Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<ul>
<li>Intel kicked off its Innovation conference and announced that its new PC processors with built-in AI coprocessors would launch December 14th. This is positive for the PC supply chain.</li>
<li>Many types of existing software that used to require expert users can become more valuable with AI capabilities; we believe tomorrow's AI PC killer apps could be in plain sight.</li>
<li>Himax Long vs. Novatek Short. Himax is at historically very cheap level relative to Novatek, yet both are exposed to similar display end-markets.</li>
</ul>


Intel kicked off its Innovation conference and announced that its new PC processors with built-in AI coprocessors would launch December 14th. This is positive for the PC supply chain.
Many types of existing software that used to require expert users can become more valuable with AI capabilities; we believe tomorrow's AI PC killer apps could be in plain sight.
Himax Long vs. Novatek Short. Himax is at historically very cheap level relative to Novatek, yet both are exposed to similar display end-markets.


Taiwan Tech Weekly: Intel 'AI PC' Chips On Track to Drive 2024E PC Supply Chain

<ul>
<li>TSMC's ADR premium/discount appears to have shown a clear decline in trading range recently, down from the 10% level.</li>
<li>UMC &amp; ASE joined corporate days today in Taipei, which could be supportive of their premiums in the near-term.</li>
<li>We provide spread levels we view as compelling from a risk/reward perspective.</li>
</ul>


TSMC's ADR premium/discount appears to have shown a clear decline in trading range recently, down from the 10% level.
UMC &amp; ASE joined corporate days today in Taipei, which could be supportive of their premiums in the near-term.
We provide spread levels we view as compelling from a risk/reward perspective.


Taiwan Dual Listings Monitor: TSMC Spread In Clear Downtrend; UMC & ASE Corporate Days Could Support

Taiwan Tech Focused Senior Analyst

Patrick Liao

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>We foresee a potentially higher rebound in the near future, resulting in higher growth rate in 2023F for TSMC.</li>
<li>Due to the ramping up of production for 3nm, the GM is expected to decrease by 2-3%. However, there is an policy to add up at least 2% for TSMC. </li>
<li>The CoWoS is still being closely watched because of NVDA’s demand, and it will take time to get TSMC ready to satisfy the likely demand for CoWoS.</li>
</ul>


We foresee a potentially higher rebound in the near future, resulting in higher growth rate in 2023F for TSMC.
Due to the ramping up of production for 3nm, the GM is expected to decrease by 2-3%. However, there is an policy to add up at least 2% for TSMC. 
The CoWoS is still being closely watched because of NVDA’s demand, and it will take time to get TSMC ready to satisfy the likely demand for CoWoS.


TSMC (2330.TT): A Bit Higher Rebound in 4Q23F

<ul>
<li>India Supply Chain Rising -- Hon Hai is helping Apple launch with India-made iPhone 15's on Day 1. These days, Apple likely wants to diversify away from China even faster.</li>
<li>ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel.</li>
<li>We downgrade Mediatek: After rally, beware of Huawei/SMIC chip capabilities causing market to realize Mediatek could lose market share.</li>
</ul>


India Supply Chain Rising -- Hon Hai is helping Apple launch with India-made iPhone 15's on Day 1. These days, Apple likely wants to diversify away from China even faster.
ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel.
We downgrade Mediatek: After rally, beware of Huawei/SMIC chip capabilities causing market to realize Mediatek could lose market share.


Taiwan Tech Weekly: Apple Accelerating to India; ARM IPO; Huawei Mediatek Market Risk; Intel AI PCs

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Taiwan Semiconductor (TSMC) - ADR / Event-Driven

<ul>
<li>The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 15 September. There are no constituent changes, but there are float and capping changes.</li>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor (SMH US)</a> ETF tracks the index and has an AUM of US$9.7bn.</li>
<li>Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.</li>
</ul>


The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 15 September. There are no constituent changes, but there are float and capping changes.
The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$9.7bn.
Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.


MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC

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 Weekly: Intel 'AI PC' Chips On Track to Drive 2024E PC Supply Chain

Many types of existing software that used to require expert users can become more valuable with AI capabilities; we believe tomorrow's AI PC killer...

Vincent Fernando, CFA

Taiwan Dual Listings Monitor: TSMC Spread In Clear Downtrend; UMC & ASE Corporate Days Could Support

UMC & ASE joined corporate days today, which could be supportive of their premiums in the near-term. We provide our view on spread ranges for Long...

Vincent Fernando, CFA

TSMC (2330.TT): A Bit Higher Rebound in 4Q23F

We foresee a potentially higher rebound in the near future, resulting in higher growth rate in 2023F for TSMC. The GM is expected to decrease by 2...

Patrick Liao

Taiwan Tech Weekly: Apple Accelerating to India; ARM IPO; Huawei Mediatek Market Risk; Intel AI PCs

ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel. Apple is likely accelerating plans to shift its supply chain...

Vincent Fernando, CFA

MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC

No constituent changes, but there are float/capping changes. Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. Stocks are...

Brian Freitas

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