Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Monthly sales are volatile and must be looked at with a modicum of circumspection. Yet, TSMC April revenue growth accelerated to +48% YoY and represent 39% of 2Q revenue guidance. </li>
<li>This opens the possibility of TSMC delivering a decent beat in 2Q. UMC April revenue are inline, Vanguard is below. </li>
<li>Remarkably, TSMC stock is not expensive at 15.4x 2025 EPS, 13x 2026EPS. It is actually the 2nd cheapest stock after UMC.</li>
</ul>


Monthly sales are volatile and must be looked at with a modicum of circumspection. Yet, TSMC April revenue growth accelerated to +48% YoY and represent 39% of 2Q revenue guidance. 
This opens the possibility of TSMC delivering a decent beat in 2Q. UMC April revenue are inline, Vanguard is below. 
Remarkably, TSMC stock is not expensive at 15.4x 2025 EPS, 13x 2026EPS. It is actually the 2nd cheapest stock after UMC.


Taiwan Foundry Revenue: Very Strong TSMC April Revenues

Taiwan Tech Focused Senior Analyst

Patrick Liao

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>2024 Cash Dividend is NT$28, with payout ratio slightly increased to 83.76%. 2Q25 Guidance Revenue: NT$26.5–27.7bn / US$828–866mn (vs. ~US$830mn in 1Q24), Gross Margin is 37–40% and OPM is 18.5–21.5%.</li>
<li>100% of sales and cost are denominated in USD. A 1% appreciation of the  TWD implies a 0.2% decrease in net income.</li>
<li>2H25 Outlook: Visibility remains low, and tariffs continue to be the key uncertainty.</li>
</ul>


2024 Cash Dividend is NT$28, with payout ratio slightly increased to 83.76%. 2Q25 Guidance Revenue: NT$26.5–27.7bn / US$828–866mn (vs. ~US$830mn in 1Q24), Gross Margin is 37–40% and OPM is 18.5–21.5%.
100% of sales and cost are denominated in USD. A 1% appreciation of the  TWD implies a 0.2% decrease in net income.
2H25 Outlook: Visibility remains low, and tariffs continue to be the key uncertainty.


Novatek (3034.TT): US Tariffs Remain the Key Uncertainty.

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) (TSM US)

<ul>
<li>
TSMC’s Next Generation 2nm Node is Experiencing Unprecedented Customer Demand</li>
<li>
Showdown Heats Up Between Qualcomm &amp; Mediatek's Next Generation of Mobile Phone SoCs -- And All Roads Lead to TSMC's Process Technology</li>
<li>
Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG</li>
</ul>



TSMC’s Next Generation 2nm Node is Experiencing Unprecedented Customer Demand

Showdown Heats Up Between Qualcomm &amp; Mediatek's Next Generation of Mobile Phone SoCs -- And All Roads Lead to TSMC's Process Technology

Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG


Taiwan Tech Weekly: TSMC's Next Gen Node Unprecedented Demand; QCOM/Mediatek Chips' Peformance Leaks

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>2Q25 outlook: Wafer shipments are expected to grow +3~5% QoQ, ASP is expected to increase +0~2% QoQ and Gross margin is projected at 27~29%.</li>
<li>2Q25 by platform: PMIC to see significant growth; discrete to grow in low single digits; DDIC to remain flat.</li>
<li>The 2024 annual dividend policy is maintained at NT$4.5 per share.</li>
</ul>


2Q25 outlook: Wafer shipments are expected to grow +3~5% QoQ, ASP is expected to increase +0~2% QoQ and Gross margin is projected at 27~29%.
2Q25 by platform: PMIC to see significant growth; discrete to grow in low single digits; DDIC to remain flat.
The 2024 annual dividend policy is maintained at NT$4.5 per share.


Vanguard (5347.TT): 2Q25 Outlooks Largely in Line; Exchange Rates and Tariffs Remain Uncertain…

<ul>
<li>We assume that <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> will see an upside in its 2Q25 outlook by a few percentage points.</li>
<li>The DDIC (Display Driver IC) segment appears relatively flat, while PMIC (Power Management IC) may experience slight growth.</li>
<li>
<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> and other Taiwanese semiconductor Fabs are not subject to the 125% tariff imposed by Beijing on U.S. products. </li>
</ul>


We assume that Vanguard Intl Semiconductor (5347 TT) will see an upside in its 2Q25 outlook by a few percentage points.
The DDIC (Display Driver IC) segment appears relatively flat, while PMIC (Power Management IC) may experience slight growth.

