Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>Blended ASP of decline of 1% q/q in the past two quarters in 2H23, better than 3-10% q/q decline during 3Q22-2Q23, resulting in Tesla's blended ASP decline to decelerate. </li>
<li>Due to Tesla's cost cutting efforts with nice inventory control, we calculates profits/EV rebounded nicely by 21% q/q to US$3,490 per EV in 4Q23, much nicer than no profits.</li>
<li>Good improvement on its FSD Beta version 12.1.2 lately might become a pure profits/EV boost by incremental subscription of US$10,000-15,000 per EV or monthly fee by existing Tesla owners.</li>
</ul>


Blended ASP of decline of 1% q/q in the past two quarters in 2H23, better than 3-10% q/q decline during 3Q22-2Q23, resulting in Tesla's blended ASP decline to decelerate. 
Due to Tesla's cost cutting efforts with nice inventory control, we calculates profits/EV rebounded nicely by 21% q/q to US$3,490 per EV in 4Q23, much nicer than no profits.
Good improvement on its FSD Beta version 12.1.2 lately might become a pure profits/EV boost by incremental subscription of US$10,000-15,000 per EV or monthly fee by existing Tesla owners.


Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Taiwan Tech Plays Have Soared Since TSMC's Strong Outlook, and SK Hynix Reported a Return to Op Profit</li>
<li>Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron</li>
<li>Key Upcoming Events -- Intel, Microsoft, Mediatek, UMC Results Ahead</li>
</ul>


Taiwan Tech Plays Have Soared Since TSMC's Strong Outlook, and SK Hynix Reported a Return to Op Profit
Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
Key Upcoming Events -- Intel, Microsoft, Mediatek, UMC Results Ahead


Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events

<ul>
<li>TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.</li>
<li>Faster ramp on N3, likely N3E, N3P than competitor's. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024. </li>
<li>TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12" mature technology despite better demand 8" specialty technology. </li>
</ul>


TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.
Faster ramp on N3, likely N3E, N3P than competitor's. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024. 
TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12" mature technology despite better demand 8" specialty technology. 


What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors

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

<h2>Summary</h2>
<a href="https://www.smartkarma.com/entities/11230" target="_blank" data-smartkarma-citation="entities:11230:1"></a>
<a href="https://www.smartkarma.com/entities/11230" target="_blank" data-smartkarma-citation="entities:11230:1">Taiwan Semiconductor Mfg Co</a> has dominated the foundry segment over the past two decades. With revenues of $33 billion in 2017, the company had a 56% share of the foundry market and was over five times the size of its nearest competitor, Globalfoundries. Under the visionary leadership of Morris Chang, TSMC effectively invented the fabless model. Originally mocked by former AMD CEO Gerry Sanders who once famously quipped that “real men own fabs”, the fabless model has evolved into a thriving ecosystem, one which has facilitated the meteoric rise of some of the biggest names in the semiconductor segment including <a href="https://www.smartkarma.com/entities/666" target="_blank" data-smartkarma-citation="entities:666:1">Apple</a>, <a href="https://www.smartkarma.com/entities/969" target="_blank" data-smartkarma-citation="entities:969:1">Qualcomm </a>and <a href="https://www.smartkarma.com/entities/5891" target="_blank" data-smartkarma-citation="entities:5891:1">Nvidia</a>.  
TSMC’s success has been predicated upon the company's so-called Trinity of Strengths, namely process leadership, manufacturing excellence and customer trust. In today’s highly competitive foundry landscape, those strengths have never been more significant.
While the smartphone processor business has been central to TSMC's growth in recent years with Apple accounting for some 22% of revenues, the company is well positioned to diversify and benefit from high, secular growth trends in IoT, Automotive and AI acceleration. Even more significantly, TSMC is set to compete for the first time with Intel in the lucrative data center market by virtue of its role in manufacturing server chips for <a href="https://www.smartkarma.com/entities/19009" target="_blank" data-smartkarma-citation="entities:19009:1">Advanced Micro Devices</a> and a growing swathe of ARM-based server initiatives lead by none other than <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon</a>. 
Between 2006 and 2017, TSMC grew at a CAGR of 9.8% in NT$ terms, easily outpacing growth of both the broader semiconductor segment and its foundry peers. For the period 2019-2022, we model TSMC growing at a slightly lower CAGR of 8.36%, but nonetheless more than double the anticipated CAGR for the semiconductor segment as a whole.

