Tech Hardware and Semiconductor

1. Taiwan Tech Weekly: TSMC & Broadcom Exploring Intel Acquisition — Implications

By Vincent Fernando, CFA, Zero One

• TSMC & Broadcom Exploring Intel Acquisitions; Potential Major Consolidation in the Foundry Space
• Taiwan AI Server Leader Expanding to Texas with New Production Hub
• Semi WFE Revenues Increase ~7% YoY In 2024. 2025 Looks Much The Same. So, Where’s The AI Effect? 

2. Intel. What’s Really Going On?

By William Keating, Ingenuity

• Carving out IFS & taking it private is the most likely outcome for Intel. However, it’s complicated by the SCIP deals and restrictions attached to the CHIPS money.  
• Intel Products Group most likely stays with Intel, maintaining the iconic brand and doubling down on efficiency and innovation. I don’t think it gets sold. 
• TSMC is unlikely to have any technical role in a spun out Intel Foundry due to a myriad of reasons including monopoly, conflict of interest, insufficient bandwidth etc.

3. Taiwan Dual-Listings Monitor: TSMC Premium Eases Down; Massive Change in UMC Headroom

By Vincent Fernando, CFA, Zero One

• TSMC: +22.2% Premium; Wait for Higher Level Before Fresh Short of Spread
• UMC: 0% Premium (Parity) — Massive Increase in ADR Headroom
• ChipMOS: +0.5% Premium; Wait for More Extreme Levels; Earnings Ahead

4. Himax Sees Chinese Automakers Far Ahead in Adopting Touch Displays; CoPackaged Optics Key for AI/HPC

By Vincent Fernando, CFA, Zero One

• Himax 4Q24 Results Show Auto Display Surge — Structural Growth Story Visible with Touch Panel Usage in Vehicles Soaring
• China vs. the Rest of the World: Who’s Moving Faster? China Automakers Far Ahead in Display Sophistication
• Himax on Co-Packaged Optics (CPO) — A Critical New Technology for AI and HPC Processing

5. Semi WFE Revenues Increase ~7% YoY In 2024. 2025 Looks Much The Same. So, Where’s The AI Effect?

By William Keating, Ingenuity

• Q424 revenues for the top 5 WFE players amounted to $28.7 billion, up 10% QoQ and up 21.7% YoY and an all time record high quarterly revenue for the segment
• For the full year 2024, revenues amounted to $99.74 billion, up 7% sequentially, and slightly exceeding our forecasted 5% growth.
• WFE growth in 2025 will be similar to 2024, with slowing China spending coupled with historic over capacity across the industry countering anticipated AI & technology transition related increases 

6. TSMC (2330.TT; TSM.US): Will TSMC Work on Intel Foundry Services? There Are Three Paradoxes…

By Patrick Liao

• It is a paradox US President wanted to make the US the number one semiconductor manufacturing country but is very likely unable to change the existing environment in the US.
• Another paradox is that a foreign company must obtain approval from the relevant US authorities before transferring control of the specific US company, which may not be feasible.
• It raises the third paradox that a Taiwanese company would need to operate an existing US entity with their company’s expertise under different cost conditions.  

7. Screen Holdings (7735 JP): 25%+ Upside Potential

By Scott Foster, LightStream Research

• FY Mar-25 guidance has been raised again after strong 3Q results. Growth should continue next fiscal year with rising demand from TSMC. 
• Sales to Chinese customers bounced back strongly last quarter, defying predictions. Capacity adds and process upgrades should continue to drive demand from China.
• FPD, PCB and printing equipment are now profitable and should remain so. More efficient production and slower growth in depreciation should also support the operating margin.

1. Taiwan Tech Weekly: OpenAI Developing Alternative to Nvidia with TSMC; Hon Hai Guides Strong 1Q25E

By Vincent Fernando, CFA, Zero One

• OpenAI Joins the AI Chip Race — Partnering with TSMC and Broadcom to Reduce Nvidia Reliance
• TSMC January Revenue Rises 35.9% — But Reduces 1Q25E Expectations Due to Quake Impact
• Hon Hai Guides for 1Q25E Growth to Be Above Average and ‘Strong’

2. Taiwan Dual-Listings Monitor: TSMC Spread Back to Extremes; ChipMOS Still High

By Vincent Fernando, CFA, Zero One

• TSMC: +24.7% Premium; Can Consider Shorting the Spread At Current Level
• ASE: +2.6% Premium; Wait for Closer to Parity Before Going Long Again
• ChipMOS: +1.8% Premium; Can Continue to Consider Shorting at Current Level

3. SMIC (981.HK): Revenue Growth Decelerated in 4Q24, and Growth Momentum to Be Regained in 1Q25.

By Patrick Liao

• SMIC’s 1Q25 guidance is for revenue to increase by 6% to 8% QoQ, and the gross margin to range from 19% to 21%.   
• Client revenue contribution from China/Europe/US has changed from 80.8%/15.7%/3.5% in 4Q23 to 89.1%/8.9%/2% in 4Q24. These numbers indicate that SMIC is gradually becoming independent from Europe and the US. 
• SMIC’s guidance for the year 2025 is that revenue growth is expected to be higher than the industry average in the same markets.

