Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

ASE Technology Holding   / Equity Bottom-Up

<ul>
<li>4Q24 IC ATM sales recorded NT$162bn, up 1% QoQ, GM: 16.4%, down 0.1% QoQ. EMS sales were NT$74.9bn, down 1% QoQ mainly due to seasonality. </li>
<li>1Q25 EMS sales will decline slightly YoY, and OPM is down 0.13ppts YoY. IC-ATM sales will decline mid-single-digits QoQ and GM is down slightly more than 1% QoQ.</li>
<li>Believes it will bring upside from new US BIS policy to ban non-listed OSAT vendors (especially China vendors) to produce US-related chip, but can’t quantify at this moment.</li>
</ul>


4Q24 IC ATM sales recorded NT$162bn, up 1% QoQ, GM: 16.4%, down 0.1% QoQ. EMS sales were NT$74.9bn, down 1% QoQ mainly due to seasonality. 
1Q25 EMS sales will decline slightly YoY, and OPM is down 0.13ppts YoY. IC-ATM sales will decline mid-single-digits QoQ and GM is down slightly more than 1% QoQ.
Believes it will bring upside from new US BIS policy to ban non-listed OSAT vendors (especially China vendors) to produce US-related chip, but can’t quantify at this moment.


ASEH (3711.TT; ASX.US): A Seasonal Decline in 1Q25, But US BIS Policy Will Help ASEH Business.

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>China listed HK shares continue to lead the pack in Asia</li>
<li>India's rate cuts, tax cuts and election wins are not supporting the market</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
China listed HK shares continue to lead the pack in Asia
India's rate cuts, tax cuts and election wins are not supporting the market


Overview #15 – Who's Afraid of the USD?

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) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>TSMC: +24.7% Premium; Can Consider Shorting the Spread At Current Level</li>
<li>ASE: +2.6% Premium; Wait for Closer to Parity Before Going Long Again</li>
<li>ChipMOS: +1.8% Premium; Can Continue to Consider Shorting at Current Level</li>
</ul>


TSMC: +24.7% Premium; Can Consider Shorting the Spread At Current Level
ASE: +2.6% Premium; Wait for Closer to Parity Before Going Long Again
ChipMOS: +1.8% Premium; Can Continue to Consider Shorting at Current Level


Taiwan Dual-Listings Monitor: TSMC Spread Back to Extremes; ChipMOS Still High

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>Sumco to stop silicon wafer production at Miyazaki plant by 2026, impacting supply chain for semiconductor industry.</li><li>MediaTek experiences revenue spike in January due to tariff uncertainty and Chinese subsidies, indicating potential market volatility.</li><li>Pegatron maintains consistent performance in January amid transition period, highlighting company stability.</li></ul>

Sumco to stop silicon wafer production at Miyazaki plant by 2026, impacting supply chain for semiconductor industry.MediaTek experiences revenue spike in January due to tariff uncertainty and Chinese subsidies, indicating potential market volatility.Pegatron maintains consistent performance in January amid transition period, highlighting company stability.

Tech Supply Chain Tracker (12-Feb-2025): Sumco to cease Miyazaki plant's wafer production by 2026.

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>SMIC's 1Q25 guidance is for revenue to increase by 6% to 8% QoQ, and the gross margin to range from 19% to 21%.   </li>
<li>Client revenue contribution from China/Europe/US has changed from 80.8%/15.7%/3.5% in 4Q23 to 89.1%/8.9%/2% in 4Q24. These numbers indicate that SMIC is gradually becoming independent from Europe and the US. </li>
<li>SMIC's guidance for the year 2025 is that revenue growth is expected to be higher than the industry average in the same markets.</li>
</ul>


SMIC's 1Q25 guidance is for revenue to increase by 6% to 8% QoQ, and the gross margin to range from 19% to 21%.   
Client revenue contribution from China/Europe/US has changed from 80.8%/15.7%/3.5% in 4Q23 to 89.1%/8.9%/2% in 4Q24. These numbers indicate that SMIC is gradually becoming independent from Europe and the US. 
SMIC's guidance for the year 2025 is that revenue growth is expected to be higher than the industry average in the same markets.


SMIC (981.HK): Revenue Growth Decelerated in 4Q24, and Growth Momentum to Be Regained in 1Q25.

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)

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

ASEH (3711.TT; ASX.US): A Seasonal Decline in 1Q25, But US BIS Policy Will Help ASEH Business.

4Q24 saw a slight increase in IC ATM sales and a decrease in EMS sales due to seasonality. 1Q25 is expected declining in both EMS and IC ATM...

Patrick Liao

Overview #15 – Who's Afraid of the USD?

A review of recent events/data impacting our investment themes and outlook. We takea quick tour around China, India and Japan

Rikki Malik

Taiwan Dual-Listings Monitor: TSMC Spread Back to Extremes; ChipMOS Still High

We analyze the premium and discount levels of dual-listed Taiwan companies, suggesting potential spread trading levels based on historical trends.

Vincent Fernando, CFA

Tech Supply Chain Tracker (12-Feb-2025): Sumco to cease Miyazaki plant's wafer production by 2026.

Sumco to cease silicon wafer production in Miyazaki by 2026, MediaTek revenue up in January, Pegatron steady amid transition, Trump imposes steel...

Tech Supply Chain Tracker

SMIC (981.HK): Revenue Growth Decelerated in 4Q24, and Growth Momentum to Be Regained in 1Q25.

SMIC expects revenue growth in 1Q25, shifting focus to China and reducing reliance on Europe and the US, aiming for above-average growth in 2025.

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ASEH (3711.TT; ASX.US): A Seasonal Decline in 1Q25, But US BIS Policy Will Help ASEH Business.

​4Q24 saw a slight increase in IC ATM sales and a decrease in EMS sales due to seasonality. 1Q25 is expected declining in both EMS and IC ATM...

Patrick Liao

Overview #15 – Who's Afraid of the USD?

A review of recent events/data impacting our investment themes and outlook. We takea quick tour around China, India and Japan

Rikki Malik

Taiwan Dual-Listings Monitor: TSMC Spread Back to Extremes; ChipMOS Still High

We analyze the premium and discount levels of dual-listed Taiwan companies, suggesting potential spread trading levels based on historical trends.

Vincent Fernando, CFA

Tech Supply Chain Tracker (12-Feb-2025): Sumco to cease Miyazaki plant's wafer production by 2026.

Sumco to cease silicon wafer production in Miyazaki by 2026, MediaTek revenue up in January, Pegatron steady amid transition, Trump imposes steel...

Tech Supply Chain Tracker

SMIC (981.HK): Revenue Growth Decelerated in 4Q24, and Growth Momentum to Be Regained in 1Q25.

​SMIC expects revenue growth in 1Q25, shifting focus to China and reducing reliance on Europe and the US, aiming for above-average growth in 2025.

Patrick Liao

4Q24 saw a slight increase in IC ATM sales and a decrease in EMS sales due to seasonality. 1Q25 is expected declining in both EMS and IC ATM...

SMIC expects revenue growth in 1Q25, shifting focus to China and reducing reliance on Europe and the US, aiming for above-average growth in 2025.