Summary

Taiwan Semiconductor Mfg Co has dominated the foundry segment over the past two decades. With revenues of $33 billion in 2017, the company had a 56% share of the foundry market and was over five times the size of its nearest competitor, Globalfoundries. Under the visionary leadership of Morris Chang, TSMC effectively invented the fabless model. Originally mocked by former AMD CEO Gerry Sanders who once famously quipped that “real men own fabs”, the fabless model has evolved into a thriving ecosystem, one which has facilitated the meteoric rise of some of the biggest names in the semiconductor segment including Apple, Qualcomm and Nvidia.  
TSMC’s success has been predicated upon the company's so-called Trinity of Strengths, namely process leadership, manufacturing excellence and customer trust. In today’s highly competitive foundry landscape, those strengths have never been more significant.
While the smartphone processor business has been central to TSMC's growth in recent years with Apple accounting for some 22% of revenues, the company is well positioned to diversify and benefit from high, secular growth trends in IoT, Automotive and AI acceleration. Even more significantly, TSMC is set to compete for the first time with Intel in the lucrative data center market by virtue of its role in manufacturing server chips for Advanced Micro Devices and a growing swathe of ARM-based server initiatives lead by none other than Amazon. 
Between 2006 and 2017, TSMC grew at a CAGR of 9.8% in NT$ terms, easily outpacing growth of both the broader semiconductor segment and its foundry peers. For the period 2019-2022, we model TSMC growing at a slightly lower CAGR of 8.36%, but nonetheless more than double the anticipated CAGR for the semiconductor segment as a whole. 

A Bull Investment Case for TSMC (Summary Version)

<ul>
<li>Chairman 69 years old Dr. Liu will retire and 70 years old CEO Dr. Wei will step up. What story do we believe? Will TSMC to regain its strong outperperformance?</li>
<li>Positive impacts: we expect Arizona fab equipment move-in and ramp up might be further delayed if no subsidies are granted; two teams competing to one voice/team/direction.</li>
<li>Three risks: 1. Dr. Wei at his age of 70 without a strong management backup; 2. Dr. Wei might make a wrong decision deeply; 3. absolute power corrupts.</li>
</ul>


Chairman 69 years old Dr. Liu will retire and 70 years old CEO Dr. Wei will step up. What story do we believe? Will TSMC to regain its strong outperperformance?
Positive impacts: we expect Arizona fab equipment move-in and ramp up might be further delayed if no subsidies are granted; two teams competing to one voice/team/direction.
Three risks: 1. Dr. Wei at his age of 70 without a strong management backup; 2. Dr. Wei might make a wrong decision deeply; 3. absolute power corrupts.


TSMC Chairman to Retire, + or — Impacts to Shareholders

Taiwan

Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs.  The Company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.  Taiwan Semiconductor is an affiliate of Philips Electronics N.V.

TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

TSMC (Taiwan Semiconductor Manufacturing) - ADR

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TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV

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A Bull Investment Case for TSMC (Summary Version)

As we approach the 5 year anniversary of this SK original on TSMC, I'm quite proud of the how the analysis it contains has stood the test of time....

William Keating

TSMC Chairman to Retire, + or — Impacts to Shareholders

TSMC Chairman to Retire, + or — Impacts to Shareholders; Chairman 69 years old Dr. Liu will retire and 70 years old CEO Dr. Wei will step up. What...

Andrew Lu

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Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV

Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV. Due to pricing stability and Tesla's cost cutting efforts, profits/EV...

Andrew Lu

Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events

​A strong outlook from TSMC and SK Hynix's return to op profit have boosted Taiwan tech; Why Microsoft's Copilot will accelerate demand for DRAM;...

Vincent Fernando, CFA

What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors

What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors; TSMC expects 2024 semi sector in recovery with 20...

Andrew Lu

A Bull Investment Case for TSMC (Summary Version)

As we approach the 5 year anniversary of this SK original on TSMC, I'm quite proud of the how the analysis it contains has stood the test of time....

William Keating

TSMC Chairman to Retire, + or — Impacts to Shareholders

TSMC Chairman to Retire, + or — Impacts to Shareholders; Chairman 69 years old Dr. Liu will retire and 70 years old CEO Dr. Wei will step up. What...

Andrew Lu

A strong outlook from TSMC and SK Hynix's return to op profit have boosted Taiwan tech; Why Microsoft's Copilot will accelerate demand for DRAM;...