Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taiwan-semiconductor-sp-adr" target="_blank" data-smartkarma-citation="entities:8587:1" rel="noopener">Taiwan Semiconductor (TSMC) - ADR (TSM US)</a> invests over 3.7 billion in <a href="https://www.smartkarma.com/entities/vanguard-international-semi" target="_blank" data-smartkarma-citation="entities:16011:1" rel="noopener">Vanguard Intl Semiconductor (5347 TT)</a> to increase its holdings to 27%.</li>
<li>Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard's investment in its first 12-inch factory in Singapore yesterday.</li>
<li>Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.</li>
</ul>



Taiwan Semiconductor (TSMC) - ADR (TSM US) invests over 3.7 billion in Vanguard Intl Semiconductor (5347 TT) to increase its holdings to 27%.
Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard's investment in its first 12-inch factory in Singapore yesterday.
Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.


Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

<ul>
<li>The 4Q24 is slightly on the downside, and we are currently adopting a somewhat conservative approach.  </li>
<li>Visibility extends for no more than 3 months, and any increase in demand is primarily driven by urgent orders.</li>
<li>As for the upcoming 12" Fab, which is in collaboration with <a href="https://www.smartkarma.com/entities/nxp-semiconductors-nv" target="_blank" data-smartkarma-citation="entities:9801:1" rel="noopener">Nxp Semiconductors Nv (NXPI US)</a>, it has commenced local recruitment efforts in Singapore.</li>
</ul>


The 4Q24 is slightly on the downside, and we are currently adopting a somewhat conservative approach.  
Visibility extends for no more than 3 months, and any increase in demand is primarily driven by urgent orders.
As for the upcoming 12" Fab, which is in collaboration with Nxp Semiconductors Nv (NXPI US), it has commenced local recruitment efforts in Singapore.


Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

<ul>
<li>We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> and <a href="https://www.smartkarma.com/entities/monolithic-power-systems-inc" target="_blank" data-smartkarma-citation="entities:2088:1" rel="noopener">Monolithic Power Systems, Inc (MPWR US)</a> are gradually increasing demand volume in 2Q24 and 3Q24.  </li>
<li>Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  </li>
</ul>


We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  

Qualcomm Inc (QCOM US) and Monolithic Power Systems, Inc (MPWR US) are gradually increasing demand volume in 2Q24 and 3Q24.  
Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  


Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

<ul>
<li>3Q24 guidance: Shipment: up 9-11% due to higher customer demand. ASP: down 0-2% QoQ. GM: 28-30%, up 3ppts QoQ.</li>
<li>Pricing hit bottom in 2Q24. Anticipates UTR in 2025 returning to 70-80%.</li>
<li>Effective tax rate for 2H24 is expected to be 20%.</li>
</ul>


3Q24 guidance: Shipment: up 9-11% due to higher customer demand. ASP: down 0-2% QoQ. GM: 28-30%, up 3ppts QoQ.
Pricing hit bottom in 2Q24. Anticipates UTR in 2025 returning to 70-80%.
Effective tax rate for 2H24 is expected to be 20%.


Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range. </li>
<li>No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.</li>
<li>In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek. </li>
</ul>


IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range. 
No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.
In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek. 


3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

Taiwan

Vanguard International Semiconductor Corporation offers integrated circuit foundry services.  The Company manufactures 0.18um logic, mixed-signal, analog, high voltage, low power, CMOS RF, flash, embedded memory, and bipolar CMOS DMOS semiconductors.

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Vanguard Intl Semiconductor (5347 TT)

Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

TSMC boosts investment in Vanguard to 27%, Taiwanese authorities approve Vanguard's investment in Singapore factory, 4Q24 outlook shows potential...

Patrick Liao

Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

Due to slightly downside 4Q24, with visibility limited to 3 months and demand driven by urgent orders. Recruitment for upcoming 12" Fab in...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...

Patrick Liao

3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

3Q24 PC shipments are flat YoY. The great recovery or AI replacement cycle aren’t happening (for now). IDC reported 3Q24 PC shipments declining -2%...

Nicolas Baratte

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

TSMC boosts investment in Vanguard to 27%, Taiwanese authorities approve Vanguard's investment in Singapore factory, 4Q24 outlook shows potential...

Patrick Liao

Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

Due to slightly downside 4Q24, with visibility limited to 3 months and demand driven by urgent orders. Recruitment for upcoming 12" Fab in...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

​Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

​3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...

Patrick Liao

3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

3Q24 PC shipments are flat YoY. The great recovery or AI replacement cycle aren’t happening (for now). IDC reported 3Q24 PC shipments declining -2%...

Nicolas Baratte

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...