Vanguard Intl Semiconductor (5347 TT) and other Taiwanese semiconductor Fabs are not subject to the 125% tariff imposed by Beijing on U.S. products. 


Vanguard (5347.TT): 2Q25 Outlook Slightly Upbeat; US Tariffs Remain a Negative Factor.

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)

Taiwan Foundry Revenue: Very Strong TSMC April Revenues

TSMC's strong April revenue growth could lead to a beat in 2Q, despite volatile monthly sales. Stock not expensive compared to peers.

Nicolas Baratte

Novatek (3034.TT): US Tariffs Remain the Key Uncertainty.

2024 payout ratio 83.76%. 2Q25 Revenue guidance NT$26.5–27.7bn / US$828–866mn, Gross Margin 37–40%, OPM 18.5–21.5%. Sales and cost in USD, 1% TWD...

Patrick Liao

Taiwan Tech Weekly: TSMC's Next Gen Node Unprecedented Demand; QCOM/Mediatek Chips' Peformance Leaks

TSMC's 2nm node sees high demand, Qualcomm and Mediatek compete using TSMC's technology, Amazon and Google maintain or increase hyperscale capex.

Vincent Fernando, CFA

Vanguard (5347.TT): 2Q25 Outlooks Largely in Line; Exchange Rates and Tariffs Remain Uncertain…

2Q25 outlook: Wafer shipments to grow, ASP to increase, gross margin projected; PMIC to see significant growth, dividend policy maintained at...

Patrick Liao

Vanguard (5347.TT): 2Q25 Outlook Slightly Upbeat; US Tariffs Remain a Negative Factor.

Vanguard Intl Semiconductor expected to see slight upside in 2Q25 outlook, with PMIC segment showing potential growth and no impact from Beijing's...

Patrick Liao

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Taiwan Foundry Revenue: Very Strong TSMC April Revenues

​TSMC's strong April revenue growth could lead to a beat in 2Q, despite volatile monthly sales. Stock not expensive compared to peers.

Nicolas Baratte

Novatek (3034.TT): US Tariffs Remain the Key Uncertainty.

​2024 payout ratio 83.76%. 2Q25 Revenue guidance NT$26.5–27.7bn / US$828–866mn, Gross Margin 37–40%, OPM 18.5–21.5%. Sales and cost in USD, 1% TWD...

Patrick Liao

Taiwan Tech Weekly: TSMC's Next Gen Node Unprecedented Demand; QCOM/Mediatek Chips' Peformance Leaks

​TSMC's 2nm node sees high demand, Qualcomm and Mediatek compete using TSMC's technology, Amazon and Google maintain or increase hyperscale capex.

Vincent Fernando, CFA

Vanguard (5347.TT): 2Q25 Outlooks Largely in Line; Exchange Rates and Tariffs Remain Uncertain…

​2Q25 outlook: Wafer shipments to grow, ASP to increase, gross margin projected; PMIC to see significant growth, dividend policy maintained at...

Patrick Liao

Vanguard (5347.TT): 2Q25 Outlook Slightly Upbeat; US Tariffs Remain a Negative Factor.

​Vanguard Intl Semiconductor expected to see slight upside in 2Q25 outlook, with PMIC segment showing potential growth and no impact from Beijing's...

Patrick Liao

TSMC's strong April revenue growth could lead to a beat in 2Q, despite volatile monthly sales. Stock not expensive compared to peers.

2024 payout ratio 83.76%. 2Q25 Revenue guidance NT$26.5–27.7bn / US$828–866mn, Gross Margin 37–40%, OPM 18.5–21.5%. Sales and cost in USD, 1% TWD...

TSMC's 2nm node sees high demand, Qualcomm and Mediatek compete using TSMC's technology, Amazon and Google maintain or increase hyperscale capex.

2Q25 outlook: Wafer shipments to grow, ASP to increase, gross margin projected; PMIC to see significant growth, dividend policy maintained at...

Vanguard Intl Semiconductor expected to see slight upside in 2Q25 outlook, with PMIC segment showing potential growth and no impact from Beijing's...