4. SMIC (SEHK: 00981, SSE STAR MARKET: 688981): Risky to Chase Strength

By Scott Foster, LightStream Research

• Media reports of a sharp decline in profit linked to trade tensions are not correct. Gross, operating and total net profit all increased from 1Q to 4Q of 2024.
• Management’s guidance for 1Q of 2025 has sales growth accelerating to 6% to 8% and the gross margin remaining relatively high at 19% to 21%. This looks reasonable.
• But the shares are near their all-time high and too expensive to chase given the potential negative impact of President Trump’s trade policy. Take profits.

5. Global Semiconductor Sales Hit Record High Of $627.6 Billion in 2024. Where To Now?

By William Keating, Ingenuity

• Global semiconductor sales reached a all time record high of $627.6 billion in 2024, an increase of 19.1% YoY, details here:
• As anticipated, semi sales eased off in December 2024, reaching $57.0 billion, a decrease of 1.2% MoM but still up 17% YoY.
• WSTS is forecasting 11.2% growth in 2025. Based on the planned ~40% increase in Mag7 CapEx, we think this is too low and needs to be revised upward to >15% 

6. ASEH (3711.TT; ASX.US): A Seasonal Decline in 1Q25, But US BIS Policy Will Help ASEH Business.

By Patrick Liao

• 4Q24 IC ATM sales recorded NT$162bn, up 1% QoQ, GM: 16.4%, down 0.1% QoQ. EMS sales were NT$74.9bn, down 1% QoQ mainly due to seasonality. 
• 1Q25 EMS sales will decline slightly YoY, and OPM is down 0.13ppts YoY. IC-ATM sales will decline mid-single-digits QoQ and GM is down slightly more than 1% QoQ.
• Believes it will bring upside from new US BIS policy to ban non-listed OSAT vendors (especially China vendors) to produce US-related chip, but can’t quantify at this moment.

7. Novatek (3034.TT): The Outlook 1Q25 Is Showing Surprising Upside Due to the China Subsidy Program.

By Patrick Liao

• US-China trade war has led to tariff uncertainties. China’s subsidy program has stimulated pre-purchasing by customers in 1Q25, resulting in increased demand for televisions, tablets, phones, and IT products. 
• All three major product lines have shown seasonal growth. which LDDI has shown the largest growth, SoC follows closely, and SMDDI has lower growth.
• DeepSeek will accelerate the implementation and popularization of AI applications, benefiting the company.

8. Novatek (3034.TT): Earthquake Affecting 1Q25 Outlook; Benefited by Subsidies for China’s Electronics

By Patrick Liao

• The 1Q25 outlook is expected to see a 0-5% decline quarter-over-quarter due to the recent earthquake in southern Taiwan.  
• Factors such as increased demand related to Apple (AAPL US)  iPhone production and subsidies for China’s electronics industry are expected to boost Novatek’s output in 1Q25.
• US President Donald Trump has expressed dissatisfaction with Taiwan’s increasing dominance in the semiconductor manufacturing sector.

1. AMD Q424. Share Price Sinks As Data Center GPU Growth Stalls In H125. But Why?

By William Keating, Ingenuity

• Q424 revenues of $7.7. billion, up 12% QoQ, up 27% YoY and $200 million above the guided midpoint. This marked the company’s highest ever quarterly revenue
• AMD forecasted Q125 revenues of $7.1 billion at the midpoint, up 30% YoY but down ~7% sequentially. This caused the share price to decline by ~9% in after hours trading
• H125 is a reset period for AMD’s Data Center GPU roadmap. ROCm simply isn’t mature enough to compete effectively with NVIDIA. AMD must do better, and I believe they will.

2. Japan’s Semiconductor Gamble: Can Rapidus Challenge TSMC?

By Vincent Fernando, CFA, Zero One

• Rapidus Corporation — The Japan-based semiconductor startup has emerged as a key part of the country’s ambition to reclaim a foothold in the advanced semiconductor manufacturing space.
• How Rapidus Compares to TSMC — Rapidus’s challenge is not only in catching up with TSMC’s leading-edge process nodes but also in ensuring manufacturing maturity and cost competitiveness.
• Maintain Structural Long rating for TSMC — Accumulate on market weakness. TSMC is partially insulated from U.S. tariff risks thanks to its position producing the most advanced chips.

