Tech Hardware and Semiconductor

1. Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive

By Vincent Fernando, CFA, Zero One

• Delta Thailand Has Dramatically Underperformed Delta Taiwan — Delta Thailand Now Finally Trading at a Less Extreme Level vs. Delta Taiwan
• Latest Relative Growth Profiles — Delta Taiwan Has Higher Growth Profile in 2025E
• Even After the Major Pricing Reversion Since Mid-February, Delta Thailand Remains Overvalued Relative to Delta Taiwan

2. Taiwan Dual-Listings Monitor: TSMC Spread Close to Long Level; UMC & ASE Deep Discounts

By Vincent Fernando, CFA, Zero One

• TSMC: +14.9% Premium; Spread Has Fallen Close to Long Levels
• UMC: -2.6% Discount; Good Level to Go Long the Spread
• ASE: -3.2% Discount; Spread at Extreme Low, Good Level to Go Long

3. Intel Vision: Lip Bu Tan’s First Keynote As Intel CEO

By William Keating, Ingenuity

• Rather than love, than money, than fame, give me the truth
• I intend to under promise and over deliver. I will not be satisfied until we delight you
• How long will I stay at Intel? I’m here for as long as it takes

4. Intel’s Annual Shareholder Meeting Proxy Statement Has A Few Interesting Gems

By William Keating, Ingenuity

• We remain steadfast in our belief in our company’s future. That said, there are no quick fixes. We need to demonstrate consistent execution and results over a sustained period. Frank Yeary
• Intel’s ELT scored themselves a remarkable 29.7 out of 35 for their 2024 “Product Leadership” goal, despite mounting data center market share loss and Gaudi being an abject failure
• While Pat Gelsinger’s departure from Intel was labelled a “retirement” last December, the Proxy Statement refers to it as a “resignation”. Which was it?

5. Taiwan Tech Weekly: TSMC Goes ‘Taiwan Speed’ in Arizona; Phison Predicts Edge AI Flash Memory Boom

By Vincent Fernando, CFA, Zero One

• TSMC Accelerates U.S. Expansion — New Arizona Fab to Be Built at ‘Taiwan Speed’
• Phison CEO Sees Decade-Long Boom for NAND Flash as AI Shifts to the Edge
• Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive 

6. UMC (2303.TT; UMC.US): Merges with GFS? It Should Be a Terrific, but It Won’t Be Easy to Happen.

By Patrick Liao

• Both United Microelectron Sp Adr (UMC US) and GLOBALFOUNDRIES (GFS US) saw positive reactions in their stocks following a possible merger news, despite the current instability in the stock markets.  
• Although GLOBALFOUNDRIES (GFS US)‘s technology is held above 7nm, it is ahead of United Microelectron Sp Adr (UMC US), which is still certain generations above China’s current technology in general.  
• If these two companies wish to merge, there are still some subjective factors that need to be considered, and it will not be easy to get approval.  

1. Taiwan Tech Weekly: Delta At Nvidia GTC 2025; Foxconn EV Strategy Win; Key Semi Industry Indicators

By Vincent Fernando, CFA, Zero One

• NVIDIA GTC 2025 Last Week — Delta Electronics Expands Role in Nvidia Ecosystem Showcasing AI-Centric Power Solutions
• Foxconn’s Huge EV Bet Pays Off: Key Mitsubishi Win Could Spark Additional Automaker Deals to Come 
• Semiconductors. Key Indicator Updates, 2024 In Review, and 2025 Forecasts 

2. Foxconn’s Huge EV Bet Pays Off: Key Mitsubishi Win Could Spark Additional Automaker Deals to Come

By Vincent Fernando, CFA, Zero One

• Mitsubishi Motors plans to outsource EV production to Foxconn, signaling the most significant commercial validation of Foxconn’s MIH EV platform to date.
• While Foxconn’s AI server manufacturing is currently the company’s strongest growth driver, its EV strategy is increasingly gaining credibility as a second long-term pillar.
• Foxconn — Structural Long. We see depressed share price as buying opportunity. Mitsubishi contract win increases the probability for additional major OEM production partnership wins this year for Foxconn.

