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)

<ul>
<li>What inning is AI in?</li>
<li>If <a href="https://www.fabricatedknowledge.com/p/lessons-from-history-the-rise-and" target="_blank" rel="noopener">history is a guide</a>, it’s hard to predict the twists and turns of a new market growing from nothing.</li>
<li>Here’s my humble attempt at estimating AI penetration and my thoughts on the run-rate business of AI models and industry structure.</li>
</ul>


What inning is AI in?
If history is a guide, it’s hard to predict the twists and turns of a new market growing from nothing.
Here’s my humble attempt at estimating AI penetration and my thoughts on the run-rate business of AI models and industry structure.


AI Industry Structure and Business Model: What Inning is It?

<ul><li>Welcome to the Halloween Earnings Edition. It's a spooky time in markets.</li><li>So far, there’s been a lot of volatility this earnings season, specifically around the Magnificent 7. Let’s discuss.</li><li>I won’t discuss each company specifically, but I will focus on the high-level capex commentary.</li></ul>

Welcome to the Halloween Earnings Edition. It's a spooky time in markets.So far, there’s been a lot of volatility this earnings season, specifically around the Magnificent 7. Let’s discuss.I won’t discuss each company specifically, but I will focus on the high-level capex commentary.

Halloween Earnings Season 🎃 (Hyperscalers, TXN, VICR, SK Hynix, KLAC, MXL, INTC, AWE, ACMR, BESI)

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<ul>
<li>TSMC's manufacturing value only accounts for 1/4 of H100 HGX bill of materials but HBM3 accounts for more than half;</li>
<li>ABF substrate, SXM5 module, UBB and CCL vendors should be benefited, especially for Ibiden Co Ltd (4062 JP) on ABF substrate/OAM and Elite Material (2383 TT) on OAM/UBB CCL;</li>
<li>Nvidia AI GPU likely doubling each year in next two years; Our estimates on Nvidia 2025 AI GPU EPS contribution are exceeding Bloomberg consensus earnings estimates, suggesting room to raise.</li>
</ul>


TSMC's manufacturing value only accounts for 1/4 of H100 HGX bill of materials but HBM3 accounts for more than half;
ABF substrate, SXM5 module, UBB and CCL vendors should be benefited, especially for Ibiden Co Ltd (4062 JP) on ABF substrate/OAM and Elite Material (2383 TT) on OAM/UBB CCL;
Nvidia AI GPU likely doubling each year in next two years; Our estimates on Nvidia 2025 AI GPU EPS contribution are exceeding Bloomberg consensus earnings estimates, suggesting room to raise.


BOM Cost and CoWoS Demand Analysis on Nvidia AI GPU HGX for 2023-2025, Room to Raise Estimates

Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Quantitative Analysis

<ul>
<li>Short duration US factor strategies outperformed in September as markets came under pressure (value and dividend yield).</li>
<li>Despite keeping rates unchanged on the 20th of September at 5.5% (upper bound), Fed Chair Powell indicated that rates would be kept higher for longer than initially anticipated.</li>
<li>In this note we explore the <em><strong>relative performance</strong></em> of US factor strategies through different interest rate cycles, to inform timing around factor/style rotation.</li>
</ul>


Short duration US factor strategies outperformed in September as markets came under pressure (value and dividend yield).
Despite keeping rates unchanged on the 20th of September at 5.5% (upper bound), Fed Chair Powell indicated that rates would be kept higher for longer than initially anticipated.
In this note we explore the relative performance of US factor strategies through different interest rate cycles, to inform timing around factor/style rotation.


US Factor Strategies: Value and Dividend Yield Outperform in September, Higher for Longer Narrative

<ul><li>First, let’s talk about Huawei. I want to highlight how lackadaisically the export restrictions have even been applied.</li><li>BIS granted validated end-user status to SMIC in 2007, which meant that as late as 2020, multiple SMIC entities were still receiving tools from American companies.</li><li>BIS got lobbied by tool makers to undo commerce control list regulations in 2018. Also, AMEC has outright stolen tools from US companies.</li></ul>

First, let’s talk about Huawei. I want to highlight how lackadaisically the export restrictions have even been applied.BIS granted validated end-user status to SMIC in 2007, which meant that as late as 2020, multiple SMIC entities were still receiving tools from American companies.BIS got lobbied by tool makers to undo commerce control list regulations in 2018. Also, AMEC has outright stolen tools from US companies.

Huawei and Kirin 9000S, Memory Markets, Intel, Nordic, and Broadcom TPUs

United States

Snap Inc. provides technology and social media services. The Company develops mobile camera application products and services that allow users to send and receive photos, drawings, text, and videos. Snap serves customers worldwide.

