Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

Following the appointment of Lisa Su as CEO in 2014, AMD has staged a stunning turnaround headlined by its Ryzen series of consumer-focused processors. Its recent announcement on Zen 3 cements this and raises questions for both Intel and Nividia as the (formerly?) dominant players in their respective markets. It also has implications for the Arm acquisition, which was on shaky ground already, and that is before even considering what a Xilinx acquisition could mean for the industry.

Following the appointment of Lisa Su as CEO in 2014, AMD has staged a stunning turnaround headlined by its Ryzen series of consumer-focused processors. Its recent announcement on Zen 3 cements this and raises questions for both Intel and Nividia as the (formerly?) dominant players in their respective markets. It also has implications for the Arm acquisition, which was on shaky ground already, and that is before even considering what a Xilinx acquisition could mean for the industry.

Softbank – How Does AMD’s Resurgence and Xilinx Deal Impact the Nvidia-Arm Deal?

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

Equity Bottom-Up

Advanced Micro Devices / Equity Bottom-Up

The Wall Street Journal last week <a href="https://www.wsj.com/articles/amd-is-in-advanced-talks-to-buy-xilinx-11602205553" target="_blank" rel="noopener">reported</a> that <a href="https://www.smartkarma.com/entities/advanced-micro-devices-inc" target="_blank" data-smartkarma-citation="entities:19009:1" rel="noopener">Advanced Micro Devices</a> is in advanced talks to buy <a href="https://www.smartkarma.com/entities/xilinx-inc" target="_blank" data-smartkarma-citation="entities:11600:1" rel="noopener">Xilinx</a> for a consideration of some $30 billion. It's a surprising move for the famously cautious and pragmatic CEO, Lisa Su. However, we think that the rumour is credible and, on balance, believe it to be a smart move on the part of AMD. Here's why.

The Wall Street Journal last week reported that Advanced Micro Devices is in advanced talks to buy Xilinx for a consideration of some $30 billion. It's a surprising move for the famously cautious and pragmatic CEO, Lisa Su. However, we think that the rumour is credible and, on balance, believe it to be a smart move on the part of AMD. Here's why. 

AMD. Making Sense Of The Proposed Xilinx Acquisition.

President

Thomas Coughlin

Coughlin Associates

Thematic (Sector/Industry)

NVIDIA leads in market share of GPUs with its data center GPU business now almost as big as its gaming PC business.  The company is introducing its BlueField-2 Data Processing Units (DPUs), based upon technology from its Mellanox acquisition, in combination with open source management software, to create demand for another important data center domain specific processor that could generate revenue matching or exceeding that from NVIDIA's GPUs.

NVIDIA leads in market share of GPUs with its data center GPU business now almost as big as its gaming PC business.  The company is introducing its BlueField-2 Data Processing Units (DPUs), based upon technology from its Mellanox acquisition, in combination with open source management software, to create demand for another important data center domain specific processor that could generate revenue matching or exceeding that from NVIDIA's GPUs.

NVIDIA to Increase Its Data Center Business with DPUs

The spread of the global pandemic has resulted in the strongest two consecutive quarters on record for server sales and led to <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel</a> beating its second quarter forecast by nearly one billion dollars. This strength in server has spilled over to the DRAM and NAND segments with both staging robust recoveries from the protracted down cycle experienced in 2019. That situation may be coming to an abrupt end however. A key leading indicator suggests that server sales will fall sharply in the coming months. We also expect both DRAM and NAND prices to follow suit. Here's why.

The spread of the global pandemic has resulted in the strongest two consecutive quarters on record for server sales and led to Intel beating its second quarter forecast by nearly one billion dollars. This strength in server has spilled over to the DRAM and NAND segments with both staging robust recoveries from the protracted down cycle experienced in 2019. That situation may be coming to an abrupt end however. A key leading indicator suggests that server sales will fall sharply in the coming months. We also expect both DRAM and NAND prices to follow suit. Here's why.   

