesas Electronics (6723 JP) to international investors.
The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday's close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.
We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.


Renesas Electronics (6723 JP): Denso Exits as Stock Price Falters

Japan

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

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Renesas Electronics (6723 JP)

Semis Just Broke a Record. Why Did Nobody Notice?

August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...

Jim Handy

[Japan M&A] Denso (6902) Reportedly Made a ¥1.3trln Takeover Proposal to Rohm (6963). Light & Iffy.

Denso has proposed a (lowball) takeover to Rohm, currently in an investment/restructuring phase, highlighting Rohm's value. The register is wide...

Travis Lundy

Renesas 2Q25: Revenue Inflexion Is Visible but Management Cautious

Renesas 2Q results beat due to FX, no impact from US import tariff, higher utilization. Uncertainty remains on automotive demand and short-term...

Nicolas Baratte

Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Nicolas Baratte