3. Taiwan Tech Weekly: TSMC’s Massive New 1nm GIGAFAB in Development; Can Japan Build the Next TSMC?

By Vincent Fernando, CFA, Zero One

• TSMC Expands 2nm & Advanced Packaging in Taiwan, Advances 1nm “GIGAFAB” in the South — Despite U.S. Tariff Risks
• Japan’s Semiconductor Gamble: Can Rapidus Challenge TSMC? — Maintain Structural Long for TSMC.
• Apple Supply Chain Monitor — Why Zhen Ding and Kinsus Interconnect Could Be in a Favorable Position Relative to Apple’s AI Trajectory

4. Taiwan Dual-Listings Monitor: TSMC Rebounds to Strong Premium; ASE Near Parity

By Vincent Fernando, CFA, Zero One

• TSMC: +20.8% Premium; Wait for More Extreme Level vs. Relative Range; Comments from Morris Chang on Premium
• ASE: +0.5% Premium; Good Level to Go Long the Premium
• ChipMOS: 1.9% Premium; Can Consider Shorting Premium at Current Level

5. MediaTek (2454.TT): A Good Start in 1Q25; D9500 Launched After About 1H25; China Subsidy.

By Patrick Liao

• The upcoming 1Q25 could be relatively flat or slightly higher than 4Q24, which represents a better start than usual due to seasonal effects.  
• The Dimistry 8400/9400 models have been successful sellers, and a new Dimistry 9500 is expected to be launched after the first half of 2025. (link)
• The China electronic household subsidy program, including smartphone, has resulted in over 8 million sales in shipments within 4 days on Jan 25.

6. MediaTek (2454.TT): 1Q25 Guidance Beats Consensus; Providing N2 Solution Starting from 2026.

By Patrick Liao

• 1Q25 outlook is NT$140.8-151.8 billion, up 2-10% QoQ and up 6-14% YoY, with a GM of 47% ± 1.5%, beating consensuses. 
• Smartphone sales are +59% from 4Q24, increasing 14% QoQ but decreasing 1% YoY, attributed to the successful launch of the D9400, with healthy demand for smartphones and subsidy stimulation from China.
• GAI will continue to drive innovative changes in the industry, while MediaTek is evaluating the phenomenon’s effect on resource allocation. 

7. Qualcomm Q125. Firing On All Cylinders & An Ace Up Their Sleeve…

By William Keating, Ingenuity

• Q125 revenues of $11.7 billion, up 18% YoY, up 15% QoQ and marginally above the high end of the guided range. This represented the company’s highest ever quarterly revenue
• In December, Snapdragon X Series had more than 10% share of the greater than $800 Windows laptops in U.S. retail.
• A recent hire suggests Qualcomm has an ace up their sleeve and that they are poised to launch yet another diversification gambit

8. PC Monitor: Latest Qualcomm & Mediatek Results Show ARM-Based Chips Disrupting the PC Market

By Vincent Fernando, CFA, Zero One

• Growing Signs That ARM-Based Chips Are Set to Disrupt the PC Market
• Qualcomm’s Earnings Call Insights — Snapdragon’s ARM-Based Push into PCs Successfully Taking Significant Market Share
• Mediatek Earnings Call Highlights — Reiterates ARM-Based Entry into PC Market with AI Supercomputer CPU in Collaboration with NVIDIA

1. DeepSeek R1. Ahem, This Is Awkward..

By William Keating, Ingenuity

• DeepSeek’s R1 is a game changer that’s taken the world by storm. It’s a fantastic accomplishment by a Chinese team and a huge endorsement of the open source approach
• US competitors have egg on their faces now, but they will adapt. Competition is always a good thing & the future of AI just got a whole lot brighter
• Last night’s selloff was a Chinese New Year gift. Just accept it. Happy CNY to all!

2. Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium

By Vincent Fernando, CFA, Zero One

• PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
• Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth? 
• TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US. 

3. Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?

By Vincent Fernando, CFA, Zero One

• SK Hynix Expects 100% HBM Revenue Growth in 2025E After a Massive 2024 — Which Means Traditional DRAM Doesn’t Matter as Much Anymore
• DeepSeek Market Fears — A Problem for HBM & Enterprise SSD Memory?
• AI Industry Opportunities Are Not a Fixed Size Pie — Will DeepSeek Impact HBM DRAM TAM? Why We Don’t Think So

4. PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell

By Vincent Fernando, CFA, Zero One

• Recent U.S. Market Weakness Appears to Have Been More Focused on Falling Sentiment for Server Businesses, Not PCs
• CES 2025 Showed Qualcomm Chips Gaining Momentum in PCs, While AMD Continued Aggressive Competition — Intel Under Pressure
• PC Maker Universe to Experience Decent Revenue Growth in 2025E — Structural Long Asustek & Dell

