Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Both TSMC and UMC saw about 20% cut in automotive industry wafer sales in 3Q23, which was 20% worse than customers' guidance.</li>
<li>Reasons for discrepancies: 1. IDMs cut foundry orders but keep in house utilization higher; 2. Worse than expected US auto factories strike; 3. Rate hike results in worse car sales.</li>
<li>We suggest clients to be cautious on the investment of automotive supply chain for the next 3-6 months</li>
</ul>


Both TSMC and UMC saw about 20% cut in automotive industry wafer sales in 3Q23, which was 20% worse than customers' guidance.
Reasons for discrepancies: 1. IDMs cut foundry orders but keep in house utilization higher; 2. Worse than expected US auto factories strike; 3. Rate hike results in worse car sales.
We suggest clients to be cautious on the investment of automotive supply chain for the next 3-6 months


Top Foundries See Cut in Automotive Industry Wafer Sales, Implications

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>TSMC (2330) Sets New Record in 1Q26 with EPS of NT$22.08, Upgrading Full-Year USD Revenue Growth to Over 30%.</li>
<li>From a product mix perspective, advanced processes continue to drive this quarter’s growth and profitability.</li>
<li>Chairman stated that with sustained strong demand for advanced processes and robust AI momentum, even amid macroeconomic and geopolitical uncertainties.</li>
</ul>


TSMC (2330) Sets New Record in 1Q26 with EPS of NT$22.08, Upgrading Full-Year USD Revenue Growth to Over 30%.
From a product mix perspective, advanced processes continue to drive this quarter’s growth and profitability.
Chairman stated that with sustained strong demand for advanced processes and robust AI momentum, even amid macroeconomic and geopolitical uncertainties.


TSMC (2330.TT; TSM.US): 1Q26 with EPS of NT$22.1, with Full-Year USD Revenue Growth Over 30%.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Nikkei reported mid-day that <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> made a ¥1.3trln takeover proposal to <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a> in February. That's big news. Last year Denso bought ~5%.</li>
<li>The goal would be to be dominant in power chips and to serve Toyota Group. There is a big Toshiba angle here too. Rohm bought into Toshiba, also has JVs.</li>
<li>Toshiba owns a big stake in Kioxia which trickles down to Rohm. Much will be made of the look-through valuation. It's complicated.</li>
</ul>


The Nikkei reported mid-day that Denso Corp (6902 JP) made a ¥1.3trln takeover proposal to ROHM Co Ltd (6963 JP) in February. That's big news. Last year Denso bought ~5%.
The goal would be to be dominant in power chips and to serve Toyota Group. There is a big Toshiba angle here too. Rohm bought into Toshiba, also has JVs.
Toshiba owns a big stake in Kioxia which trickles down to Rohm. Much will be made of the look-through valuation. It's complicated.


[Japan M&A] Denso (6902) Reportedly Made a ¥1.3trln Takeover Proposal to Rohm (6963). Light & Iffy.

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

<ul>
<li>A major Intel balance sheet boost, backed by SoftBank, the U.S. government, and leading institutions, would enhance the company’s capacity to make bold bets on regaining global chip manufacturing leadership.</li>
<li>UMC's market valuation is less than the capex for just one advanced fab. Intel would likely make a gain on its investment since it would cause UMC shares to rally.</li>
<li>For less than the cost of a single advanced fab, a large company could acquire UMC and gain chipmaking expertise approaching TSMC’s level; boosting returns across an entire fab network.</li>
</ul>


A major Intel balance sheet boost, backed by SoftBank, the U.S. government, and leading institutions, would enhance the company’s capacity to make bold bets on regaining global chip manufacturing leadership.
UMC's market valuation is less than the capex for just one advanced fab. Intel would likely make a gain on its investment since it would cause UMC shares to rally.
For less than the cost of a single advanced fab, a large company could acquire UMC and gain chipmaking expertise approaching TSMC’s level; boosting returns across an entire fab network.


A Defining Bet: Intel’s New Capital and the Case for Buying a Stake in Taiwan's UMC

<ul>
<li>TSMC: +26.3% Premium; Near Record High After U.S. 4th of July Holiday</li>
<li>UMC: +4.7% Premium; One of the Highest Levels in History -- Short</li>
<li>ASE: +4.6% Premium; Wait for More Extreme Level Before Going Long or Short</li>
</ul>


TSMC: +26.3% Premium; Near Record High After U.S. 4th of July Holiday
UMC: +4.7% Premium; One of the Highest Levels in History -- Short
ASE: +4.6% Premium; Wait for More Extreme Level Before Going Long or Short


Taiwan Dual-Listings Monitor: Spreads Near Record Highs After U.S. Market Holiday

Taiwan

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

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United Microelectron Sp Adr (UMC US)

Top Foundries See Cut in Automotive Industry Wafer Sales, Implications

Top foundries see worse than expected automotive wafer sales, implying more automotive supply chain members are going to miss earnings expectation...

Andrew Lu

TSMC (2330.TT; TSM.US): 1Q26 with EPS of NT$22.1, with Full-Year USD Revenue Growth Over 30%.

TSMC achieves record EPS in 1Q26, driven by strong demand for advanced processes and AI, upgrading full-year revenue growth to over 30%.

Patrick Liao

[Japan M&A] Denso (6902) Reportedly Made a ¥1.3trln Takeover Proposal to Rohm (6963). Light & Iffy.

Denso has proposed a (lowball) takeover to Rohm, currently in an investment/restructuring phase, highlighting Rohm's value. The register is wide...

Travis Lundy

A Defining Bet: Intel’s New Capital and the Case for Buying a Stake in Taiwan's UMC

Intel's balance sheet improvement is a major opportunity -- Intel should invest in UMC to create a win-win combination that can rival TSMC...

Vincent Fernando, CFA

Taiwan Dual-Listings Monitor: Spreads Near Record Highs After U.S. Market Holiday

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

Vincent Fernando, CFA

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Top Foundries See Cut in Automotive Industry Wafer Sales, Implications

Top foundries see worse than expected automotive wafer sales, implying more automotive supply chain members are going to miss earnings expectation...

Andrew Lu

TSMC (2330.TT; TSM.US): 1Q26 with EPS of NT$22.1, with Full-Year USD Revenue Growth Over 30%.

​TSMC achieves record EPS in 1Q26, driven by strong demand for advanced processes and AI, upgrading full-year revenue growth to over 30%.

Patrick Liao

[Japan M&A] Denso (6902) Reportedly Made a ¥1.3trln Takeover Proposal to Rohm (6963). Light & Iffy.

Denso has proposed a (lowball) takeover to Rohm, currently in an investment/restructuring phase, highlighting Rohm's value. The register is wide...

Travis Lundy

A Defining Bet: Intel’s New Capital and the Case for Buying a Stake in Taiwan's UMC

​Intel's balance sheet improvement is a major opportunity -- Intel should invest in UMC to create a win-win combination that can rival TSMC...

Vincent Fernando, CFA

Taiwan Dual-Listings Monitor: Spreads Near Record Highs After U.S. Market Holiday

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

Vincent Fernando, CFA

TSMC achieves record EPS in 1Q26, driven by strong demand for advanced processes and AI, upgrading full-year revenue growth to over 30%.

Intel's balance sheet improvement is a major opportunity -- Intel should invest in UMC to create a win-win combination that can rival TSMC...