Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Thematic (Sector/Industry)

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<li>
The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous export restrictions for semicap. 
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<li>
For AI, it looks to be the closing of the A800 and H800 loopholes.
</li>
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I read both documents. They are pretty dense, and instead of going through a super detailed analysis, I want to give you a spark notes version of the export restrictions and the implications.
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</ul>



The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous export restrictions for semicap. 


For AI, it looks to be the closing of the A800 and H800 loopholes.


I read both documents. They are pretty dense, and instead of going through a super detailed analysis, I want to give you a spark notes version of the export restrictions and the implications.



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

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Nvidia's CEO Jensen Huang joined Hon Hai at its annual Tech Day yesterday, announcing  an expansion of their partnership into the development of AI factories that will produce new software.</li>
<li>Hon Hai unveiled its new 'Model N' EV, a van designed for logistics use cases. Its Model C SUV will have first customer deliveries in Taiwan in January 2024E.</li>
<li>The latest Nvidia partnership expansion announcement and EV developments will transform Hon Hai's unique value proposition to automakers. We continue to expect nearly 50% upside for the shares.</li>
</ul>


Nvidia's CEO Jensen Huang joined Hon Hai at its annual Tech Day yesterday, announcing  an expansion of their partnership into the development of AI factories that will produce new software.
Hon Hai unveiled its new 'Model N' EV, a van designed for logistics use cases. Its Model C SUV will have first customer deliveries in Taiwan in January 2024E.
The latest Nvidia partnership expansion announcement and EV developments will transform Hon Hai's unique value proposition to automakers. We continue to expect nearly 50% upside for the shares.


Hon Hai Tech Day Takeaways: Nvidia Announces AI Factories Partnership; Competitive Advantage for EVs

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Multiple media outlets on Tuesday have reported the US is tightening export controls for AI chips, which is expected to further limit the ability of Nvidia and other manufacturers to sell high-performance semiconductors to China.</li><li>Nvidia’s response: Nvidia’s response: “does not expect a near-term meaningful impact on financial results following US expansion of export controls to China…”, a company spokesperson says in an email to Bloomberg.</li><li>However, the Company executives have said blanket bans on exports to China would affect the long-term growth of the US chip industry.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Multiple media outlets on Tuesday have reported the US is tightening export controls for AI chips, which is expected to further limit the ability of Nvidia and other manufacturers to sell high-performance semiconductors to China.Nvidia’s response: Nvidia’s response: “does not expect a near-term meaningful impact on financial results following US expansion of export controls to China…”, a company spokesperson says in an email to Bloomberg.However, the Company executives have said blanket bans on exports to China would affect the long-term growth of the US chip industry.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Technology (Hardware/Semi): Quick note on newly announced restrictions on advanced AI chips

<ul><li>Near-term: strong demand with visibility into 2024, supply chain ramp-up in progress.</li><li>Hypercalers, AI related chip providers and supply chain channel all confirmed demands remain strong, with visibility into 2024.</li><li>Current bottlenecks are CoWoS and HBM. Suppliers are ramping up capacity to meet the demand (already observed signs of shortage easing recently). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Near-term: strong demand with visibility into 2024, supply chain ramp-up in progress.Hypercalers, AI related chip providers and supply chain channel all confirmed demands remain strong, with visibility into 2024.Current bottlenecks are CoWoS and HBM. Suppliers are ramping up capacity to meet the demand (already observed signs of shortage easing recently). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Thematic Investment and Megatrend - Riding the AI Wave into the Next Phase

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Kokusai Electric  / Equity Capital Markets

<ul>
<li>KKR is looking to raise around US$730m via selling a stake in <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> (KE) in its Japan IPO.</li>
<li>KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.</li>
<li>In our previous notes we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations.</li>
</ul>


KKR is looking to raise around US$730m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
In our previous notes we have looked at the company’s past performance and undertook a peer comparison. In this note, we talk about valuations.


Kokusai Electric IPO - Not Wholly Convinced, One Needs to Look past the Cycle

United States

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.  The Company's products provide interactive 3D graphics to the mainstream personal computer market.

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NVIDIA Corp (NVDA US)

October Restrictions Implications

The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous...

Fabricated Knowledge

Hon Hai Tech Day Takeaways: Nvidia Announces AI Factories Partnership; Competitive Advantage for EVs

The latest Nvidia partnership expansion will transform Hon Hai's unique value proposition to automakers. We continue to expect nearly 50% upside...

Vincent Fernando, CFA

Technology (Hardware/Semi): Quick note on newly announced restrictions on advanced AI chips

Multiple media outlets on Tuesday have reported the US is tightening export controls for AI chips, which is expected to further limit the ability...

CMB International

Thematic Investment and Megatrend - Riding the AI Wave into the Next Phase

Hypercalers, AI related chip providers and supply chain channel all confirmed demands remain strong, with visibility into 2024.

CMB International

Kokusai Electric IPO - Not Wholly Convinced, One Needs to Look past the Cycle

KKR is looking to raise around US$730m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO. In this note, we talk about the...

Sumeet Singh

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