5. Taiwan Dual-Listings Monitor: Dramatic Spreads Open Up After DeepSeek Rout & Taiwan Market Closure

By Vincent Fernando, CFA, Zero One

• TSMC: 10.8% Premium; Taiwanese Investors Likely to Be Less Shocked by DeepSeek News?
• UMC: -7.3% Discount; The Latest Extreme Discount Cannot Be Sustained
• ASE: -10.2% Discount; This Extreme Discount Also Cannot Be Sustained

6. ASML. Strong Finish For 24, Robust Outlook For 25 With AI As Key Growth Driver

By William Keating, Ingenuity

• ASML reported Q424 revenues of €9.3 billion, marginally above the high end of the guided range, up 24% QoQ and up 28.5% YoY.
• Full year 2024 revenue amounted to €28.3 billion, up 2.7% YoY and a modest improvement on the previously forecasted zero growth
• Guided full year 2025 revenues to be in the $30-$35 billion range, representing a 15% YoY increase at the midpoint.

7. Apple Supply Chain Monitor: Latest AAPL Results — Taiwan Suppliers Well Placed for Monday Re-Open

By Vincent Fernando, CFA, Zero One

• Apple 1Q25 Results — Overall Price-Supportive for Taiwan Supplier Share Prices When the Taiwan Market Re-Opens Monday
• Why Zhen Ding Technology Holding (4958 TT) and Kinsus Interconnect Tech (3189 TT) Could Be in a Favorable Position Relative to Apple’s AI Trajectory
• Increasingly sophisticated Apple products require significantly more complex PCBs & interconnect solutions, especially as advanced packaging has become a key enabler of high-performance computing.

8. Semiconductor’s Over-Dependency on AI

By Jim Handy, Objective Analysis

• A new AI platform named DeepSeek threatens today’s Large Language Model status quo
• Certain chip companies have become over-dependent on AI, including Nvidia, Samsung, SK hynix, and Micron, and their stock has tumbled
• It’s too early to tell what will occur over the long term

9. Intel Q424. It’s A Journey, Not A Destination

By William Keating, Ingenuity

• Q424 revenues of $14.3 billion which was $500 million above the guided midpoint, down 7% YoY but up 7.5% QoQ.
• Forecasted Q125 revenues of $12.2 billion at the midpoint, down $500 million YoY and down 15% QoQ
• Transition to EUV abysmally slow, Falcon Shores cancelled, Clearwater Forest delayed, GMs will see some improvement or mixed improvement in 2026. 

1. UMC. Now I’m Interested…

By William Keating, Ingenuity

• UMC reported Q424 revenues of NT$60,386 million, flat sequentially and in line with guidance.
• For the full year 2024, revenues amounted to NT$232,303 million, representing an increase of 4.4% YoY.
• Share price at a 4 year low and the outlook is still tepid, but almost $6 billion CapEx invested during the downturn years will pay dividends in the coming years..

2. Taiwan Dual-Listings Monitor: TSMC Spread Down But Still Extreme; UMC Rare ADR Discount Level

By Vincent Fernando, CFA, Zero One

• TSMC: +23.9% Premium; Fallen But Remains in Historically Extreme Territory
• UMC: -3.6% Discount; Good Level to Go Long the ADR Spread
• ASE: +0.3% Premium; Can Consider Going Long the Spread at Current Level

3. UMC (2303.TT; UMC.US): Earthquake Alters 1Q25 Outlook; 2025 Growth Expected to Low Single Digits YoY

By Patrick Liao

• Shipment: expected to decrease by mid-single-digits QoQ ASP: Remains flat in USD/NTD appreciation may lead to decline for 1Q25 sales. 
• UMC’s addressable market in 2025 will grow in the low-single-digits YoY, driven by a moderate recovery in consumer applications in mature nodes.  
• 1Q25 consumer will grow QoQ thanks to higher DTV, DDI, Wi-Fi, and STB demand. Other applications will decline QoQ.

4. Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology

By Vincent Fernando, CFA, Zero One

• UMC Results This Week; Insight Into Supply/Demand Environment for More Mature Semiconductor Segments
• Nvidia and TSMC Announce Partnership in Silicon Photonics Technology — Will Enable More Energy-Efficient AI
• TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth 

5. Silicon Motion: Memory Controllers Emerging as Strategic Pillar for Global HPC and AI Leadership

By Vincent Fernando, CFA, Zero One

• What is PCIe 5.0 and Why SIMO is Poised to Expand Market Share with PCIe 5.0
• PCIe 5.0 and Beyond — Importance for Enterprise HPC and AI Data Centers
• Looking Ahead: MaxLinear Arbitration in 2H25E — We Believe SIMO Likely to Win Its Termination Fee Plus Additional Award for Additional Damages

6. Stargate. It’s Not All About You Microsoft. Or You Either Elon

By William Keating, Ingenuity

• President Donald Trump announced the Stargate Project, a new company which intends to invest $500 billion over four years building new AI infrastructure for OpenAI in the United States.
• Elon Musk is miffed, Microsoft says they “approved” the project and have a new Right of First Refusal agreement in place with OpenAI. 
• Stargate is exclusively for OpenAI and the press release states that its mission is to provide a strategic capability to protect the national security of America and its allies.

