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

Equity Bottom-Up

<ul>
<li>Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.</li>
<li>Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.</li>
<li>On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027</li>
</ul>


Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027


SUMCO's Sobering Outlook For Silicon Wafers

<ul>
<li>Global silicon wafer area shipments declined 10% QoQ in Q323 but customer inventory remains at historical highs and is showing no signs of declining</li>
<li>SUMCO's Operating Profit forecasted to fall by ¥8.6 billion QoQ in Q423 </li>
<li>The company vowed to make "substantial" production cuts in a bid to bring their inventory situation under control. </li>
</ul>


Global silicon wafer area shipments declined 10% QoQ in Q323 but customer inventory remains at historical highs and is showing no signs of declining
SUMCO's Operating Profit forecasted to fall by ¥8.6 billion QoQ in Q423 
The company vowed to make "substantial" production cuts in a bid to bring their inventory situation under control. 


Silicon Wafers. SUMCO Sounds The Alarm As Inventory Continues To Climb

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Y/Y improvement for LCD, PMIC, GaAs RF, gaming card, cooling system, semi equipment&amp;material, semi fab construction, memory, and foundry vendors but more y/y deterioration for WiFi and CMOS sensor vendors</li>
<li>After 6 vendors beating consensus, we might see AI server supply chain, large panel LCD driver, WiFi/networking, and NAND flash vendors in US to report a better than expected 1Q24.</li>
<li>We might see 8"/12" raw wafer (like Shin Etsu, SUMCO , National Silicon Industry, Siltronic AG) vendors in Japan, China, and Germany to report a worse than expected 1Q24.</li>
</ul>


Y/Y improvement for LCD, PMIC, GaAs RF, gaming card, cooling system, semi equipment&amp;material, semi fab construction, memory, and foundry vendors but more y/y deterioration for WiFi and CMOS sensor vendors
After 6 vendors beating consensus, we might see AI server supply chain, large panel LCD driver, WiFi/networking, and NAND flash vendors in US to report a better than expected 1Q24.
We might see 8"/12" raw wafer (like Shin Etsu, SUMCO , National Silicon Industry, Siltronic AG) vendors in Japan, China, and Germany to report a worse than expected 1Q24.


Early Signs from the Reported March/1Q24 Taiwan Semi/Tech Sales

<ul>
<li>Silicon wafers area shipments (in MSI) declined by 14.3% YoY in 2023</li>
<li>Wafer revenues also declined by 10.9% to $12.3 billion over the same period</li>
<li>We expect Q124 revenues to be down ~20% QoQ and anticipate a further 5% YoY decline in full year 2024 shipments</li>
</ul>


Silicon wafers area shipments (in MSI) declined by 14.3% YoY in 2023
Wafer revenues also declined by 10.9% to $12.3 billion over the same period
We expect Q124 revenues to be down ~20% QoQ and anticipate a further 5% YoY decline in full year 2024 shipments


Silicon Wafers Area Shipments Decline 14.3% YoY in 2023

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

<ul>
<li>We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.</li>
<li>Semiconductor inventory to sales and gross margins near record levels, hardware metrics are high as well but less extreme.</li>
<li>Formosa SUMCO, Macronix, Nanya Technology, Hon Hai Precision, and Flexium appear ahead of the inventory correction curve and well-placed as long positions for the current phase of the cycle.</li>
</ul>


We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.
Semiconductor inventory to sales and gross margins near record levels, hardware metrics are high as well but less extreme.
Formosa SUMCO, Macronix, Nanya Technology, Hon Hai Precision, and Flexium appear ahead of the inventory correction curve and well-placed as long positions for the current phase of the cycle.


Taiwan Tech: Who's Ahead of the Inventory Cycle?

Japan

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

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SUMCO Corp (3436 JP)

SUMCO's Sobering Outlook For Silicon Wafers

Q423 revenues of ¥105.1 billion, +5% QoQ but -10% YoY. Q124 revenues -17% QoQ to ¥87 billion. EBITDA -33% QoQ to ¥22.1 billion. AI demand will...

William Keating

Silicon Wafers. SUMCO Sounds The Alarm As Inventory Continues To Climb

SUMCO's Operating Profit forecasted to fall by ¥8.6 billion QoQ in Q423. The company vowed to make "substantial" production cuts in a bid to bring...

William Keating

Early Signs from the Reported March/1Q24 Taiwan Semi/Tech Sales

Early Signs from the Reported March/1Q24 Taiwan Semi/Tech Sales; we might see AI server, WiFi/networking, and NAND vendors in US to beat 1Q24 but...

Andrew Lu

Silicon Wafers Area Shipments Decline 14.3% YoY in 2023

Silicon wafers area shipments declined by 14.3% YoY in 2023 while revenues also declined by 10.9% to $12.3 billion. Q124 revenues will be down ~20%...

William Keating

Taiwan Tech: Who's Ahead of the Inventory Cycle?

We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.

Vincent Fernando, CFA

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