3. Silicon Box. A Sad Development & Sadly, Still A Black Box

By William Keating, Ingenuity

• On September 18 2024, one of the three co-founders of Silicon Box, Dr. Sutardja, sadly passed away. An industry visionary, much loved by many. May he rest in peace.
• The company’s website still does not reflect this fact, and an interview with their Head of Business just two weeks after his passing, bizarrely doesn’t mention it at all
• With just six press releases in four years, the company is slow to communicate progress and remains vague on precisely which specific technologies they offer. Still a black box IMO

4. UMC (2303.TT; UMC.US): 1Q25 Results Could Be Upbeat, but 2Q25 Could Be a Bit Downside.

By Patrick Liao

• The 1Q25 outlook is slightly affected by earthquakes, but production can resume in late 1Q25.
• The UMC 12nm project could be in vain if Intel collaborates with TSMC or if TSMC takes over Intel’s foundry service.   
• UMC’s annual revenue could see a -5% year-over-year growth in 2025, but there may be a few percentages increase in wafer shipments.  

1. Intel. Mr. Tan’s Greatest Challenge Is Not Process Or Foundry Leadership. It’s Something Far Bigger

By William Keating, Ingenuity

• Whether Intel can achieve Process or Foundry leadership in a credible timeframe is something Mr. Tan has relatively little control over in the short term.
• His most pressing challenge will be to address the corporate culture of entitlement that’s rife throughout the company, starting with the BoD
• Measure his success by the number of high profile resignations we see in the coming months. Those who created Intel’s problems cannot be the ones to fix them. 

2. Tokyo Electron (8035 JP): Buy if You’re Not Afraid of Recession

By Scott Foster, LightStream Research

• After dropping by half, Tokyo Electron’s share price has bounced. But it is still vulnerable to cutbacks in AI-related investments and tariff-induced recession.
• A positive scenario has net profit rising by 8% in FY Mar-26. In a negative scenario, it drops by 25%. We take the positive view.
• Innovations in manufacturing point toward a big step up in profit margins by the end of the decade. But watch out for a cyclical downturn between now and then.

3. Taiwan Dual-Listings Monitor: TSMC Spread Rebounds; ChipMOS Local Short Interest Spiking

By Vincent Fernando, CFA, Zero One

• TSMC: +19.4% Premium; Consider Shorting if Spread Rises Above 20%
• ASE: +0.5% Premium; Ideally Wait for Lower Level But Near-Zero Still a Long Opportunity
• ChipMOS: -0.8% Discount; Wait for More Extreme Levels; Short Interest Spiking in Local Shares

4. Semiconductors. Key Indicator Updates, 2024 In Review, 2025 Forecasts

By William Keating, Ingenuity

• Global semiconductor sales for the month of January 2025 hit $56.5 billion, an increase of 17.9% YoY, but down 1.7% MoM
• TSMC is also off to an excellent start in 2025. YTD revenues through February are up 39.2%.
• 2025 Semi forecast? Think 2024 without the memory boom and way more volatility

5. Taiwan Tech Weekly: Mediatek Wins Google AI Chip from Broadcom; Hon Hai to Expand U.S. Production

By Vincent Fernando, CFA, Zero One

• Google Diversifying from Broadcom to Mediatek for Next Generation AI Chip
• Hon Hai CEO: Clients’ U.S.-Based Tech Manufacturing Set To Expand
• Memory Monitor: Multiple Reports Indicate Rising NAND & DRAM Prices

6. Intel (INTC.US): Exploring a Tough Journey. (III)

By Patrick Liao

• Intel Corp (INTC US) has hired Mr. Lip-Bu Tan as the new CEO effective March 18th. He was formerly a board member of Intel before resigning in June 2024.
• The A18 technology node marks a new beginning for Intel Corp (INTC US), which is believed to be the new hope, but we approach it with caution.
• Intel Corp (INTC US) should focus on developing its own technology and also consider using Taiwan Semiconductor (TSMC) – ADR (TSM US) as an insurance policy.  

7. Memory Monitor: Multiple Reports Indicate Rising NAND & DRAM Prices

By Vincent Fernando, CFA, Zero One

• Key Memory Names Have Rebounded; Micron and SK Hynix Lead
• NAND Flash Memory Prices to Increase; NAND Flash Pricing to Improve in 2H25E
• Memory Monitor Universe: NAND Flash Price Improvement Favors Long SK Hynix and Micron vs. Short Nanya Tech

8. Micron 2QF25 Earnings Call Positive, But Tread with Caution

By Jim Handy, Objective Analysis

• Micron’s strong HBM and Data Center growth has nearly offset low revenues in the remainder of the company’s business.
• This HBM growth depends heavily upon continued strength in hyperscale data center AI CapEx
• Micron outlined means to maintain stability in its industry, but China semiconductor goals are in conflict with these measures

9. MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

By Scott Foster, LightStream Research

• Japan’s top defense and aerospace contractor is being rerated to account for the limits on relying on the U.S. for defense in an alarming national security environment.
• A reasonably optimistic scenario brings MHI’s P/E ratio down to 22X in FY Mar-28, by which time Japan’s defense spending is scheduled reach 2% of GDP.
• The Trump administration wants Japan to spend more, but getting the budget through the national Diet is difficult enough as it is. 