7. United Microelectronics 4Q24 Results: Intel Partnership On Track and Is A Key Model for UMC’s Future

By Vincent Fernando, CFA, Zero One

• UMC Misses 4Q24 Expectations — Gross Margin Dips with Flat QoQ Revenue
• UMC Guides for 40% Reduction in Capex Budget — We Believe Signals Strategic Shift to Less Capex Intensive Business Model
• Intel 12nm Partnership Remains on Track and is Key Business Model for Future; UMC Sees Improvement in Consumer Electronics Industry Inventories

8. TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.

By Patrick Liao

• Taiwan experienced an earthquake on January 21st, and the tremors are still ongoing.
• Dr. CC Wei, Chairman of TSMC, explained the establishment of over 10,000 additional Standard Operating Procedures (SOPs) at the U.S. Fab.  
• The yield at TSMC’s Arizona fab is about 4% higher than at their Tainan fab, marking a record for initial production.   

9. Novatek (3034.TT): Rush Orders Received and Beneficial from Chinese Household Electronic Demand.

By Patrick Liao

• Novatek Microelectronics Corp (3034 TT) 1Q25 demand has surged abruptly, with a likely 5% quarter-over-quarter shipment increase.  
• China’s substantial demand is capable of supporting a Fabless leader like Novatek.  
• The unexpected demand surge in 1Q25 has greatly benefited Novatek .  

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

By Patrick Liao

• 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.

1. Taiwan Dual-Listings Monitor: TSMC Premium Near All-Time Highs; CHT Rare Discount Level

By Vincent Fernando, CFA, Zero One

• TSMC: +28.4% Premium; Near-All-Time High, Good Level to Short the Spread
• UMC: -0.4% Discount; Fifth Consecutive Month of Increase in ADR Headroom
• CHT: -0.9% Discount; Good Level to Go Long the Spread

2. TSMC Q424 Earnings Preview, 2025 & Q125 Look Ahead

By William Keating, Ingenuity

• December 2024 revenues of NT$278.16 billion, up 0.8% MoM and up a remarkable 57.8% YoY. It was the second highest monthly revenue in the company’s history.
• Q424 revenue amounted to NT$868,460. At the company’s forecasted exchange rate for Q4,  NT$32 to the US$, this amounts to $27.14 billion, the company’s highest quarterly revenue ever
• We expect 2025 to be another growth year for TSMC, likely in the mid to high teens range. Expect Q125 to be down ~5% QoQ based on normal seasonality.

3. Is Quantum Computing An Existential Threat To NVIDIA?

By William Keating, Ingenuity

• This is the claim made by an analyst covering IonQ after Jensen’s comments at CES 2025 last week, which tanked share prices of the top four QC proponents
• The CEO’s of both D-Wave and IonQ responded rapidly with press releases refuting his claims and sharing updated, positive news wrt their financials
• What exactly did he say that caused such a response, is he correct or is QC going to eat NVIDIA’s lunch? 

4. TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth

By Vincent Fernando, CFA, Zero One

• TSMC 4Q24 Gross Margin Comes In At High End of Range; Profit +57% YoY
• TSMC’s Latest Strong Capex Guidance is Good News for Industry Sentiment
• Long-Term Gross Margins — Will Recently High Gross Margins Become a “New Normal”?

5. TSMC (2330.TT; TSM.US): Will Rapidus Threaten TSMC’s 2nm Market? We Think It’s Too Early to Say.

By Patrick Liao

• There is a great opportunity for someone joining an advanced semiconductor manufacturing camp because there could be fewer players in the field.  
• For a long time, TSMC production staff have won better bonuses in the company, meaning they might be able to overcome the difficulties in production.  
• Rapidus might need another 5 years or more to become profitable if everything runs smoothly for 2nm technology. 

6. Taiwan Tech Weekly: TSMC Results; Earnings Preview; Delta Thailand Convertible

By Vincent Fernando, CFA, Zero One

• TSMC Results Today; Arizona Production of 4nm Started, Yield on Par with Taiwan
• TSMC Q424 Earnings Preview, 2025 Outlook & Q125 Look Ahead 
• Delta Taiwan Vs. Thailand Monitor: Convertible Sale; Delta Thailand Should Underperform Vs Parent Co 