Server CPU, DRAM, NAND Sales Heading For A Significant Decline As Inventory Digestion Commences.

The much-anticipated acquisition by <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA</a> of <a href="https://www.smartkarma.com/entities/arm-holdings-plc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">Arm</a> from <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank</a> was formally <a href="https://nvidianews.nvidia.com/news/nvidia-to-acquire-arm-for-40-billion-creating-worlds-premier-computing-company-for-the-age-of-ai" target="_blank" rel="noopener">announced</a> on Monday. The transaction is valued at $40 billion, an approximately equal combination of cash and NVIDIA stock.On the surface the deal looks strategically solid from NVIDIA's perspective. It places the company at the center of Arm's one hundred and eighty billion connected device ecosystem. Perhaps even more importantly, it opens up the possibility of an outright assault on <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel's</a> data center dominance by adding Arm-based server processors to complement NVIDIA's existing lineup of GPUs and interconnect.Underneath the surface however, this deal is fraught with issues and risks. While Arm has been a very successful company, their growth is flatlining as smartphone sales stagnate. Furthermore, we see the rise of RISC-V as a very real threat to Arm's business model in the coming years. Arm has never competed with its customers. Under NVIDIA ownership, this will be virtually impossible to avoid.From a regulatory perspective, Arm IP moving under american ownership will raise the very real prospect that this technology will become a future weapon in the US-China trade and technology wars. In today's environment, it's difficult to see why China would agree to facilitate that possibility.All in all we think this deal is not as good as it seems on the surface and that it will be practically impossible to get through the regulatory approval process.

The much-anticipated acquisition by NVIDIA of Arm from Softbank was formally announced on Monday. The transaction is valued at $40 billion, an approximately equal combination of cash and NVIDIA stock.On the surface the deal looks strategically solid from NVIDIA's perspective. It places the company at the center of Arm's one hundred and eighty billion connected device ecosystem. Perhaps even more importantly, it opens up the possibility of an outright assault on Intel's data center dominance by adding Arm-based server processors to complement NVIDIA's existing lineup of GPUs and interconnect.Underneath the surface however, this deal is fraught with issues and risks. While Arm has been a very successful company, their growth is flatlining as smartphone sales stagnate. Furthermore, we see the rise of RISC-V as a very real threat to Arm's business model in the coming years. Arm has never competed with its customers. Under NVIDIA ownership, this will be virtually impossible to avoid.From a regulatory perspective, Arm IP moving under american ownership will raise the very real prospect that this technology will become a future weapon in the US-China trade and technology wars. In today's environment, it's difficult to see why China would agree to facilitate that possibility.All in all we think this deal is not as good as it seems on the surface and that it will be practically impossible to get through the regulatory approval process. 

NVIDIA+Arm. Strategically Solid But Practically Impossible.

United States

Advanced Micro Devices, Inc. (AMD) produces semiconductor products and devices. The Company offers products such as microprocessors, embedded microprocessors, chipsets, graphics, video and multimedia products and supplies it to third-party foundries, as well as provides assembling, testing, and packaging services. AMD serves customers worldwide.

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Advanced Micro Devices (AMD US)

Softbank – How Does AMD’s Resurgence and Xilinx Deal Impact the Nvidia-Arm Deal?

We consider the implications of AMD's latest CPU and GPU developments, as well as its move to acquire Xilinx on other competitors such as Nvidia...

Mio Kato

AMD. Making Sense Of The Proposed Xilinx Acquisition.

The Wall Street Journal recently reported that Advanced Micro Devices is

William Keating

NVIDIA to Increase Its Data Center Business with DPUs

NVIDIA leads in mar

Thomas Coughlin

Server CPU, DRAM, NAND Sales Heading For A Significant Decline As Inventory Digestion Commences.

A leading indicator for server sales

William Keating

NVIDIA+Arm. Strategically Solid But Practically Impossible.

The long-anticipated acquisition by NVIDIA of Arm Holdings (ARM LN)

William Keating

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