10. Micron. HBM Gets Even Better, NAND Gets Even Worse

By William Keating, Ingenuity

• Micron this week reported revenues of $8.1 billion, down 8% QoQ but up 38% YoY, and at the top end of the guided range
• Micron is expecting to reach an annual run rate of $7.8 billion by Q425. Wow!
• NAND is headed for yet another downturn after six quarters of sequential growth. 

1. Silicon Wafers. Is It Time To Invest?

By William Keating, Ingenuity

• Worldwide silicon wafer shipments decreased by 2.7% to 12,266 million square inches in 2024, details here. This follows a 14.3% decline in the prior year.
• Silicon wafer companies continue to trade at historic lows with two of the top four players sporting P/B ratios of 0.7. Intel’s P/B is presently 0.9. This makes little sense.
• The current depreciation headwinds triggered by a huge CapEx splurge from 2021-2024 will turn to tailwinds once demand recovers and built-ahead production capacity stands ready & waiting.

2. Taiwan Dual-Listings Monitor: TSMC Trading Range Breakdown? ChipMOS Discount Rare Long Opportunity

By Vincent Fernando, CFA, Zero One

• TSMC: +14.1% Premium; Given Latest Market Weakness, Safest to Wait for a Slightly Lower Premium Before Going Long
• ASE: -1.8% Discount; Good Level to Go Long the Spread
• ChipMOS: -6.8% Discount: Long the Spread, Historical Extreme Discount Level

3. Taiwan Tech Weekly: If TSMC Joins Intel for Foundry, It Will Entrench Dominance; Structural Long

By Vincent Fernando, CFA, Zero One

• TSMC Eyes Intel Foundry Joint Venture: Strategic Expansion or Risky Bet?
• TSMC Addresses U.S. Expansion Concerns: Strengthens TSMC Position & Positive for Semi Industry Capex 
• MWC Barcelona Showcased The 6G Showdown: MediaTek Vs. Qualcomm in the Race for Wireless Supremacy 

4. Intel Finally Gets A New CEO: Lip-Bu Tan. Now What?

By William Keating, Ingenuity

• Lip-Bu Tan, former CEO of Cadence and founding partner at Walden Catalyst Ventures, will become Intel’s ninth CEO effective March 18
• Mr. Tan is an extremely impressive technology leader, speaker, & influencer with many and varied interests. He is an excellent choice for the most important CEO role in Intel’s history
• Press releases seem to emphasise Products over Foundry but any decision in this regard will take time so it doesn’t appear that Mr. Tan is simply following the board’s orders.

5. IS AI Spending Poised to Fall?

By Jim Handy, Objective Analysis

• Hyperscaler CapEx could be slowing down, based on 4Q24 spending
• Microsoft made a significant cut in Q4, but Amazon, Facebook, and Alibaba all made big increases
• Industry CapEx as a percent of revenue has slowed its growth

6. Silergy (6147.TT): 1Q25 Outlook Sales: Down QoQ but up QoQ. 2025 Outlook Sales: Up 20-30% YoY.

By Patrick Liao

• 2025 outlook Sales: up 20-30% YoY. More certain on China demand recovery. Gradually enters Mass-Production (MP) for Gen 3/4 products. Main growth drivers are consumer and Electric Vehicle.  
• Silergy targets for auto sales contributed to reach 15% in 2025.  
• Will witness a rebound in 2Q25 for computing and Consumer and auto will also grow QoQ given resumption for production in China.  

1. Taiwan Tech Weekly: TSMC’s Expansion Visualized; Implications of New U.S. Investment; New HBM Memory

By Vincent Fernando, CFA, Zero One

• TSMC’s Latest Global Expansion Plans, Visualized; Taiwan Manufacturing Will Continue to Remain One Generation Ahead of Overseas
• TSMC (2330.TT; TSM.US): Invest Further in US up to 100bn; Intel Foundry Service Gets Direct Clients.
• Memory Monitor: Nanya Tech Soared on DRAM Recovery and Custom HBM News 

2. Former CEO Claims Intel Is Back & Says Can We Please Stop Talking About Breaking It Up?

By William Keating, Ingenuity

• On March 1, ex Intel CEO Craig Barrett posted a rebuttal of his former board members opinion piece on the subject of the company’s future
• He claims that Intel is back, the company must not be broken up, the board should be fired and Mr. Gelsinger should be rehired to finish the job he started
• Meanwhile, Intel has put its Ohio fab on hold until the end of the decade, its German fab on hold for two years, both damning indictments of Mr Gelsinger’s strategy