7. TSMC (2330.TT; TSM.US): 4Q24 Results and 1Q25 Guidance; CoWoS Grows 45% CAGR; Setup of 10 Fabs WW.

By Patrick Liao

• Revenue reached USD$26.88 billion (compared to guidance of 26.1-26.9 billion USD) / NTD$868.46 billion  (+14.3% QoQ, +38.8% YoY); Gross margin at 59%,within the guided range of 57-59%.
• Revenue expected to be in the range of USD$25-25.8 billion (-5.5% QoQ) impacted by seasonal factors, offset by AI demand. Gross margin: 57-59%.   
• AI revenue is expected to double in 2025. With the advancement of AI technologies, the company anticipates mid-40s CAGR for AI accelerators within a five-year period (2024-2029),

8. Delta Taiwan Vs. Thailand Monitor: Convertible Sale; Delta Thailand Should Underperform Vs Parent Co

By Vincent Fernando, CFA, Zero One

• Delta Thailand Weakness Amid Block Trade and Convertible Bond News
• Delta Taiwan Offering Convertible Bonds, Convertible into Delta Thailand Shares
• Delta Thailand Still Overvalued Relative to Delta Taiwan — Short Delta Thailand vs. Long Delta Taiwan

9. UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

By Patrick Liao

• In 1Q25, there was a further improvement to -5% QoQ for UMC, and its gross margin is at around 26-28%.
• The extra improvement is from Novatek Microelectronics Corp (3034 TT), which has also received an additional order from Vivo.   
• The outlook remains unclear as Samsung Electronics (005930 KS) is facing uncertainties in 2025.

10. TSMC. The Juggernaut Accelerates!

By William Keating, Ingenuity

• AI related demand accounted for ~15% of revenue in 2024, i.e. ~$13.5 billion. This is set to double to $27 billion in 2025
• 5 year growth CAGR of 20%, at the top end of the previously guided 15-20% range
• On track for $100 billion revenue in 2025, and most likely, $200 billion by 2030

1. NVIDIA @ CES 2025. Forget The AIPC, We’ve Got A Supercomputer PC!

By William Keating, Ingenuity

• Project Digits is a supercomputer on everybody’s desk for $3000. Seems crazy but feels like 1977 Ken Olson moment “no reason anyone would want a computer in their home”
• Lack of data center revenue growth predictions likely spooked investors and triggered a ~10% pullback. Just buy the dip, you know you want to…
• Micron and MediaTek both jumped on news of their further involvement in NVIDIA’s AI acceleration hardware supply chain. 

2. TSMC (2330.TT; TSM.US): 1Q25 Outlook, TSMC Will Use 2nm in 4Q25, and Production Will Occur in 1Q26.

By Patrick Liao

• After the peak of 4Q24, Taiwan Semiconductor (TSMC) – ADR (TSM US)‘s  revenue will see a decline of about -5% QoQ in 1Q25.  
• TSMC is expected to use 2nm technology in 4Q25, and we believe Advanced Micro Devices (AMD US) and Apple (AAPL US) could present products around 1Q26.
• TSMC could be set to announce its 2nm production plans, expansion into the US, Germany, and Japan, mature technology quotations, and the Capex budget for 2025. 

3. 2025 AI & Semiconductor Outlook

By Douglas O’Laughlin, Fabricated Knowledge

• Last year, I called 2024 the year of AI’s adolescence, and that was quite a call. I “predicted” growing pains or a tremendous growth spurt, and the immense growth spurt happened all right.
• This last year was the year of AI through and through.
• There’s a deep irony because anything related to AI had a phenomenal year while everything else languished. Surprisingly, SOXX underperformed the SPY, which seemed unheard of for the year that SOXX’s largest components ripped 100%+.

4. Intel @ CES 2025. Doubling Down On The AIPC & Other Fantastical Tales

By William Keating, Ingenuity

• Intel is pinning much hope on the success of the AIPC, a venture in which they are tied at the hip with Microsoft, which calls it a CoPilot+ PC
• The AIPC/CoPilot+ PC concept is struggling to gain traction. They will sell in volume, but only because buyers will have limited alternatives available. Ultimately, we see AIPCs cannibalising non-AIPCs
• Intel’s performance was underwhelming to say the least, but at the same time, not in the least bit surprising. Earnings coming on January 23. 

5. Taiwan Tech Weekly: Latest TSMC Pricing for Apple Supports Bullish Margin Case; SK Hynix’s HBM Win

By Vincent Fernando, CFA, Zero One

• Latest TSMC Price Hike — Introducing the $18,000 Wafer; Supports The Case That Management Margin Guidance is Overly Conservative
• Mover Over Apple, Nvidia Could Become TSMC’s Largest Customer in 2025E
• SK Hynix(000660.KS): Insisting on HBM Technology and Continuing to Surpass Samsung in Net Earnings 

6. UMC (2303.TT; UMC.US): 1Q25 Outlook; Surprise Support of Taiwanese Fabless.

By Patrick Liao

• United Microelectron Sp Adr (UMC US) experiences approximately a 5-10% quarter-over-quarter (QoQ) decline in 1Q25. For the full year of 2025, we anticipate a modest year-over-year (YoY) decline of around 5%.
• We have observed some strength from Taiwanese Fabless companies, which could support the 1Q25 demand for UMC.  
• It has been noted that mature wafer demand is not solely driven by China and may help offset the impacts of the US-China Trade War, benefiting foundries outside of China.

