Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<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.

<ul>
<li>1Q25 Shipment estimates are up 8-10%. The ASP is expected to decrease by 4-6% QoQ and the gross margin. GM is projected to be 29-31%, showing a 1.3% increase QoQ. </li>
<li>The worldwide inventory level is currently healthy. Automotive inventory levels are improving, and Vanguard anticipates moderate growth in the semiconductor industry for 2025.</li>
<li>VSMC's construction will proceed according to the current plan. The project is currently slightly ahead of schedule. Sampling is planned for 2026, with mass production expected to begin in 2027.</li>
</ul>


1Q25 Shipment estimates are up 8-10%. The ASP is expected to decrease by 4-6% QoQ and the gross margin. GM is projected to be 29-31%, showing a 1.3% increase QoQ. 
The worldwide inventory level is currently healthy. Automotive inventory levels are improving, and Vanguard anticipates moderate growth in the semiconductor industry for 2025.
VSMC's construction will proceed according to the current plan. The project is currently slightly ahead of schedule. Sampling is planned for 2026, with mass production expected to begin in 2027.


Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

<ul>
<li>Usually, the 1st quarter of each year should show a decline for foundry companies, but <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>'s 1Q25 results could be relatively flat quarter-over-quarter.  </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>'s demand for Display Driver IC (DDIC) is on the rise, surpassing the growth seen in Power Management IC (PMIC).</li>
<li>Despite the potential increase in shipments in 1Q25, the rise in lower-margin products, such as 8" DDICs for large panels, is notable.</li>
</ul>


Usually, the 1st quarter of each year should show a decline for foundry companies, but Vanguard Intl Semiconductor (5347 TT)'s 1Q25 results could be relatively flat quarter-over-quarter.  

Vanguard Intl Semiconductor (5347 TT)'s demand for Display Driver IC (DDIC) is on the rise, surpassing the growth seen in Power Management IC (PMIC).
Despite the potential increase in shipments in 1Q25, the rise in lower-margin products, such as 8" DDICs for large panels, is notable.


Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

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)

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): 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

Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

In 1Q25, Both Sales and GM Will Increase. GM projected to increase 1.3% QoQ. Worldwide inventory healthy. VSMC construction on track, sampling in...

Patrick Liao

Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...

Patrick Liao

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

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

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Market Cap (USDm)

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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

Vanguard (5347.TT): In 1Q25, Both Sales and GM Will Increase. The Current Inventory Is Healthy.

In 1Q25, Both Sales and GM Will Increase. GM projected to increase 1.3% QoQ. Worldwide inventory healthy. VSMC construction on track, sampling in...

Patrick Liao

Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.

​Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...

Patrick Liao

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

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

Vanguard Intl Semiconductor's 1Q25 results may defy industry trends with flat performance, driven by rising demand for Display Driver ICs over...