3. Taiwan Dual-Listings Monitor: TSMC’s Range Declining; ASE Near Parity; ChipMOS Rare Discount

By Vincent Fernando, CFA, Zero One

• TSMC: +18.5% Premium; Wait for Lower Premium Before Going Long
• ASE: +0.2% Premium; Near-Parity Premium is Opportunity to Long the Spread
• ChipMOS: -3% Discount; Rare Discount is Opportunity to Long the Spread

4. TSMC To Invest A Further $100 Billion In Arizona

By William Keating, Ingenuity

• TSMC plans to invest $100 billion in the US to build three new fabs, two new advanced packaging facilities and establish an R&D centre, all in Arizona
• During the press conference at the White House, Mr Wei received fulsome praise from President Trump and was careful to thank him for his vision and support on multiple occasions
• The announcement lacked key details such as construction timelines and which process technologies would be deployed but it would still appear to have done the trick, at least for now.

5. TSMC Addresses U.S. Expansion Concerns: Strengthens TSMC Position & Positive for Semi Industry Capex

By Vincent Fernando, CFA, Zero One

• TSMC just held a press conference this evening in Taiwan regarding its expanded U.S. investment plans. TSMC said it won’t impact Taiwan investments; it is actually accelerating its Taiwan investments.
• Additionally, we see TSMC’s aggressive U.S. expansion significantly weakening Intel’s ability to compete, as it removes one of Intel’s major differentiators–domestic U.S. production.
• Maintain Structural Long rating on TSMC — Expanded U.S. investment fortifies the company’s global leadership. ALSO — Positive news for semiconductor manufacturing equipment companies internationally and in Taiwan. ASML, etc.

6. TSMC (2330.TT; TSM.US): Invest Further in US up to 100bn; Intel Foundry Service Gets Direct Clients.

By Patrick Liao

• On March 4th, Taiwan Semiconductor (TSMC) – ADR (TSM US) announced that the company will further increase its investment up to $100 billion in the US.
• The restructured case of Intel Corp (INTC US) has elicited different opinions, but a few companies may consider trying out Intel Foundry Service.
• Currently, we find these developments acceptable, although we view them as the result of political interference, and time will tell.

7. TSMC (2330.TT; TSM.US): TSMC Held Press Conference Regarding Further Investment of USD$100bn in US.

By Patrick Liao

• TSMC Chairman Dr. CC Wei pointed out that TSMC builds production lines everywhere to meet customers’ demands. TSMC has never gone against this principle.  
• On the 3rd of March, U.S. President Trump and TSMC Chairman jointly announced at the White House that TSMC would reinvest at least $100 billion in the U.S.
• Regarding concerns from the public that TSMC might gradually shift its production focus to the U.S., TSMC made it clear that this would not happen.

8. SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World

By Patrick Liao

• There is speculation about Deepseek’s wafer manufacturing yield issue at Semiconductor Manufacturing International Corp (SMIC) (981 HK) these days.  
• The potential concern serves as a signal for a hot topic within the company, carrying two underlying meanings.
• Although NVIDIA Corp (NVDA US) is making waves in AI applications, we must not overlook the potential for continued creative developments in the world, such as Deepseek’s solution.  

9. MWC Barcelona Showcased The 6G Showdown: MediaTek Vs. Qualcomm in the Race for Wireless Supremacy

By Vincent Fernando, CFA, Zero One

• The Stakes in the 6G Race: 100x Data Speeds & AI-Driven Networks
• Qualcom’s Strategy vs. Mediatek’s Gameplan to Win the 6G Battle — Takeaways from MWC 2025 in Barcelona
• Investment Takeaways: MediaTek vs. Qualcomm — Maintain Structural Long for Mediatek but Qualcomm Could Offer Near-Term Relative Value Play

10. GlobalWafers (6488.TT): An Uncertainty Exists Whether Si Wafer Is Included in US Custom Tax or Not.

By Patrick Liao

• Regarding global silicon wafer market prices, Globalwafers (6488 TT) noted that the Long-Term Agreement (LTA) for 12-inch wafers primarily focuses on advanced process nodes, with prices remaining stable.
• In December 2024, Globalwafers (6488 TT) signed a final agreement with the U.S. Department of Commerce, expecting to receive a maximum subsidy of USD$406mn.  
• Globalwafers (6488 TT) has not received any notifications regarding adjustments to chip policies.

