Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>Expected sequential revenue growth of 13% to 15%, gross margin expected between 18% and 20%.</li>
<li>The company has not increased capacity utilization through price cuts but supports customers in facing competition to maintain market share.</li>
<li>Inventory replenishment behavior will end in the third quarter, and fourth-quarter orders will more accurately reflect actual demand rather than the impact of restocking.</li>
</ul>


Expected sequential revenue growth of 13% to 15%, gross margin expected between 18% and 20%.
The company has not increased capacity utilization through price cuts but supports customers in facing competition to maintain market share.
Inventory replenishment behavior will end in the third quarter, and fourth-quarter orders will more accurately reflect actual demand rather than the impact of restocking.


SMIC (981.HK): Revenue and GM Continued to Trend Up in 3Q24

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Semiconductor Manufacturing International Corp (SMIC) / Event-Driven

<ul>
<li><em>The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.</em></li>
<li>SOUTHBOUND inflow strong but SOEs not leading and Hang Seng down hard. Bank buying minimal. NORTHBOUND saw significant selling, but A-share indices generally strong on the week. Window-dressing?</li>
<li>AH Premia rose 3.3% on average. Really bad week for H vs A as Liquid Hs underperformed their As by 4%. Stunning week really. Relative performance a sea of red.</li>
</ul>


The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND inflow strong but SOEs not leading and Hang Seng down hard. Bank buying minimal. NORTHBOUND saw significant selling, but A-share indices generally strong on the week. Window-dressing?
AH Premia rose 3.3% on average. Really bad week for H vs A as Liquid Hs underperformed their As by 4%. Stunning week really. Relative performance a sea of red.


A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>Both SMIC &amp; Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.</li>
<li>The downturn has exposed inherent weakness in China's Semi Foundry segment relative to peers as exemplified by the significant GM disparity</li>
<li>China's two leading semi foundries have ~80% domestic dependence. Right now, that's a headwind</li>
</ul>


Both SMIC &amp; Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
The downturn has exposed inherent weakness in China's Semi Foundry segment relative to peers as exemplified by the significant GM disparity
China's two leading semi foundries have ~80% domestic dependence. Right now, that's a headwind


China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

<ul>
<li>It's an exciting 1Q24 result that revenue and GM beat the prior guidance.</li>
<li>The 2Q24 outlook appears to be better than 1Q24, with revenue expected to increase by 5% to 7% QoQ and GM by 9% to 11%.</li>
<li>We consider the primary bottleneck is the embargo of EUV machines to China from the Netherlands.</li>
</ul>


It's an exciting 1Q24 result that revenue and GM beat the prior guidance.
The 2Q24 outlook appears to be better than 1Q24, with revenue expected to increase by 5% to 7% QoQ and GM by 9% to 11%.
We consider the primary bottleneck is the embargo of EUV machines to China from the Netherlands.


SMIC (981.HK): 1Q24 Outlook Was Improved, and The 2Q24 Outlook Appears to Be Better than 1Q24.

Asia and Global Semiconductor and Tech Research

Andrew Lu

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.</li>
<li>
<strong>No more Moore's Law</strong>: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.</li>
<li>Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.</li>
</ul>


TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.

No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

China

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

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Semiconductor Manufacturing International Corp (SMIC) (981 HK)

SMIC (981.HK): Revenue and GM Continued to Trend Up in 3Q24

Company expects solid revenue growth and stable gross margins, focusing on supporting customers and anticipating more accurate demand in upcoming...

Patrick Liao

A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

As HK stocks got crushed during the week and A-shares did well, and SOUTHBOUND did not seem to buy the banks or SOEs, AH Premia jumped. The carry...

Travis Lundy

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

SMIC & Hua Hong reported in line Q423 & both guided Q124 flat to slightly down. SMIC calls FY24 growth ~+5% YoY. Fierce competition, GM pressure,...

William Keating

SMIC (981.HK): 1Q24 Outlook Was Improved, and The 2Q24 Outlook Appears to Be Better than 1Q24.

Exciting 1Q24 results show revenue and GM surpassing guidance, with optimistic 2Q24 outlook despite EUV machine embargo impacting China.

Patrick Liao

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SMIC (981.HK): Revenue and GM Continued to Trend Up in 3Q24

​Company expects solid revenue growth and stable gross margins, focusing on supporting customers and anticipating more accurate demand in upcoming...

Patrick Liao

A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

As HK stocks got crushed during the week and A-shares did well, and SOUTHBOUND did not seem to buy the banks or SOEs, AH Premia jumped. The carry...

Travis Lundy

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

SMIC & Hua Hong reported in line Q423 & both guided Q124 flat to slightly down. SMIC calls FY24 growth ~+5% YoY. Fierce competition, GM pressure,...

William Keating

SMIC (981.HK): 1Q24 Outlook Was Improved, and The 2Q24 Outlook Appears to Be Better than 1Q24.

​Exciting 1Q24 results show revenue and GM surpassing guidance, with optimistic 2Q24 outlook despite EUV machine embargo impacting China.

Patrick Liao

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

Company expects solid revenue growth and stable gross margins, focusing on supporting customers and anticipating more accurate demand in upcoming...

Exciting 1Q24 results show revenue and GM surpassing guidance, with optimistic 2Q24 outlook despite EUV machine embargo impacting China.