Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<h2>Summary</h2><ul>
<li><p><em><strong>No longer a sharp price hike in 2H17</strong>: We estimate memory contract price increase of 4-6% q/q in 3Q17 and attribute the stronger DRAM contract price to more solid graphic and CPU demand for gaming, PC, and cloud data center but more supply increase to affect NAND flash contract. </em></p></li>
<li><p><em><strong>A Moderate Price Decline in 1H18 likely but investors might return: </strong>After five quarters of strong memory price rebound on q/q and y/y basis by over 100%, we believe the memory price hike is not sustainable into</em>…</p></li>
</ul>

Summary
No longer a sharp price hike in 2H17: We estimate memory contract price increase of 4-6% q/q in 3Q17 and attribute the stronger DRAM contract price to more solid graphic and CPU demand for gaming, PC, and cloud data center but more supply increase to affect NAND flash contract. 
A Moderate Price Decline in 1H18 likely but investors might return: After five quarters of strong memory price rebound on q/q and y/y basis by over 100%, we believe the memory price hike is not sustainable into…


Memory: No Longer a Sharp Price Hike in 2H17 and Investors Might Return in 1H18

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>A review of Vermilion's Sector Rankings (RSR) reveals Cap-weighted Groups, as a whole, ranking better<br>than average-weighted (or equal-weighted), reflecting the S&amp;P 500's outperformance relative to the Russell 2000.  We share comments on a number of sectors and highlight bottoms-up ideas in the semiconductor and software space.</p>

A review of Vermilion's Sector Rankings (RSR) reveals Cap-weighted Groups, as a whole, ranking better than average-weighted (or equal-weighted), reflecting the S&amp;P 500's outperformance relative to the Russell 2000.  We share comments on a number of sectors and highlight bottoms-up ideas in the semiconductor and software space.

<h2>Summary</h2><ul>
<li>
<strong>Solid 2H17</strong>: We expect 2Q beat and good 2H17 guidance to drive analysts to revise up their numbers on Intel. However, we remain our cautious view on rising client computing and data center CPU competition from AMD and ARM vendor like <a href="https://www.smartkarma.com/entities/969" target="_blank" data-smartkarma-citation="entities:969:1">Qualcomm Inc (QCOM US)</a>, AI/autonomous drive training/inference competition from <a href="https://www.smartkarma.com/entities/5891" target="_blank" data-smartkarma-citation="entities:5891:1">Nvidia Corp (NVDA US)</a> and <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a> TPU.</li>
<li>
<strong>Stronger in the cloud but weakness in enterprise data center demand</strong>: Intel comments stronger public cloud growth in 2Q17…</li>
</ul>

Summary

Solid 2H17: We expect 2Q beat and good 2H17 guidance to drive analysts to revise up their numbers on Intel. However, we remain our cautious view on rising client computing and data center CPU competition from AMD and ARM vendor like Qualcomm Inc (QCOM US), AI/autonomous drive training/inference competition from Nvidia Corp (NVDA US) and Alphabet Inc Cl C (GOOG US) TPU.

Stronger in the cloud but weakness in enterprise data center demand: Intel comments stronger public cloud growth in 2Q17…


Intel Sees Solid 2H17; Implications to Cloud/ Memory Demand and Competitions

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Event-Driven

<p>Would <a href="https://www.smartkarma.com/entities/16955" target="_blank" data-smartkarma-citation="entities:16955:1">SK Hynix Inc (000660 KS)</a> give up voting stakes? According to the most recent article from Korea, SK Hynix is reaffirming that it will not give up voting stakes (this is the latest news article about Hynix not giving up Toshiba voting stakes <a href="http://www.sisacast.kr/news/articleView.html?idxno=15941" target="_blank">http://www.sisacast.kr/news/articleView.html?idxno=15941</a>). In this insight, I discussed why SK Hynix needs to be so obsessed with Toshiba memory unit and it will not easily give up voting stakes. I didn't write this piece to make investment recommendations. I strictly focused on Hynix's situation with 3D V-NAND.</p>

Would SK Hynix Inc (000660 KS) give up voting stakes? According to the most recent article from Korea, SK Hynix is reaffirming that it will not give up voting stakes (this is the latest news article about Hynix not giving up Toshiba voting stakes http://www.sisacast.kr/news/articleView.html?idxno=15941). In this insight, I discussed why SK Hynix needs to be so obsessed with Toshiba memory unit and it will not easily give up voting stakes. I didn't write this piece to make investment recommendations. I strictly focused on Hynix's situation with 3D V-NAND.

SK Hynix Says It Will Not Give up Toshiba Voting Stakes - Why Hynix So Obsessed with Toshiba?

<h2>What's new?</h2><p>Unigroup Guoxin (002049 CH, 紫光國芯), a Tsinghua Unigroup affiliate, announced to terminate the 100% or partial take over deal of Yangtze River Storage Technology (YRST) (vs. current investment of 51.04% by a holding company (湖北紫光國器科技) of Tsinghua Unigroup) announced earlier in April 2017.  Unigroup Guoxin attributes the termination to lack of sales from YRST in an early construction period and conditions are premature.  </p><h2>Why did Unigroup Guoxin announce the take over in April?</h2><p>As we have…</p>

What's new?Unigroup Guoxin (002049 CH, 紫光國芯), a Tsinghua Unigroup affiliate, announced to terminate the 100% or partial take over deal of Yangtze River Storage Technology (YRST) (vs. current investment of 51.04% by a holding company (湖北紫光國器科技) of Tsinghua Unigroup) announced earlier in April 2017.  Unigroup Guoxin attributes the termination to lack of sales from YRST in an early construction period and conditions are premature.  Why did Unigroup Guoxin announce the take over in April?As we have…

Tsinghua Unigroup/Unigroup Guoxin Scrapped YRST Take over Deal

United States

Micron Technology, Inc., through its subsidiaries, manufactures and markets dynamic random access memory chips (DRAMs), very fast static random access memory chips (SRAMs), Flash Memory, other semiconductor components, and memory modules.

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Micron Technology (MU US)

Memory: No Longer a Sharp Price Hike in 2H17 and Investors Might Return in 1H18

Summary No longer a sharp price hike in 2H17: We estimate memory contract price increase of 4-6% q/q in 3Q17 and attribute the stronger DRAM...

Andrew Lu

U.S. Equity Sector Rankings

A review of Vermilion's Sector Rankings (RSR) reveals Cap-weighted Groups, as a whole, ranking betterthan average-weighted (or equal-weighted),...

Vermilion Research

Intel Sees Solid 2H17; Implications to Cloud/ Memory Demand and Competitions

Summary Solid 2H17: We expect 2Q beat and good 2H17 guidance to drive analysts to revise up their numbers on Intel. However, we remain our...

Andrew Lu

SK Hynix Says It Will Not Give up Toshiba Voting Stakes - Why Hynix So Obsessed with Toshiba?

Would SK Hynix Inc (000660 KS) give up voting stakes? According to the most recent article from Korea, SK Hynix is reaffirming that it will not...

Sanghyun Park

Tsinghua Unigroup/Unigroup Guoxin Scrapped YRST Take over Deal

What's new?Unigroup Guoxin (002049 CH, 紫光國芯), a Tsinghua Unigroup affiliate, announced to terminate the 100% or partial take over deal of Yangtze...

Andrew Lu

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