7. Intel (INTC.US): Exploring a Tough Journey. (II)

By Patrick Liao

• Considering of current financial outcome of Intel Corp (INTC US), we cannot but favor Advanced Micro Devices (AMD US).
• Currently, Advanced Micro Devices (AMD US) has a more favorable competitive landscape compared to Intel Corp (INTC US).
• The competition in PC CPU emphasizes not only performance but also heat dissipation and other techniques related to supply management.    

1. Micron. So Long Legacy & Hello There HBM, Data Center & Leading Edge

By William Keating, Ingenuity

• Micron’s Q1F25 met expectations on key metrics but the ~9% downward guidance for the current quarter sent the share price into a tailspin
• Consumer-Related inventory issues and China competition were highlighted as the root causes for the surprise downward guide
• Micron is ok to cede legacy products to China competition and focus instead on the much more lucrative leading edge products, especially HBM. The transition could be rocky however

2. Memory Monitor: The Emerging Mass-Market Edge AI Need for Mobiles; Long Micron Vs. Short Nanya Tech

By Vincent Fernando, CFA, Zero One

• Micron’s Latest Outlook Disappoints & Shares Fall; Decoupling Trade Between SK Hynix & Nanya Tech Has Worked However
• Smartphone AI Insights — On-Device Local Search & Context-Aware Interfaces Emerging as Key Local AI Needs
• Conclusion — Consider Swapping In MICRON as the Long Side of the Memory Decoupling Trade

3. Nvidia (NVDA.US): To Establish Offshore Headquarter in Taiwan.

By Patrick Liao

• NVIDIA Corp (NVDA US) CEO Mr. Jensen Huang announced plans to establish an offshore headquarters in Taipei during his visit this June.
• From a geopolitical perspective, Taiwan is one of the focal points where the U.S. and China could potentially be in conflict. 
• Focusing on AI, NVIDIA Corp (NVDA US) is currently attracting significant attention, but the decision to establish an offshore headquarters in Taipei is raising curiosity.

4. Hamamatsu Photonics (6965 JP): Rebound Ahead

By Scott Foster, LightStream Research

• Profits and share price stabilizing after steep declines, although margins still under pressure from rising R&D and depreciation, and costs associated with recent acquisitions.
• Sales of medical equipment to recover from post-COVID decline. Semiconductor equipment driven by advanced logic and high-bandwidth memory. Lasers to become fourth major product division.
• Buy for the long-term. Risks include Trump tariffs, weak European economies, emergence of Chinese competition.

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

By Vincent Fernando, CFA, Zero One

• 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 & Rate UMC as Outperform

6. The US-China Trade War Is Likely to Split the Semiconductor Industry into Two Groups.

By Patrick Liao

• The US-China trade war has shaped a new trend: Advanced and Matured Technologies led by Taiwan Semiconductor (TSMC) – ADR (TSM US) and Semiconductor Manufacturing International Corp (SMIC) (981 HK) respectively.
• Notably, construction of semiconductor fabs in Singapore seems to be of lesser concern at the moment.
• The emergence of AI offers new hope, not only for advanced semiconductor technology but also for lagging technologies.

7. Taiwan Tech Weekly: Rapidus’s Challenge Vs. TSMC for 2nm; Hon Hai Hunting for Automaker Acquisition

By Vincent Fernando, CFA, Zero One

• Rapidus vs. TSMC: Can Japan’s Newcomer Compete in the 2nm Race?
• Memory Monitor: The Emerging Mass-Market Edge AI Need for Mobiles; Long Micron Vs. Short Nanya Tech 
• Hon Hai Pauses Nissan Pursuit Amid Honda Talks — A Japanese Savior for Nissan is Likely But This Confirms Hon Hai’s EV Ambitions Remain High

8. Taiwan Dual-Listings Monitor: TSMC ADR Spread Near All-Time Highs; UMC at Upper End of Range

By Vincent Fernando, CFA, Zero One

• TSMC: +25.4% Premium; At Historical Highs, Good Level to Short the Spread
• UMC: +2.1% Premium; Upper Level of Historical Range, Short Level
• ASE: +5.4% Premium; Near-Term High However Likely Best to Wait for Higher Levels

9. Nidec (6594 JP): Acquisition of Makino Milling Would Add Value

By Scott Foster, LightStream Research

• Nidec has announced its intention to acquire Makino Milling Machine (6135 JP) for ¥11,000 per share, a 42% premium over Thursday’s closing price.
• The stock market liked the idea. Nidec’s share price rose 4% on Friday. Makino’s jumped 19%. The pice looks high, but at 17.7x Makino’s EPS guidance, it is not unreasonable.
• The acquisition would be accretive to earnings and bring greater scale and competitiveness to Nidec’s machine tool business. It should support our Buy recommendation. 

