Tech Hardware and Semiconductor

Weekly Top Ten Tech Hardware and Semiconductor – Jan 19, 2025

By January 19, 2025 No Comments
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 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