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. From Nvidia Results to See Supply Chain Stories?
- Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
- TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
- We attribute Nvidia customers’ sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.
2. TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.
- Usually, February is typically the month with the fewest working days of the year, and therefore, revenue is likely to be at its lowest as well.
- We consider that the Taiwanese government may desire TSMC to build fabs in countries aligned with those who signed the “Wassenaar Arrangement.”
- The price hike of NVIDIA Corp (NVDA US) by US$785.38 on February 22 in the US market could signal an important development in the AI sector.
3. United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel
- UMC spoke at an investment bank’s recent conference, providing additional color on guidance and its collaboration with Intel for 12nm chip production.
- UMC comments imply the key synergies between the two companies, whereby each can solve the other’s key problem,
- While UMC most likely needs to remain a “Taiwanese company” in terms of optics given its history, Intel’s synergies with UMC establishes acquisition-value support for UMC shares in our view.
4. AMAT. Post Earnings Surge For No Good Reason
- Q124 revenues of $6.71 billion, at the high end of the guided range and essentially flat sequentially both QoQ and YoY
- Q224 revenue $6.5 billion at the midpoint, a modest downward movement of 3% QoQ and in line with what we saw from peers KLAC and LRCX
- Still a great company with excellent growth prospects, just not in 2024
5. SUMCO’s Sobering Outlook For Silicon Wafers
- Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
- Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
- On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027
6. Intel Snags Altman To Close Foundry Day Event
- Despite the high-profile announcement of his attendance, his segment was less than 3 minutes long!
- Intel’s CEO alluded to a partnership with OpenAI and implied there’s more to come yet there’s been no public announcement of any such partnership.
- Microsoft’s commitment to use Intel’s 18A is a vote of confidence in their foundry offering. Let’s see how it plays out.
7. Finding the Sweet Spot: Nvidia’s Goldilocks Quarter
- Nvidia’s earnings are akin to my Super Bowl.
- There is no more significant event in semiconductors and AI, and each quarter, we tune into Nvidia’s results to see precisely what quarter we are in the AI hype cycle (and potentially bubble).
- There is no better signpost for the entire AI ecosystem than the company making the most of the revenue so far: Nvidia.
8. Novatek (3034.TT): It’s Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.
- Novatek’s share price has surged by more than 15% in four days due to the news of Novatek’s alliance with ARM to develop Neoverse V2.
- While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.
- Novatek is set to leverage Intel Corp (INTC US)’s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.
9. Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek
- Key Events: 1) Nvidia Results Coming Today in the U.S. 2) Elan & ChipMOS Tomorrow in Taiwan 3) U.S. PC Maker Results Next Week
- Why United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel
- Novatek a Top Gainer After Reports of Alliance with ARM to Build Neoverse V2 for AI
10. Globalwafers (6488.TT): The Revenue Is Expected to Improve in 2H24F
- The sales of Jan 2024F were the lowest during 2022-2024F, indicating a likely downtrend for 1Q24F.
- Demand is expected to remain sluggish in 2Q24F, potentially resulting in decreased raw wafer demand for Logic and Memory in 2Q24F.
- The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.
