Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>Novatek’s monthly revenue is increasing above 20% YoY from July 2020.  However, the growth trend seems slowing down from 1Q22.</li>
<li>The price for DDIC (Display Driver IC) is the lowest among in the foundry companies’ products although its demand quantity can be large, which gives its actual price bargaining power.</li>
<li>Somehow, the end demand still needs a Display with related ICs for the application. So, there must be some certain suppliers to complete the supply chain.</li>
</ul>


Novatek’s monthly revenue is increasing above 20% YoY from July 2020.  However, the growth trend seems slowing down from 1Q22.
The price for DDIC (Display Driver IC) is the lowest among in the foundry companies’ products although its demand quantity can be large, which gives its actual price bargaining power.
Somehow, the end demand still needs a Display with related ICs for the application. So, there must be some certain suppliers to complete the supply chain.


Novatek (3034.TT): The Growth Trend Seems Slowing Down Since 1Q22.

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>It’s NTD$4.976~5.176bn to go in March to reach the 1Q22 guidance of NTD$13.2~13.6bn.</li>
<li>Despite Consumer and Smartphone demands could be weak in 1Q because of seasonality, we still see the demands can be strong in PMIC, Auto, 5G and etc.</li>
<li>For the continuous 8” demand, the clients have high willingness to sign up an LTA (long term agreement), which explains the strong demand situation now.  </li>
</ul>


It’s NTD$4.976~5.176bn to go in March to reach the 1Q22 guidance of NTD$13.2~13.6bn.
Despite Consumer and Smartphone demands could be weak in 1Q because of seasonality, we still see the demands can be strong in PMIC, Auto, 5G and etc.
For the continuous 8” demand, the clients have high willingness to sign up an LTA (long term agreement), which explains the strong demand situation now.  


Vanguard (5347.TT): We Think Vanguard Can Easily Reach 1Q22 Guidance.

<ul>
<li>In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively.</li>
<li>Vanguard has about 30% capacity utilized by TSMC’s foundry products. In technology deliverables, Vanguard also competes with TSMC for manufacturing excellence, which creates an internal competition.</li>
<li>Vanguard has dealt with their clients to share the expansion cost. Certainly, there is almost no such trust-worthy partnership, except Vanguard who has TSMC to back up.</li>
</ul>


In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively.
Vanguard has about 30% capacity utilized by TSMC’s foundry products. In technology deliverables, Vanguard also competes with TSMC for manufacturing excellence, which creates an internal competition.
Vanguard has dealt with their clients to share the expansion cost. Certainly, there is almost no such trust-worthy partnership, except Vanguard who has TSMC to back up.


Vanguard (5347.TT): 8" Capacity Tightness with TSMC Standing Behind as Actionable

External broker reports(aggregated public sources), Capital Securities Corp

Capital Securities

External broker reports(aggregated public sources)

Capital Securities Corp

Capital Securities provides clients with investment services covering diversified financial products. We have outstanding business performance amid intense competition in the domestic securities market. 

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<p>Double-digit revenue/earnings growth in FY21; recommend BUY . Vanguard’s 3Q21 revenue/GM met the company’s upper-end guidance. Given capacity expansion by 5~10% and full order backlog, we forecast Vanguard’s revenue/earnings to increase by double digits in FY22. Vanguard’s stock price hit our prior TP. As the catalysts have been partially priced in, we recommend TRADING BUY with TP of NTD175 (20x FY22 PER).</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Double-digit revenue/earnings growth in FY21; recommend BUY . Vanguard’s 3Q21 revenue/GM met the company’s upper-end guidance. Given capacity expansion by 5~10% and full order backlog, we forecast Vanguard’s revenue/earnings to increase by double digits in FY22. Vanguard’s stock price hit our prior TP. As the catalysts have been partially priced in, we recommend TRADING BUY with TP of NTD175 (20x FY22 PER).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<p>Double-digit revenue/earnings growth in FY21; recommend BUY. Vanguard gives a higher-than-expected 3Q21 revenue/GM guidance. Vanguard’s 3Q21 revenue/earnings YoY growth is expected to accelerate. FY21 revenue/earnings are forecasted to increase by double digits.. Given attractive valuation, we recommend BUY with TP of NTD145 (20x FY21 PER).</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Double-digit revenue/earnings growth in FY21; recommend BUY. Vanguard gives a higher-than-expected 3Q21 revenue/GM guidance. Vanguard’s 3Q21 revenue/earnings YoY growth is expected to accelerate. FY21 revenue/earnings are forecasted to increase by double digits.. Given attractive valuation, we recommend BUY with TP of NTD145 (20x FY21 PER).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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)

Novatek (3034.TT): The Growth Trend Seems Slowing Down Since 1Q22.

Novatek’s monthly revenue is increasing above 20% YoY from July 2020. The growth still keeps stacking up for a higher record in 4Q21. However, the...

Patrick Liao

Vanguard (5347.TT): We Think Vanguard Can Easily Reach 1Q22 Guidance.

We think Vanguard can easily reach 1Q22 guidance. It’s NTD$4.976~5.176bn to go in March to reach the 1Q22 guidance of NTD$13.2~13.6bn. We still see...

Patrick Liao

Vanguard (5347.TT): 8" Capacity Tightness with TSMC Standing Behind as Actionable

In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively. Vanguard dealt with clients to...

Patrick Liao

Vanguard (5347 TT, BUY, NTD158)

Double-digit revenue/earnings growth in FY21; recommend BUY . Vanguard’s 3Q21 revenue/GM met the company’s upper-end guidance. Given capacity...

Capital Securities

Vanguard (5347 TT, BUY, NTD121.5)

Double-digit revenue/earnings growth in FY21; recommend BUY. Vanguard gives a higher-than-expected 3Q21 revenue/GM guidance. Vanguard’s 3Q21...

Capital Securities

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