1. Taiwan Dual-Listings Monitor: TSMC Spread Falls From Elevated Level; UMC & ASE Discount Opportunity

By Vincent Fernando, CFA, Zero One

• TSMC: +17.2% Premium; Wait for Lower Levels Before Going Long
• UMC: -1.9% Discount; Can Consider Going Long the Spread at Current Level
• ASE: -0.6% Discount; Discount is Opportunity to Long the Spread

2. LITE ON Comments Signal Continued Strength in Cloud/AIOT Ahead of Upcoming Nvidia Results

By Vincent Fernando, CFA, Zero One

• Lite On Signals for Continued Strength in Cloud/AIOT Ahead of Upcoming Nvidia Results
• Lite On’s 1Q25E Outlook Was Positive and Did Not Indicate A Near-Term Slowdown
• Industry Take-Aways — Still No Signs of Acceleration on PC/Consumer… However Signals Cloud/AIoT Demand Healthy

3. NVIDIA Q425 Beats, Raises, Market Yawns, Then Vomits. A Lake Wobegon Moment Perhaps?

By William Keating, Ingenuity

• Q425 revenues were a record $39.3 billion, up 78% YoY,  up 12% QoQ, handily beating the guided midpoint of $37.5 billion. It was NVIDIA’s eight consecutive quarter of sequential growth.
• After taking an overnight break to consider its options, the markets then positively vomited on NVIDIA, sending its share price down 8.5% on Thursday
• Jensen presents a utopian, Lake Wobegon-esque vision of all pervasive AI but in reality the pace of AI adoption will ultimately be determined by the pace of AI revenue generation

4. Microsoft CEO On AI CapEx: Show Me The Money!

By William Keating, Ingenuity

• Microsoft dominated the technology news cycle recently on the back of a report by a TD Cowen analyst that the company is cancelling data centre leases in the US
• Dwarkesh Patel’s podcast with Microsoft CEO Satya Nadella last week provided a fascinating insight into his thinking when it comes to AI compute build out, AI winners & losers etc.
• Mr Nadella’s approach to AI compute build out has always been a pragmatic “show me the money and I’ll build some more compute” approach. Now we better understand why.

5. Taiwan Tech Weekly: Trump’s New China Chip Restrictions; Foxconn & Honda Alliance?; TSMC & Intel

By Vincent Fernando, CFA, Zero One

• Trump Adminstration Gearing Up to Further Restrict China’s Access to Chip Technology — Could Restrict Servicing of Existing Equipment
• Foxconn and Honda: Could This Be a New Alliance in EV Manufacturing?
• TSMC (2330.TT; TSM.US): Will TSMC Work on Intel Foundry Services? There Are Three Paradoxes… 

6. Intel Former Board Members Warn Against Rumoured TSMC Takeover Of Intel Foundry

By William Keating, Ingenuity

• Four former, long term Intel board members yesterday warned against any plans to have TSMC take over Intel Foundry, their second time weighing in on the future of the company
• They posit that TSMC is under pressure from the US Administration with Taiwan security being used as a bargaining chip
• They’re not wrong in their assertions that it would be a terrible idea, both for the US and for TSMC, but these are days where anything can happen. Let’s see

7. Memory Monitor: Nanya Tech Soared on DRAM Recovery and Custom HBM News

By Vincent Fernando, CFA, Zero One

• Nanya Tech Soared in February on DRAM Recovery and Custom HBM News
• Nanya’s Custom HBM Strategy & the Positive DRAM Market Outlook
• Memory Monitor Universe: SK Hynix & Micron Still Have Strong FY2025E Expected Growth; Nanya Tech Still Negative

8. ChipMOS Results Shows Signs of a Shifting Semiconductor Market; Precarious Multiples: Underperform

By Vincent Fernando, CFA, Zero One

• ChipMOS Revenue Growth for the 2024, but a Weak Fourth Quarter; Gross Margin Hammered
• ChipMOS Sees Relative Weakness in Displays, Smartphones / Areas of Strength: Automotive and OLED
• Underperform Rating — Falling Utilization and Conservative Capex Signal OSAT Industry Challenges

9. What Do Detailed 2024 Semi Stats Tell Us?

By Jim Handy, Objective Analysis

• Despite the chip market’s 19% overall 2024 Y/Y increase, the only real growth was in semiconductors for AI applications.  A turn in the AI business could cause a collapse.
• Outside of AI, growth was significantly more modest at 4.8%, which is good compared to the industry’s historical growth rate of 3.9%, but is nowhere near the 19% overall number.
• The US’ trade sanctions appear to be having some impact on chip shipments to China vs. the Americas, but this may be an illusion.

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

By Patrick Liao

• 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.

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.