Pinterest, Inc. operates and maintains social networking site. The Company provides online venue for personal photos, ideas, oddities, decorations, places to visit, recipes, and other items. Pinterest serves customers worldwide.

Match Group, Inc. is a dating service provider. The Company offers diverse portfolio of apps and services which enables connections across the spectrum of age, race, gender, sexual orientation, and backgrounds. Match Group serves customers worldwide.

IAC Inc operates as a holding company. The Company, through its subsidiaries, provides media and Internet services. IAC serves customers worldwide.

EverQuote, Inc. operates as an Internet based marketing firm. The Company, through its platform, enables consumers to connect with auto insurance carriers and agents to meet their auto insurance needs. EverQuote serves customers in the United States.

Charter Communications, Inc. operates as a cable telecommunications company. The Company offers cable broadcasting, internet, voice, and mass media services. Charter Communications serves customers in the United States.

The Trade Desk, Inc. operates as an advertising technology company. The Company offers online advertising platform that manages display, social, mobile, and video advertising campaigns. Trade Desk serves customers worldwide.

World Wrestling Entertainment, Inc. operates as a media and entertainment company. The Company offers live wrestling events, television programming, music publishing, advertising, licensing, and home video streaming services. World Wrestling distributes its programs worldwide in various languages.

Fox Corporation operates as an entertainment company. The Company produces and licenses news, sports, and entertainment content for distribution through cable television systems, direct broadcast satellite operators, telecommunications companies, and online video distributors. Fox also manages broadcast studios, theaters, editing bays, sound stages, and other production facilities.

Roku, Inc. designs and manufactures consumer electronic products. The Company offers wireless enabled devices that stream audio and video content from the internet to home entertainment systems. Roku serves customers globally.

LY Corporation operates as an internet search engine "Yahoo! JAPAN". The Company provides electronic commerce and settlement finance services for small medium enterprises and individuals. LY also operates media business including search linked advertising and display advertising services.

CAR Group Limited operates as a digital marketplace for vehicles. The Company provides a diversified portfolio of brands to sell and buy cars. CAR Group serves customers worldwide.

Domain Holdings Australia Limited offers multi-platform property solutions. The Company operates an online portal that delivers property marketing solutions for residential, new development, and commercial properties. Domain Holdings Australia serves buyers, sellers, renters, and investors in Australia.

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of China.

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

Sea Limited offers information technology services. The Company provides online personal computer and mobile digital content, e-commerce, and payment platforms. Sea serves customers worldwide.

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

New Work SE operates an an online business network. The Company offers social network for business professionals to connect and share ideas, projects, jobs, and advice. New Work serves customers in Europe.

Vivendi, through its subsidiaries, conducts operations ranging from music, games and television to film and telecommunications.  The Company provides digital and pay television services, sells music compact discs (CDs), develops and distributes interactive entertainment, and operates mobile and fixed-line telecommunications.

WPP PLC operates a communications services group. The Company provides operations encompass advertising, media investment management, consultancy, public relations, healthcare and specialist communications, and branding and identity services. WPP serves customers worldwide.

Alphabet Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Alphabet (GOOGL US)

AI Industry Structure and Business Model: What Inning is It?

What inning is AI in? If history is a guide, it’s hard to predict the twists and turns of a new market growing from nothing...

Fabricated Knowledge

Halloween Earnings Season 🎃 (Hyperscalers, TXN, VICR, SK Hynix, KLAC, MXL, INTC, AWE, ACMR, BESI)

Welcome to the Halloween Earnings Edition. It's a spooky time in markets. So far, there’s been a lot of volatility this earnings season,...

Fabricated Knowledge

BOM Cost and CoWoS Demand Analysis on Nvidia AI GPU HGX for 2023-2025, Room to Raise Estimates

After conducting our in depth bill of materials and CoWoS demand analysis on Nvidia H100 AI GPU HGX for 2023-2025, we conclude Bloomberg estimates...

Andrew Lu

US Factor Strategies: Value and Dividend Yield Outperform in September, Higher for Longer Narrative

US rates and factor strategies: higher for longer likely to drive outperformance of short duration factor strategies, long US value short US growth.

DMA

Huawei and Kirin 9000S, Memory Markets, Intel, Nordic, and Broadcom TPUs

A news filled week in semiconductors. Let's discuss. First, let’s talk about Huawei. I want to highlight how lackadaisically the export...

Fabricated Knowledge

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)