Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

United Microelectronics Corp / Equity Bottom-Up

<ul>
<li>The outlook for 4Q24 appears somewhat bearish at the moment, though it has not been fully defined before the end of October.</li>
<li>Taiwanese companies such as MediaTek Inc (2454 TT), Novatek Microelectronics Corp (3034 TT) and Realtek Semiconductor (2379 TT) continue to be the main drivers of demand for UMC.</li>
<li>On a positive note, there are warnings against overly relying on chips from Chinese manufacturers due to US sanctions.</li>
</ul>


The outlook for 4Q24 appears somewhat bearish at the moment, though it has not been fully defined before the end of October.
Taiwanese companies such as MediaTek Inc (2454 TT), Novatek Microelectronics Corp (3034 TT) and Realtek Semiconductor (2379 TT) continue to be the main drivers of demand for UMC.
On a positive note, there are warnings against overly relying on chips from Chinese manufacturers due to US sanctions.


UMC (2303.TT; UMC US): The Outlook for 4Q24 Is Somewhat Bearish.

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

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<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

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>UMC's latest results indicate a mild recovery for consumer, communications, and computing industries. UMC's capacity utilization to continue improving but industry inventory correction could last until end-2024E.</li>
<li>UMC maintained 2024E capex guidance however it's increasingly clear UMC can't keep up the capex arms race alone. Hence we see UMC &amp; Intel becoming closer and closer partners.</li>
<li>We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.</li>
</ul>


UMC's latest results indicate a mild recovery for consumer, communications, and computing industries. UMC's capacity utilization to continue improving but industry inventory correction could last until end-2024E.
UMC maintained 2024E capex guidance however it's increasingly clear UMC can't keep up the capex arms race alone. Hence we see UMC &amp; Intel becoming closer and closer partners.
We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.


UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.</li>
<li>
<a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.
</li>
<li>
<a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.
</li>
</ul>


Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.

AAC Technologies Holdings (2018 HK) announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.


Hua Hong Semiconductor (1347 HK) is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.



BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

<ul>
<li>UMC Secures Key Qualcomm Advanced Packaging Order; Breakthrough in High-Growth Chip Supply Chain Segment</li>
<li>Why TSMC Remains Critical for QCOM Manufacturing, Yet UMC Provides a Strong Strategic Counterbalance</li>
<li>UMC Must Prove Itself, but QCOM Win Sparks Optimism for Sentiment and Outlook Recovery -- Maintain TSMC as Structural Long &amp; Rate UMC as Outperform</li>
</ul>


UMC Secures Key Qualcomm Advanced Packaging Order; Breakthrough in High-Growth Chip Supply Chain Segment
Why TSMC Remains Critical for QCOM Manufacturing, Yet UMC Provides a Strong Strategic Counterbalance
UMC Must Prove Itself, but QCOM Win Sparks Optimism for Sentiment and Outlook Recovery -- Maintain TSMC as Structural Long &amp; Rate UMC as Outperform


United Microelectronics: Key QCOM Advanced Packaging Win Signals Client Shift Away from TSMC

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 Microelectronics Corp (2303 TT)

UMC (2303.TT; UMC US): The Outlook for 4Q24 Is Somewhat Bearish.

4Q24 outlook is bearish, MediaTek, Novatek and Realtek continue to be the main drivers of demand for UMC, caution against Chinese chips due to US...

Patrick Liao

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

UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

UMC sees mild industry end demand improvement, but inventory correction may last until end-2024E. UMC and Intel's partnership will deepen over...

Vincent Fernando, CFA

BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Mainland investors are buying record amounts in HK during secular bull mkt. AAC Tech reported positive earnings surprise and Hua Hong is rapidly...

David Mudd

United Microelectronics: Key QCOM Advanced Packaging Win Signals Client Shift Away from TSMC

UMC secures key Qualcomm order, providing strategic counterbalance to TSMC in chip supply chain segment. Optimism likely to improve for UMC's...

Vincent Fernando, CFA

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52-week Range

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UMC (2303.TT; UMC US): The Outlook for 4Q24 Is Somewhat Bearish.

​4Q24 outlook is bearish, MediaTek, Novatek and Realtek continue to be the main drivers of demand for UMC, caution against Chinese chips due to US...

Patrick Liao

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

UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important

​UMC sees mild industry end demand improvement, but inventory correction may last until end-2024E. UMC and Intel's partnership will deepen over...

Vincent Fernando, CFA

BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Mainland investors are buying record amounts in HK during secular bull mkt. AAC Tech reported positive earnings surprise and Hua Hong is rapidly...

David Mudd

United Microelectronics: Key QCOM Advanced Packaging Win Signals Client Shift Away from TSMC

​UMC secures key Qualcomm order, providing strategic counterbalance to TSMC in chip supply chain segment. Optimism likely to improve for UMC's...

Vincent Fernando, CFA

4Q24 outlook is bearish, MediaTek, Novatek and Realtek continue to be the main drivers of demand for UMC, caution against Chinese chips due to US...

UMC sees mild industry end demand improvement, but inventory correction may last until end-2024E. UMC and Intel's partnership will deepen over...

UMC secures key Qualcomm order, providing strategic counterbalance to TSMC in chip supply chain segment. Optimism likely to improve for UMC's...