Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Guided down: ASML, Applied Materials, Tokyo Electron. Revised up: LAM. A number of reasons are mentioned for a slower outlook. China slowdown. TSMC lumpy. Export licenses. Geo-Globo uncertainty. </li>
<li>Yes, But: 1) Chinese firms bought too much equipment in 2022-24  2) Logic Capex of Intel Samsung will decline further  3) Chinese SPE vendors are gaining share </li>
<li>AI is real, HBM is real, SOCAMM is real, but TSMC and SK Hynix are not revising up Capex in 2025. Expect higher Capex in 2026 and 2027. </li>
</ul>


Guided down: ASML, Applied Materials, Tokyo Electron. Revised up: LAM. A number of reasons are mentioned for a slower outlook. China slowdown. TSMC lumpy. Export licenses. Geo-Globo uncertainty. 
Yes, But: 1) Chinese firms bought too much equipment in 2022-24  2) Logic Capex of Intel Samsung will decline further  3) Chinese SPE vendors are gaining share 
AI is real, HBM is real, SOCAMM is real, but TSMC and SK Hynix are not revising up Capex in 2025. Expect higher Capex in 2026 and 2027. 


SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

Director, Head of Research, Smartkarma

Pranav Rao

Director, Head of Research

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

<ul>
<li>Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ insights published over the past two weeks on Smartkarma</li>
<li>In this cut, we look through the <em>bubble </em>in Chinese tea company listings, the recent entertainment provided by Japanese M&amp;A situations and the varied ways analysts look at TSMC on Smartkarma</li>
<li>Want to dig deeper? Comment or message with the themes you think should be highlighted next time</li>
</ul>


Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ insights published over the past two weeks on Smartkarma
In this cut, we look through the bubble in Chinese tea company listings, the recent entertainment provided by Japanese M&amp;A situations and the varied ways analysts look at TSMC on Smartkarma
Want to dig deeper? Comment or message with the themes you think should be highlighted next time


Curator's Cut: "Bubble" Tea, Japan M&A 🍿& TSMC from Different Lenses

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>China was ahead of the US in AI semiconductor and applications in 2015-20. Huawei had a complete AI processor and software platform. Losing access to TSMC froze Huawei’s progress.</li>
<li>Most likely, Huawei new AI processor Ascend 910C is made by SMIC on 6nm. Power Efficiency of Ascend 910C is poor versus the latest Nvidia GPU, but similar to N-2.</li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a> 7-6nm and access to HBM memory are major limiting factor to the chip volumes and performance.</li>
</ul>


China was ahead of the US in AI semiconductor and applications in 2015-20. Huawei had a complete AI processor and software platform. Losing access to TSMC froze Huawei’s progress.
Most likely, Huawei new AI processor Ascend 910C is made by SMIC on 6nm. Power Efficiency of Ascend 910C is poor versus the latest Nvidia GPU, but similar to N-2.

Semiconductor Manufacturing International Corp (SMIC) (981 HK) 7-6nm and access to HBM memory are major limiting factor to the chip volumes and performance.


Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

<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>SK hynix derived ~25-30% of revenues from AI in 2024 (HBM, LP-DDR, eSSD). AI revenues will double in 2025. SK hynix’s lead, both roadmap, manufacturing, qualifications extends to 2026.</li>
<li>AI high growth also allows SK hynix to lower its exposure to commodity PC, Mobile, consumer segments. Hence, margins likely continue to increase in 2025-26.</li>
<li>Sk hynix’s lead over Samsung is sustainable for at least 2025-26.  AI-related ASP / margins aren’t cyclical, unlike commodity memory. The stock trades at a miserable 6x 2025 EPS.</li>
</ul>


SK hynix derived ~25-30% of revenues from AI in 2024 (HBM, LP-DDR, eSSD). AI revenues will double in 2025. SK hynix’s lead, both roadmap, manufacturing, qualifications extends to 2026.
AI high growth also allows SK hynix to lower its exposure to commodity PC, Mobile, consumer segments. Hence, margins likely continue to increase in 2025-26.
Sk hynix’s lead over Samsung is sustainable for at least 2025-26.  AI-related ASP / margins aren’t cyclical, unlike commodity memory. The stock trades at a miserable 6x 2025 EPS.


SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

Taiwan

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

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TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Nicolas Baratte

Curator's Cut: "Bubble" Tea, Japan M&A 🍿& TSMC from Different Lenses

Introducing the Curator's Cut fortnightly newsletter, featuring interesting themes from the Smartkarma network. Share your thoughts!

Pranav Rao

Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...

Nicolas Baratte

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

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...

Nicolas Baratte

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52-week Range

Market Cap (USDm)

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SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

​Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Nicolas Baratte

Curator's Cut: "Bubble" Tea, Japan M&A 🍿& TSMC from Different Lenses

​Introducing the Curator's Cut fortnightly newsletter, featuring interesting themes from the Smartkarma network. Share your thoughts!

Pranav Rao

Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

​Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...

Nicolas Baratte

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

SK Hynix Will Derive ~50% of Revenues from AI in 2025. Why Is the Stock Trading at 6x 2025 EPS?

​SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...

Nicolas Baratte

Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Introducing the Curator's Cut fortnightly newsletter, featuring interesting themes from the Smartkarma network. Share your thoughts!

Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...

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

SK hynix's AI revenues set to double in 2025, leading in roadmap and manufacturing, with sustainable lead over Samsung and potential for increased...