Tech Hardware and Semiconductor

Weekly Top Ten Tech Hardware and Semiconductor – Jan 21, 2024

By January 21, 2024 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. What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors

By Andrew Lu

  • TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.
  • Faster ramp on N3, likely N3E, N3P than competitor’s. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024.
  • TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12″ mature technology despite better demand 8″ specialty technology.

2. TSMC Results Make Buy Story Even More Clear; Strong 2024E Guidance & Reiterates Multi-Year Growth

By Vincent Fernando, CFA, Zero One

  • TSMC reported 4Q23 results at the upper end of its guidance. More importantly, the company guided for low/mid 20% 2024E sales growth and reiterated an expected 15-20% multi-year CAGR.
  • The company provided optimistic guidance for the overall semiconductor industry, forecasting 10% growth in 2024E. TSMC expects to grow much faster than the industry, however.
  • TSMC is one of our Structural Longs; our NT$760 target implies 29% upside. The latest results make TSMC’s Buy case even more clear, in our view.

3. TSMC. Roaring Into Year Of The Dragon

By William Keating, Ingenuity

  • Q423 revenues of $19.62 billion, at the high end of guidance, up 13.8% QoQ and down 1.5% YoY. Net profit margin of 38.2% results in net income of ~$7.5 billion.
  • FY23 revenues of $69.3 billion, down 8.7% YoY, only the second such down year since 2005
  • Bullish FY24 forecast for >20% YoY growth sends share price soaring in overnight trading. 

4. Taiwan Tech Weekly: TSMC Results; AI PC Market Site Visit; Alchip GDR Offering

By Vincent Fernando, CFA, Zero One

  • TSMC Results Tomorrow, Interest Will Be Elevated After Taiwan’s Election Result
  • AI PC Availability Tight in Taipei? We Visited Taipei’s Guanghua Consumer Electronics Market Over the Weekend
  • Alchip Technologies GDR Offering – Has Been Riding on an Unwavering Momentum Over the Past Year 

5. AI Industry Structure and Business Model: What Inning is It?

By Douglas O’Laughlin, Fabricated Knowledge

  • What inning is AI in?
  • If history is a guide, it’s hard to predict the twists and turns of a new market growing from nothing.
  • Here’s my humble attempt at estimating AI penetration and my thoughts on the run-rate business of AI models and industry structure.

6. GlobalWafers (6488.TT): 1Q24F Outlook Could Be a Bit Downside, but 2Q24F Could Be Picking Upward.

By Patrick Liao

  • The Globalwafers (6488 TT) outlook for 1Q24F is likely to show a slightly negative QoQ revenue trend. However, we anticipate a positive direction from 2Q24F onwards.  
  • We have a relatively high conviction for 2024F compared to 2023, indicating upside potential for the Memory and Logic sectors.
  • The supply of 12″ raw wafers remains constrained among the top market players, and overcoming this constraint won’t be easy.  

7. Taiwan Dual-Listings Monitor: TSMC ADRs Outpace Local, Extreme Spread; ChipMOS Good Long Level

By Vincent Fernando, CFA, Zero One

  • TSMC: Stock Prices Soared After Reporting Earnings, But ADR Rose Higher… Now +12.4% Premium, Shortable Level
  • ASE: ADR Spread Has Rebounded Substantially, Now +8.6%. Not Yet at Short Levels.
  • ChipMOS: ADR Spread Drops to -2.2%, Good Level to Go Long.

8. TSMC (2330.TT; TSM.US): Expect Utilization Rate to Rise with Business Recovery.

By Patrick Liao

  • The revenue/ GM/ OPM/ EPS is USD$19.62bn/ 53%/ 41.6%/ NT$9.21 in 4Q23. The revenue/ GMO/ OPM is US$18-18.8bn/ 52-54%/ 40-42% in 1Q24F guidance.
  • TSMC’s sales for 2024F are expected to grow in the low to mid-twenties YoY.
  • 2024F is expected to be a relatively healthy year for the high-performance computing (HPC) and artificial intelligence (AI) sectors, with robust demand.

9. Novatek (3034.TT): Reserved IPhone 16 DDIC for 3Q24F Shipment; 1Q24F Outlook Bright.

By Patrick Liao

  • Novatek Microelectronics Corp (3034 TT) had reserved Apple (AAPL US) iPhone 16 Display Driver IC (DDIC) for future shipment since 3Q24F when qualification past.
  • Novatek’s outlook is increasing to about 1~5% in 1Q24F, remarked a higher quarter demand than 4Q23.
  • It could be a low season in 2Q24F because the rush order shown up around Chinese New Year.  

10. 2023 PC Unit Shipments Disappoint While Smartphone Fared Better Than Expected

By William Keating, Ingenuity

  • For 2023, Smartphone unit shipments amounted to 1.17 billion units,  a 3.2% YoY decline, far better than we expected at the beginning of last year.
  • For 2023, PC unit shipments amounted to 241.8 million units, a 14.8% YoY decline, worse than expected. Last time annual shipments fell below 250 million units was in 2006.
  • The weaker than anticipated PC TAM is a headwind for Intel heading into earnings and Q124 guidance on January 25