Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Equity Bottom-Up

Summary: 
<ul>
<li>
TXN - Rebound in almost all end markets, even Automotive in China. Weakness in ROW, but I think it’s trough.</li>
<li>
LRCX - 25 is a growth year, taking share from Litho.</li>
<li>
MXL - Clear growth off the bottom as telecom rebounds.</li>
<li>
SK Hynix - Memory cycle ain’t over, HBM is strong.</li>
<li>
TER - Apple designed it’s own modem next year.</li>
<li>
BESI - HBM4 is looking continuously questionable if it’s going to be Hybrid Bonding.</li>
</ul>

Summary: 


TXN - Rebound in almost all end markets, even Automotive in China. Weakness in ROW, but I think it’s trough.

LRCX - 25 is a growth year, taking share from Litho.

MXL - Clear growth off the bottom as telecom rebounds.

SK Hynix - Memory cycle ain’t over, HBM is strong.

TER - Apple designed it’s own modem next year.

BESI - HBM4 is looking continuously questionable if it’s going to be Hybrid Bonding.


Earnings: TXN, LRCX, MXL, SK Hynix, TER, BESI

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>The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline.</li><li>This contrasted with their optimistic revenue predictions for Q3, forecasting in the range of $3.94 billion to $4.26 billion.</li><li>This could have been due to the decline in Analog revenue by 11% YoY, Embedded Processing by 31%, and its Other segment by 22% from YoY quarter.</li></ul>

The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline.This contrasted with their optimistic revenue predictions for Q3, forecasting in the range of $3.94 billion to $4.26 billion.This could have been due to the decline in Analog revenue by 11% YoY, Embedded Processing by 31%, and its Other segment by 22% from YoY quarter.

Texas Instruments: Is Its China Revival Here To Stay? - Major Drivers

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.</li>
<li>Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.</li>
<li>2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.</li>
</ul>


Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.
Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.
2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.


Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

Thematic (Sector/Industry)

<ul>
<li>Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   </li>
<li>Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   </li>
<li>Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.</li>
</ul>


Auto &amp; Industrial Semi long boom / bust cycle started during Covid (peak demand) and is ending soon. Revenues declined by -20%. Operating Profits are depressed, down -50% from peak.   
Industry structure, high fragmentation, low transparency led to a protracted and steep bottom. But inventories remain high. The recovery will take time, probably no YoY revenue growth till 2026.   
Two big restructuring are underway, the sector is rationalizing. Lofty expectations of “structural growth” (EV, ADAS, green energy growth) hit the wall of a disappointing reality amplified by trade wars.


Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

<ul>
<li>August's WSTS semiconductor revenues registered a record high of more than $53 billion</li>
<li>Nobody seemed to notice, including the organization making the announcement</li>
<li>There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales</li>
</ul>


August's WSTS semiconductor revenues registered a record high of more than $53 billion
Nobody seemed to notice, including the organization making the announcement
There's valid concern that the market is on the verge of a collapse, and this may be overshadowing record sales


Semis Just Broke a Record.  Why Did Nobody Notice?

United States

Texas Instruments Incorporated operates as a semiconductor design and manufacturing company. The Company develops analog ICs and embedded processors. Texas Instruments has manufacturing or sales operations worldwide.

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Texas Instruments (TXN US)

Earnings: TXN, LRCX, MXL, SK Hynix, TER, BESI

Summary: TXN - Rebound in almost all end markets, even Automotive in China. Weakness in ROW, but I think it’s trough. LRCX - 25 is a growth...

Fabricated Knowledge

Texas Instruments: Is Its China Revival Here To Stay? - Major Drivers

The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline. This contrasted with their...

Baptista Research

Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Nicolas Baratte

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Semis Just Broke a Record. Why Did Nobody Notice?

August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...

Jim Handy

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Earnings: TXN, LRCX, MXL, SK Hynix, TER, BESI

Summary: TXN - Rebound in almost all end markets, even Automotive in China. Weakness in ROW, but I think it’s trough. LRCX - 25 is a growth...

Fabricated Knowledge

Texas Instruments: Is Its China Revival Here To Stay? - Major Drivers

The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline. This contrasted with their...

Baptista Research

Automotive & Industrial Semiconductors Part 2: Is It the Bottom, Finally? Time to Buy?

​1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Nicolas Baratte

Auto & Industrial Semi Part1: Background of the Ongoing Crash, Revising Down Lofty Expectations

​Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

Nicolas Baratte

Semis Just Broke a Record. Why Did Nobody Notice?

​August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...

Jim Handy

1Q25 revenues hitting bottom, firms see QoQ growth in 2Q. Auto and Industrial show signs of improvement. Profit recovery may lag (inventory, price...

Auto & Industrial Semi close to end of long boom/bust cycle, with revenues down -20%. Recovery expected to be slow with no YoY growth till 2026....

August's semiconductor revenues hit a record high of over $53 billion, but concerns about a potential market collapse are overshadowing the...