Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Apparently, on news of this new Huawei chip in WSJ, Nvidia’s stock decline -2% yesterday. That’s strange – not new news, the real issue is new US export license requirements.</li>
<li>Nvidia’s problem is not Huawei, but US restrictions on selling GPU to China. Nvidia announced writing off US$5.5bn on 9 April 2025 (for H20). AMD estimates US$800m (for MI308).</li>
<li>Assume that Nvidia and AMD will not sell any AI chips to China. Same for HBM memory.</li>
</ul>


Apparently, on news of this new Huawei chip in WSJ, Nvidia’s stock decline -2% yesterday. That’s strange – not new news, the real issue is new US export license requirements.
Nvidia’s problem is not Huawei, but US restrictions on selling GPU to China. Nvidia announced writing off US$5.5bn on 9 April 2025 (for H20). AMD estimates US$800m (for MI308).
Assume that Nvidia and AMD will not sell any AI chips to China. Same for HBM memory.


Is Huawei New AI Chip Is Bad for Nvidia? New US Export Licensing Is the Real Issue (Part 2)

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

Event-Driven

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. </li>
<li>Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.</li>
<li>There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.</li>
</ul>


Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though. 
Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.


Korea: Short Selling Is Back in March; Trade Ideas

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>This reports addresses the alarmist wrong conclusions over DeepSeek, especially over GPU usage and costs</li>
<li>This said, DeepSeek shows that Foundational models are commoditizing. Applications will be more resilient and profitable, ie customized with attached services</li>
<li>We are just at the beginning of the AI revolution with language models. Physical models are next and massive Application deployment.  </li>
</ul>


This reports addresses the alarmist wrong conclusions over DeepSeek, especially over GPU usage and costs
This said, DeepSeek shows that Foundational models are commoditizing. Applications will be more resilient and profitable, ie customized with attached services
We are just at the beginning of the AI revolution with language models. Physical models are next and massive Application deployment.  


DeepSeek and Market Over-Reaction. Nvidia, Broadcom, Marvell, TSMC, SK Hynix

<ul>
<li>FY24 AI revenue as guided US$12.2bn. 1Q25 AI revenue to increase 65% YoY. FY27 “serviceable market” or “opportunity” could reach US$60-90bn. Actual revenues could be ~70% of that.</li>
<li>Mngt announced another 2 hyperscale customers (one is Apple). At least 1 new new customer could add significant revenues before FY27 (adding to the 60-90bn above). </li>
<li>Stock up 14% aftermarket, trading at 32x FY25 EPS. We expect Consensus EPS to revise up 10-20%. Nvidia trades at 32x next FY (FY26). Positive to suppliers Hynix and TSMC.</li>
</ul>


FY24 AI revenue as guided US$12.2bn. 1Q25 AI revenue to increase 65% YoY. FY27 “serviceable market” or “opportunity” could reach US$60-90bn. Actual revenues could be ~70% of that.
Mngt announced another 2 hyperscale customers (one is Apple). At least 1 new new customer could add significant revenues before FY27 (adding to the 60-90bn above). 
Stock up 14% aftermarket, trading at 32x FY25 EPS. We expect Consensus EPS to revise up 10-20%. Nvidia trades at 32x next FY (FY26). Positive to suppliers Hynix and TSMC.


Broadcom: AI Hyper-Growth to Continue – Worries of a Slowdown Are Wrong – Positive to SK Hynix, TSMC

<ul>
<li>The Semiconductor industry associations report re-accelerating Semi sales, and increase 2024-25 forecasts. This is due to higher AI / Accelerators, HBM Memory but the rest of the market remains sluggish</li>
<li>TSMC remains on its high growth plateau at 34% YoY, driven by AI and 3nm. UMC remains on a sluggish recovery at 7% YoY.</li>
<li>AMD, Nvidia, SK Hynix, TSMC: stocks are not expensive on PE relative to earnings growth. Non-Consensus: we think AMD and SK Hynix are worth a serious look.</li>
</ul>


The Semiconductor industry associations report re-accelerating Semi sales, and increase 2024-25 forecasts. This is due to higher AI / Accelerators, HBM Memory but the rest of the market remains sluggish
TSMC remains on its high growth plateau at 34% YoY, driven by AI and 3nm. UMC remains on a sluggish recovery at 7% YoY.
AMD, Nvidia, SK Hynix, TSMC: stocks are not expensive on PE relative to earnings growth. Non-Consensus: we think AMD and SK Hynix are worth a serious look.


Semiconductor Sales Reaccelerating, AI Accelerators Accelerating:  AMD, AVGO, NVDA, SK Hynix, TSMC

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

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SK Hynix (000660 KS)

Is Huawei New AI Chip Is Bad for Nvidia? New US Export Licensing Is the Real Issue (Part 2)

News of Huawei chip impacts Nvidia stock, but real issue is US export restrictions on selling GPUs to China. Nvidia and AMD facing significant...

Nicolas Baratte

Korea: Short Selling Is Back in March; Trade Ideas

Short selling in Korea commences from Monday. There will be a lot of interest in shorting stocks/sectors depending on how they have performed since...

Brian Freitas

DeepSeek and Market Over-Reaction. Nvidia, Broadcom, Marvell, TSMC, SK Hynix

Article debunks alarmist claims about DeepSeek, especially GPU usage and cost. The AI revolution is just beginning, with physical models and...

Nicolas Baratte

Broadcom: AI Hyper-Growth to Continue – Worries of a Slowdown Are Wrong – Positive to SK Hynix, TSMC

Broadcom strong growth potential in AI revenue continues. US$12.2bn AI revenues in FY24 , could grow to a market opportunity of $60-90bn in FY27....

Nicolas Baratte

Semiconductor Sales Reaccelerating, AI Accelerators Accelerating: AMD, AVGO, NVDA, SK Hynix, TSMC

Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...

Nicolas Baratte

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Market Cap (USDm)

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Is Huawei New AI Chip Is Bad for Nvidia? New US Export Licensing Is the Real Issue (Part 2)

​News of Huawei chip impacts Nvidia stock, but real issue is US export restrictions on selling GPUs to China. Nvidia and AMD facing significant...

Nicolas Baratte

Korea: Short Selling Is Back in March; Trade Ideas

Short selling in Korea commences from Monday. There will be a lot of interest in shorting stocks/sectors depending on how they have performed since...

Brian Freitas

DeepSeek and Market Over-Reaction. Nvidia, Broadcom, Marvell, TSMC, SK Hynix

​Article debunks alarmist claims about DeepSeek, especially GPU usage and cost. The AI revolution is just beginning, with physical models and...

Nicolas Baratte

Broadcom: AI Hyper-Growth to Continue – Worries of a Slowdown Are Wrong – Positive to SK Hynix, TSMC

Broadcom strong growth potential in AI revenue continues. US$12.2bn AI revenues in FY24 , could grow to a market opportunity of $60-90bn in FY27....

Nicolas Baratte

Semiconductor Sales Reaccelerating, AI Accelerators Accelerating: AMD, AVGO, NVDA, SK Hynix, TSMC

​Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...

Nicolas Baratte

News of Huawei chip impacts Nvidia stock, but real issue is US export restrictions on selling GPUs to China. Nvidia and AMD facing significant...

Article debunks alarmist claims about DeepSeek, especially GPU usage and cost. The AI revolution is just beginning, with physical models and...

Semiconductor sales are re-accelerating due to AI Accelerators and related HBM memory. AMD and SK Hynix stocks are out of favor and worth...