Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>The supply chain received good news that <a href="https://www.smartkarma.com/entities/novatek-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:10904:1" rel="noopener">Novatek Microelectronics Corp (3034 TT)</a> as successfully passed iPhone 16 OLED DRIVER IC (DDIC) qualification.</li>
<li>Novatek's recent alliance with ARM to develop Neoverse V2 is a noteworthy development.</li>
<li>Novatek's 1Q24F forecast remains unchanged, but the outlook for 2024F is likely to show positive growth.</li>
</ul>


The supply chain received good news that Novatek Microelectronics Corp (3034 TT) as successfully passed iPhone 16 OLED DRIVER IC (DDIC) qualification.
Novatek's recent alliance with ARM to develop Neoverse V2 is a noteworthy development.
Novatek's 1Q24F forecast remains unchanged, but the outlook for 2024F is likely to show positive growth.


Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

<ul>
<li>The sales of Jan 2024F were the lowest during 2022-2024F, indicating a likely downtrend for 1Q24F.</li>
<li>Demand is expected to remain sluggish in 2Q24F, potentially resulting in decreased raw wafer demand for Logic and Memory in 2Q24F.</li>
<li>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.</li>
</ul>


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.


Globalwafers (6488.TT): The Revenue Is Expected to Improve in 2H24F

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.</li>
<li>
<strong>Why the worst among all?</strong> We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.</li>
<li>
<strong>Priced in?</strong> We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.</li>
</ul>


Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip's 19% miss in 1Q24 gives no surprise.

Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.

Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg's -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.


From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

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

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>UMC delivered full-year net income roughly in line with consensus forecasts, though reported a capacity utilization drop sequentially.</li>
<li>Capacity utilization fell during the latest quarter despite strength from UMC's 22nm &amp; 28nm offerings due to older capacity weighing down performance.</li>
<li>UMC's latest US$3.3bn capex budget contrasted with the rising cost of advanced fabs shows how Intel's Foundry business will be increasingly needed by the industry.</li>
</ul>


UMC delivered full-year net income roughly in line with consensus forecasts, though reported a capacity utilization drop sequentially.
Capacity utilization fell during the latest quarter despite strength from UMC's 22nm &amp; 28nm offerings due to older capacity weighing down performance.
UMC's latest US$3.3bn capex budget contrasted with the rising cost of advanced fabs shows how Intel's Foundry business will be increasingly needed by the industry.


UMC's Results Show How Intel's New Foundry Business Is Poised to Become More Valuable

<ul>
<li>MediaTek expects a reduced DOI level in 2024F while maintaining operating expenses and pricing discipline in 2023.</li>
<li>The upgrade cycle has begun for devices equipped with AI functions. The Dimensity 9300 is just the first edge AI product for smartphones. </li>
<li>MediaTek does not predict a significant increase in demand and expects a steady demand for smartphones. </li>
</ul>


MediaTek expects a reduced DOI level in 2024F while maintaining operating expenses and pricing discipline in 2023.
The upgrade cycle has begun for devices equipped with AI functions. The Dimensity 9300 is just the first edge AI product for smartphones. 
MediaTek does not predict a significant increase in demand and expects a steady demand for smartphones. 


MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

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)

Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Patrick Liao

Globalwafers (6488.TT): The Revenue Is Expected to Improve in 2H24F

Sales of Jan 2024F hit a low, signaling a potential downtrend for 1Q24F. Demand in 2Q24F may decrease raw wafer demand for Logic and Memory. 12"...

Patrick Liao

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

UMC's Results Show How Intel's New Foundry Business Is Poised to Become More Valuable

UMC's net income met expectations, but capacity utilization fell due to older capacity. UMC's capex budget shows the challenges in keeping pace...

Vincent Fernando, CFA

MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...

Patrick Liao

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Novatek (3034.TT): It Had Been Qualified by the IPhone 16 for OLED Driver IC.

​Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Patrick Liao

Globalwafers (6488.TT): The Revenue Is Expected to Improve in 2H24F

​Sales of Jan 2024F hit a low, signaling a potential downtrend for 1Q24F. Demand in 2Q24F may decrease raw wafer demand for Logic and Memory. 12"...

Patrick Liao

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All?

From the Bellwether to a Lagging Indicator- Why Does Microchip Guide the Worst Among All? For next six months, we like both Intel and Qualcomm more...

Andrew Lu

UMC's Results Show How Intel's New Foundry Business Is Poised to Become More Valuable

​UMC's net income met expectations, but capacity utilization fell due to older capacity. UMC's capex budget shows the challenges in keeping pace...

Vincent Fernando, CFA

MediaTek (2454.TT): 2024F Indicating a Complete Recovery from the Previous Downturn Situation.

​MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...

Patrick Liao

Novatek's successful qualification for iPhone 16 OLED DDIC and partnership with ARM for Neoverse V2 development signal positive growth in 2024.

Sales of Jan 2024F hit a low, signaling a potential downtrend for 1Q24F. Demand in 2Q24F may decrease raw wafer demand for Logic and Memory. 12"...

UMC's net income met expectations, but capacity utilization fell due to older capacity. UMC's capex budget shows the challenges in keeping pace...

MediaTek anticipates lower DOI in 2024 but maintains pricing discipline and operating expenses. The D9300 marks the start of the AI upgrade cycle...