10. SK Hynix(000660.KS): Insisting on HBM Technology and Continuing to Surpass Samsung in Net Earnings

By Patrick Liao

• SK Hynix (000660 KS)‘s key turning point is its dedication to developing High Bandwidth Memory (HBM) technology, which has finally paid off.
• In the third quarter of 2024, SK Hynix (000660 KS) continued to surpass Samsung Electronics (005930 KS) net earnings based on their financial results.   
• Samsung Electronics (005930 KS) is reportedly exploring partnership opportunities with Taiwan Semiconductor (TSMC) – ADR (TSM US) in the realm of HBM, aiming to strengthen its ties with NVIDIA.

1. Mediatek: Google Reportedly Dropping QCOM & Adopting Mediatek for Pixel 10 Modem; Structural Long

By Vincent Fernando, CFA, Zero One

• Report — Google Drops QCOM, Shifts to MediaTek for Pixel 10’s 5G Modems
• Strong “Double” Indication for Mediatek’s Competitiveness — Combined with Recent Reports that Mediatek Won Apple to Provide Modems for the Apple Watch
• Mediatek’s Opportunity to Deliver a Big Win for Google; Maintain Our Structural Long Rating for Mediatek.

2. Taiwan Tech Weekly: Apple’s TSMC 2nm Power Move Beats Samsung; Himax Ascends with TSMC/Nvidia Halos

By Vincent Fernando, CFA, Zero One

• Apple’s 2nm Power Move with TSMC — Beating Samsung Yet Again
• Why TSMC’s 2nm Will be Huge — Extending Tech Lead vs. Samsung & Major AI/Power Consumption Benefits for Customers
• The Memory Decoupling Trade is Working — Nanya Tech Underperforms SK Hynix

3. TSMC (2330.TT; TSM.US): 2025 Could Achieve 25% Yearly Growth.

By Patrick Liao

• We anticipate Taiwan Semiconductor (TSMC) – ADR (TSM US) can achieve a 25% growth in 2025.  
• It is unsurprising for TSMC to dominate in AI, including the assembly and testing segments.  
• Chinese companies are also involved in AI, but there hasn’t been a recent spread as a result of U.S. sanctions.  

4. General Motors Abruptly Pulls The Plug On Cruise

By William Keating, Ingenuity

• GM announced it will no longer continue to fund its loss making Cruise subsidiary, effectively ending its RoboTaxi ambition. Market reaction? Nothing.
• Microsoft has already announced it will write off its $800 million investment made back in 2021 when Cruise was valued at $30 billion
• Root cause? The tsunami that was triggered by Cruise’s botched response to an accident in October 2023. 

5. Taiwan Dual-Listings Monitor: TSMC Spread at Short Level; UMC and CHT Short Interest Spikes

By Vincent Fernando, CFA, Zero One

• TSMC: 22.7% Premium; Good Level to Short the Spread Given Historical Trading Range
• UMC: +0.2% Premium; Middle of Historical Trading Range; Short Interest Rises to New High
• CHT: +0.5% Premium; Major Spike in Short Interest for the Local Taiwan Shares

6. MediaTek (2454.TT): Google Pixel 10 Will Use MediaTek’s Modem

By Patrick Liao

• Alphabet (GOOGL US) Pixel 10 will use the Mediatek Inc (2454 TT) T9000 modem.  
• The shipment quantity to the smartphone market is small, and we see this as a small triumph for Mediatek Inc (2454 TT).
• Samsung Electronics (005930 KS) is facing a 3nm process issue and lacks the capacity to support its own smartphone CPU Exynos 2400.

7. Scaling Laws Meet Economics, but Adoption is still Accelerating

By Douglas O’Laughlin, Fabricated Knowledge

• Technological model scaling is not dead, but we are clearly at a critical moment when the definitions will shift.
• Pre-training, the original scaling law, might hit its first diminishing return. The piece SemiAnalysis used the analogy that pre-training was like the end of Dennard’s law.
• However, multi-core scaling led to another decade of scaling transistors. Technology progresses, just not in the same way.

8. Intel (INTC.US): Exploring a Tough Journey.

By Patrick Liao

• Regardless of the circumstances, Intel Corp (INTC US) must select a new CEO and hope that a new strategy will turn the situation around.  
• A possible decision to spin off Altera could signal the possibility of Intel further breaking into several parts.
• For the near term, Intel must overcome financial and management challenges, and laying off 1/10 of its workforce is a short-term and necessary step.