Daily Brief TMT/Internet: Microstrategy Inc Cl A, Taiwan Semiconductor (TSMC) – ADR, Pine Labs, Softbank Group, Intel Corp, Spectris PLC, Taiwan Semiconductor (TSMC), Shanghai Sunmi Technology Co., Ltd., Aussie Broadband, Capillary Technologies India Ltd (CTIL) and more

• Jim Chanos discusses Bitcoin treasury companies and their flaws on Bloomberg Audio Studios Podcasts Radio News
• Companies are continuing to adopt the strategy of using treasury to buy Bitcoin
• The value of companies like MicroStrategy is being inflated by the appreciation of their Bitcoin holdings

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• Taiwan Semiconductor (TSMC) – ADR (TSM US) is planning to scale back its presence in the gallium nitride (GaN) market to focus on high-growth areas.
• To meet customer demand, Taiwan Semiconductor (TSMC) – ADR (TSM US) has recently been reallocating resources away from mature process nodes.
• We estimate that Navitas Semiconductor Corp (NVTS US) alone consumes over half of TSMC’s GaN capacity each month, making it TSMC’s largest GaN customer.

• Pine Labs (0568874D IN) is looking to raise up to US$1bn in its upcoming India IPO. The deal will be run by Axis, Citi, MS, JPM and Jefferies.
• Pine Labs (PL) is a fintech firm focused on digitizing commerce through digital payments and issuing solutions for merchants, consumer brands and enterprises, and financial institutions.
• According to a Redseer Report, PL was the largest player in issuances of closed and semi-closed loop gift cards by transaction value in India in FY24.

• SoftBank group (SBG) relies increasingly on Arm’s premium valuation for NAV growth, with SBG shares having benefited from their high correlation to those of Arm Holdings
• JPY-USD FX strengthened recently, with the potential for BoJ monetary tightening and Fed easing set to accentuate this trend; SBG is USD asset heavy, and JPY heavy in its liabilities
• The Vision Funds are slowly seeing IPO exits for private companies; in essence, we see that SBG shares are challenged by (geo)political, concentration, currency and market risks

• Even if Intel Corp (INTC US) ceases marketing 18A to new customers, the company will still fulfill existing foundry commitments.
• In response to the 18A dilemma, Intel’s initial solution is to redirect resources toward the development of 14A, a next-generation process where Intel hopes to gain an edge over TSMC.
• In addition to the strategic realignment of the foundry business, Tan’s broader efforts include refreshing Intel’s leadership team.

• KKR’s £40/share offer is now board-recommended, displacing Advent’s prior bid; Spectris shares trade near offer price with minimal spread.
• With full board support and limited regulatory risk, the market implies >99% deal certainty.
• Advent must act swiftly or concede defeat; further bidding appears unlikely but not impossible.

• Tax credit increase from 25% to 35% (portion of investment deducted from taxable income), which becomes as impactful in $ as the direct subsidies or about $40bn. 
• The US is working hard to make Semi investments more attractive. Subsidies, loans and tax credits altogether now approach $150bn. 
• That could mitigate a little bit of TSMC price increase in Arizona. But it’s not massive. The impact of tax credits increase from 2% of revenue to 3%. 

• Shanghai Sunmi Technology Co., Ltd. (SSTC) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by DB, Citic, and ABCI.
• SSTC is the largest Android-based BIoT solution provider in the world in terms of revenue in 2024, with a market share of over 10%, according to CIC.
• The company mainly relies on offline channels as over 99% of total revenue was generated from offline channels over the Track Record Period.

• Extra Edition of the Broker Call Report

• Capillary Technologies India Ltd (CTIL) (0611334D IN)  is looking to raise about US$240m in its upcoming India IPO. The bookrunners for the deal are JM Fin, IIFL, Nomura.
• CTIL provides AI-based, cloud-native SaaS products and solutions, primarily serving enterprise customers generating over ₹8 million in annual revenue from operations.
• As per the Zinnov Report, CTIL was the global leader in loyalty and engagement management by product count in FY25, and among few offering end-to-end loyalty solutions.