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

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<ul>
<li>TSMC and ASML reported 1Q24 results last week; both stocks have fallen post results, impacted by global concerns despite a strong outlook for these two leaders into 2025E.</li>
<li>TSMC guided for strong growth not just in 2024E, but if one digs into management's comments, they actually provided strong visibility into their 2028E internal revenue expectations.</li>
<li>For ASML, its EUV product business is the key indicator to watch. We believe TSMC shares will continue to re-rate even through a period of global economic softness.</li>
</ul>


TSMC and ASML reported 1Q24 results last week; both stocks have fallen post results, impacted by global concerns despite a strong outlook for these two leaders into 2025E.
TSMC guided for strong growth not just in 2024E, but if one digs into management's comments, they actually provided strong visibility into their 2028E internal revenue expectations.
For ASML, its EUV product business is the key indicator to watch. We believe TSMC shares will continue to re-rate even through a period of global economic softness.


TSMC Just Provided Substantial Visibility into Their Long-Term Growth Estimate; ASML Adds Color

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>Q423 revenues of $2.49 billion, marginally above the guided midpoint, up 3.6% QoQ but down 15.6% YoY. Net income was $583 million, down $158 million QoQ.</li>
<li>Current quarter guidance of $2.3 billion, down 8% QoQ and also down around 5% YoY</li>
<li>Interesting Q&amp;A discussion on backlog. KLAC's order book is risker than their peers due to their shorter lead times. Something to watch...</li>
</ul>


Q423 revenues of $2.49 billion, marginally above the guided midpoint, up 3.6% QoQ but down 15.6% YoY. Net income was $583 million, down $158 million QoQ.
Current quarter guidance of $2.3 billion, down 8% QoQ and also down around 5% YoY
Interesting Q&amp;A discussion on backlog. KLAC's order book is risker than their peers due to their shorter lead times. Something to watch...


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.

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>TSMC started this season’s earnings with a strong result. Shares rallied immensely on this print, and it’s justified. In almost every metric, TSMC came out ahead.</li>
<li>
<p>TSMC had a revenue, operating income, and gross margin beat and guided above the street.</p>
</li>
<li>
<p>Now let’s break out revenue by node and platform for a further look into the results of the world’s largest foundry.</p>
</li>
</ul>


TSMC started this season’s earnings with a strong result. Shares rallied immensely on this print, and it’s justified. In almost every metric, TSMC came out ahead.

TSMC had a revenue, operating income, and gross margin beat and guided above the street.


Now let’s break out revenue by node and platform for a further look into the results of the world’s largest foundry.



TSMC, SMCI, Texas Instruments, AWE, ASML, and LRCX

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.</li>
<li>Faster ramp on N3, likely N3E, N3P than competitor's. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024. </li>
<li>TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12" mature technology despite better demand 8" specialty technology. </li>
</ul>


TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.
Faster ramp on N3, likely N3E, N3P than competitor's. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024. 
TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12" mature technology despite better demand 8" specialty technology. 


What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors

Thematic (Sector/Industry)

<ul>
<li>SEMI reports September front end and back end test/assembly equipment sales decline of 18% and 25% y/y, respectively, resulting 3Q23 sales decline of 17% and 28% y/y.</li>
<li>However, WSTS/SIA and US ISM Purchasing Managers Index reported more moderate 7% y/y decline in August global semi sales and 4% y/y decline in September index. </li>
<li>The discrepancy is due to global semi vendors are seeing PC and Smartphone IC improvement but need to consume earlier overbuilt inventories first before boosting in house or foundries' capex.</li>
</ul>


SEMI reports September front end and back end test/assembly equipment sales decline of 18% and 25% y/y, respectively, resulting 3Q23 sales decline of 17% and 28% y/y.
However, WSTS/SIA and US ISM Purchasing Managers Index reported more moderate 7% y/y decline in August global semi sales and 4% y/y decline in September index. 
The discrepancy is due to global semi vendors are seeing PC and Smartphone IC improvement but need to consume earlier overbuilt inventories first before boosting in house or foundries' capex.


What Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us?

Netherlands

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients worldwide.

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ASML Holding NV (ASML US)

TSMC Just Provided Substantial Visibility into Their Long-Term Growth Estimate; ASML Adds Color

If you dig into the details, TSMC provided substantial insight into the company's internal estimates for long-term revenue. For ASML, we discuss...

Vincent Fernando, CFA

KLAC. Looks a Lot Like LRCX!

Q423 $2.49 billion, +3.6% QoQ, -15.6% YoY. Net income was $583 million, down $158 million QoQ. Q124 guidance of $2.3 billion, -8% QoQ -5% YoY,...

William Keating

TSMC, SMCI, Texas Instruments, AWE, ASML, and LRCX

Its the first week of earnings, and it's already a busy one. TSMC started this season’s earnings with a strong result. Shares rallied immensely on...

Fabricated Knowledge

What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors

What Stories TSMC Investor Conference Telling Us About Customers, Supply Chains, and Competitors; TSMC expects 2024 semi sector in recovery with 20...

Andrew Lu

What Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us?

Sep US SEMI Equipment and Aug SIA/WSTS Global Sales Y/Y Discrepancy Tells Us global semi vendors are consuming earlier overbuilt inventories first...

Andrew Lu

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