Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.</li>
<li>TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.</li>
<li>We attribute Nvidia customers' sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.</li>
</ul>


Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
We attribute Nvidia customers' sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.


From Nvidia Results to See Supply Chain Stories?

Thematic (Sector/Industry)

<ul>
<li>After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;</li>
<li>Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;</li>
<li>Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.</li>
</ul>


After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;
Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;
Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.


What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Super Micro Computer, Inc. (NASDAQ:SMCI), a once-rising star in the AI server and data center market, faces an escalating series of challenges that have severely impacted investor confidence.</li><li>In the latest and most alarming development, SMCI disclosed that its auditor, Ernst & Young (EY), resigned after raising critical issues about the company's governance, board independence, and internal financial controls.</li><li>This resignation follows months of disagreements between EY and SMCI, during which EY stated they were "unwilling to be associated with the financial statements prepared by management." As SMCI scrambles to address these governance issues, it has appointed a special board committee and hired a forensic accounting firm to investigate its internal controls.</li></ul>

Super Micro Computer, Inc. (NASDAQ:SMCI), a once-rising star in the AI server and data center market, faces an escalating series of challenges that have severely impacted investor confidence.In the latest and most alarming development, SMCI disclosed that its auditor, Ernst & Young (EY), resigned after raising critical issues about the company's governance, board independence, and internal financial controls.This resignation follows months of disagreements between EY and SMCI, during which EY stated they were "unwilling to be associated with the financial statements prepared by management." As SMCI scrambles to address these governance issues, it has appointed a special board committee and hired a forensic accounting firm to investigate its internal controls.

Super Micro Computer (SMCI) in Crisis? Auditor Resignation Sparks Major Concerns!

<ul><li>In a major development that’s turning heads on Wall Street, Super Micro Computer (SMCI) announced it is now shipping over 100,000 GPUs per quarter, specifically targeting the surging artificial intelligence (AI) market.</li><li>This is a significant leap for the company as it seeks to capitalize on the growing demand for high-performance computing power required by AI training models and data-heavy applications.</li><li>With AI dominating conversations across industries, GPUs have become critical components in data centers, and Super Micro’s ability to ship these units at scale, coupled with its competitive pricing, could potentially generate billions in revenue.</li></ul>

In a major development that’s turning heads on Wall Street, Super Micro Computer (SMCI) announced it is now shipping over 100,000 GPUs per quarter, specifically targeting the surging artificial intelligence (AI) market.This is a significant leap for the company as it seeks to capitalize on the growing demand for high-performance computing power required by AI training models and data-heavy applications.With AI dominating conversations across industries, GPUs have become critical components in data centers, and Super Micro’s ability to ship these units at scale, coupled with its competitive pricing, could potentially generate billions in revenue.

Super Micro Shipping Over 100,000 AI GPUs Each Quarter! What It Means for Investors

<ul><li>Super Micro Computer Inc. (SMCI) has found itself in the crosshairs of controversy following a recent report from Hindenburg Research and the company's delayed 10-K filing.</li><li>As the tech giant continues to ride the wave of AI enthusiasm, the latest developments have cast a shadow over its stellar growth narrative.</li><li>While SMCI’s impressive revenue figures and expanding market share in AI-driven solutions have attracted considerable investor attention, the company’s past accounting missteps, unresolved regulatory concerns, and potential internal control weaknesses suggest a need for heightened caution.</li></ul>

Super Micro Computer Inc. (SMCI) has found itself in the crosshairs of controversy following a recent report from Hindenburg Research and the company's delayed 10-K filing.As the tech giant continues to ride the wave of AI enthusiasm, the latest developments have cast a shadow over its stellar growth narrative.While SMCI’s impressive revenue figures and expanding market share in AI-driven solutions have attracted considerable investor attention, the company’s past accounting missteps, unresolved regulatory concerns, and potential internal control weaknesses suggest a need for heightened caution.

Hindenburg Strikes Again: SMCI's 10K Delay Raises Red Flags

United States

Super Micro Computer, Inc. designs, develops, manufactures and sells server solutions based on modular and open-standard x86 architecture. The Company's products include servers, motherboards, chassis, and accessories.

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Super Micro Computer (SMCI US)

From Nvidia Results to See Supply Chain Stories?

From Nvidia Results to See Supply Chain Stories? Post 35% price gain in a quarter, many good news already factored into the share price. We...

Andrew Lu

What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

Names to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025? Different from consensus, we expect non AI server market...

Andrew Lu

Super Micro Computer (SMCI) in Crisis? Auditor Resignation Sparks Major Concerns!

Super Micro Computer, Inc. (NASDAQ:SMCI), a once-rising star in the AI server and data center market, faces an escalating series of challenges...

Baptista Research

Super Micro Shipping Over 100,000 AI GPUs Each Quarter! What It Means for Investors

In a major development that’s turning heads on Wall Street, Super Micro Computer (SMCI) announced it is now shipping over 100,000 GPUs per...

Baptista Research

Hindenburg Strikes Again: SMCI's 10K Delay Raises Red Flags

Super Micro Computer Inc. (SMCI) has found itself in the crosshairs of controversy following a recent report from Hindenburg Research and the...

Baptista Research

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