Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>3Q22E earnings came in mostly ahead of expectations, however, if one looks at margin and inventory performance, the latest earnings season doesn't look so good.</li>
<li>Semiconductor margins fell and inventory days rose multi-year highs, Hardware margins fell further and inventory days look worse than ever.</li>
<li>Conclusion: 4Q22E end-demand could disappoint significantly and then companies will be slashing prices/writing off inventory into 1Q23E.</li>
</ul>


3Q22E earnings came in mostly ahead of expectations, however, if one looks at margin and inventory performance, the latest earnings season doesn't look so good.
Semiconductor margins fell and inventory days rose multi-year highs, Hardware margins fell further and inventory days look worse than ever.
Conclusion: 4Q22E end-demand could disappoint significantly and then companies will be slashing prices/writing off inventory into 1Q23E.


Taiwan Tech 3Q22 Earnings Season Ex-Post: Signs of Major Margin Pain Ahead

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Unprecedented protests have emerged in China; Hon Hai is offering an $1,800 bonus per month to keep workers on site.</li>
<li>Taiwan memory chip makers are slashing production in response to end-demand weakness, Nanya Tech looks at risk of a pullback.</li>
<li>TSMC to build its most advanced fab yet, a 1-nanometer class facility, in Taoyuan. The price tag? $32bn.</li>
</ul>


Unprecedented protests have emerged in China; Hon Hai is offering an $1,800 bonus per month to keep workers on site.
Taiwan memory chip makers are slashing production in response to end-demand weakness, Nanya Tech looks at risk of a pullback.
TSMC to build its most advanced fab yet, a 1-nanometer class facility, in Taoyuan. The price tag? $32bn.


Taiwan Tech Weekly: Unprecedented China Protests, Memory Slump, TSMC Keeping Taiwan Fabs Ahead of US

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Taiwan Semiconductor (TSMC) - ADR / Technical Analysis

<ul>
<li>TSMC US ADR (TSM) squeeze higher still has a dip and rally sequence to work into a top. USD low due in December and will form a top near 87/88.</li>
<li>We are keen to buy a pullback for a minor new high but the bigger trade is to short near the 88/90 resistance.</li>
<li>Global cycle peak and USD bottoming in December is a key input. TSMC's macro trend remains down.</li>
</ul>


TSMC US ADR (TSM) squeeze higher still has a dip and rally sequence to work into a top. USD low due in December and will form a top near 87/88.
We are keen to buy a pullback for a minor new high but the bigger trade is to short near the 88/90 resistance.
Global cycle peak and USD bottoming in December is a key input. TSMC's macro trend remains down.


Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  </li>
<li>The three companies are <a href="https://www.smartkarma.com/entities/johnson-johnson-831a1ab9-b291-4564-99b0-dc7f8d2b8175" target="_blank" data-smartkarma-citation="entities:26818:1" rel="noopener">Johnson &amp; Johnson (JNJ UN)</a> , <a href="https://www.smartkarma.com/entities/mondelez-international-inc" target="_blank" data-smartkarma-citation="entities:8111:1" rel="noopener">Mondelez International (MDLZ US)</a> and <a href="https://www.smartkarma.com/entities/qorvo-inc" target="_blank" data-smartkarma-citation="entities:11965:1" rel="noopener">Qorvo Inc (QRVO US), which have the highest weighting in each portfolio</a>
</li>
<li>For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  </li>
</ul>


We write about one stock each from the large, mid and small cap portfolios, briefly giving the reasons behind their the innovation scores and inclusion in the portfolio.  
The three companies are Johnson &amp; Johnson (JNJ UN) , Mondelez International (MDLZ US) and Qorvo Inc (QRVO US), which have the highest weighting in each portfolio

For the week the large cap portfolio was up 1.2%, the midcap was up 1.4% and the small cap was up 0.9%, all in US$ terms.  


How the Portfolios Did for the First Week

Senior Equity Derivatives Trader

Simon Harris

Event-Driven

Taiwan Semiconductor (TSMC) - ADR / Event-Driven

<ul>
<li>Stock has suffered this year (-47% YTD) with rising geopolitcal tensions and slowing global economy</li>
<li>Berkshire Hathaway is betting on a recovery in the stock with their $4.1bn stake</li>
<li>We look at the options market to identify some trades</li>
</ul>


Stock has suffered this year (-47% YTD) with rising geopolitcal tensions and slowing global economy
Berkshire Hathaway is betting on a recovery in the stock with their $4.1bn stake
We look at the options market to identify some trades


EQD | TSMC (TSM US): Buffet Is Betting on Long Term Upside - We Look at the Options Market for Ideas

Taiwan

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

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Taiwan Semiconductor (TSMC) (2330 TT)

Taiwan Tech 3Q22 Earnings Season Ex-Post: Signs of Major Margin Pain Ahead

If we examine the industry's latest gross margin and inventory performance, the latest quarterly results don't look so good.

Vincent Fernando, CFA

Taiwan Tech Weekly: Unprecedented China Protests, Memory Slump, TSMC Keeping Taiwan Fabs Ahead of US

Taiwan memory chip makers are slashing production in response to end-demand weakness, Nanya Tech looks at risk of a pullback.

Vincent Fernando, CFA

TSM Finessing a Top

TSMC US ADR (TSM) squeeze higher still has a dip and rally sequence to work into a top. USD low due in December and will form a top near 87/88.

Thomas Schroeder

How the Portfolios Did for the First Week

We assess how the three portfolios did for the first week and discuss about one stock each from the large, mid and small cap portfolios, briefly...

Pyari Menon

EQD | TSMC (TSM US): Buffet Is Betting on Long Term Upside - We Look at the Options Market for Ideas

A look at TSMC (TSM US) and the recent Berkshire Hathaway announcement. We look at the derivatives market to identify 3 potential trades.

Simon Harris

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