This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Taiwan Tech Weekly: OpenAI Developing Alternative to Nvidia with TSMC; Hon Hai Guides Strong 1Q25E
- 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
- 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.
- 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
- 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?
- 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.
- 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.
- 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
- 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.
