Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>Asustek and Acer recently reported 2Q23 results with both companies showing a rebound in margins and normalized inventory levels. The cycle trough is clearly past.</li>
<li>Asustek expects to grow its server product revenue by 500% by 2027 and is also developing AI PCs that could generate a significant sales volume by 3Q24.</li>
<li>The latest results and comments not just make a coming PC up-cycle clear, but also imply that it could be stronger than previous cycles thanks to AI PCs.</li>
</ul>


Asustek and Acer recently reported 2Q23 results with both companies showing a rebound in margins and normalized inventory levels. The cycle trough is clearly past.
Asustek expects to grow its server product revenue by 500% by 2027 and is also developing AI PCs that could generate a significant sales volume by 3Q24.
The latest results and comments not just make a coming PC up-cycle clear, but also imply that it could be stronger than previous cycles thanks to AI PCs.


PC Monitor: Asustek Preparing for AI PC Upgrade Wave, Volume Sales in 3Q24

<ul>
<li>Intel's latest results imply a potential bottoming of its business &amp; nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.</li>
<li>PC industry inventories are now "healthy" and Intel's Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.</li>
<li>Edge AI will drive a major upgrade cycle for PCs worldwide and Intel's new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their "ChatGPT Moment".</li>
</ul>


Intel's latest results imply a potential bottoming of its business &amp; nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.
PC industry inventories are now "healthy" and Intel's Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.
Edge AI will drive a major upgrade cycle for PCs worldwide and Intel's new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their "ChatGPT Moment".


Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI

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

<ul>
<li>Nvidia's CEO is in Taiwan this week for Computex and the company continues to dominate the headlines announcing Mediatek, Softbank, and WPP key partnerships.</li>
<li>Semiconductor shorts have been squeezed after the global rally sparked by Nvidia's monster results; We released our latest Taiwan Shorts Monitor to identify short squeezes.</li>
<li>Earnings: Light this week for Taiwan, however PC industry leaders Hewlett Packard Co (HPQ US) and Dell Technologies Inc (DELL US) will report.</li>
</ul>


Nvidia's CEO is in Taiwan this week for Computex and the company continues to dominate the headlines announcing Mediatek, Softbank, and WPP key partnerships.
Semiconductor shorts have been squeezed after the global rally sparked by Nvidia's monster results; We released our latest Taiwan Shorts Monitor to identify short squeezes.
Earnings: Light this week for Taiwan, however PC industry leaders Hewlett Packard Co (HPQ US) and Dell Technologies Inc (DELL US) will report.


Taiwan Tech Weekly: Nvidia in Taiwan - Everyone Will Need 'AI Factories'; Identifying Short Squeezes

<ul>
<li>Acer shares slumped 7% in a day after the company missed analyst expectations. Acer has now underperformed Asustek since our March 21st Long Asustek vs. Short Acer recommendation.</li>
<li>Despite the earnings miss, Acer management said it believed 1Q23 will be the trough for the business and metrics should be improving going forward.</li>
<li>We believe one can consider reversing our Long Asustek vs. Short Acer Trade to become Long ACER vs. Short Asustek, and hold this trade through Asustek's upcoming earnings results.</li>
</ul>


Acer shares slumped 7% in a day after the company missed analyst expectations. Acer has now underperformed Asustek since our March 21st Long Asustek vs. Short Acer recommendation.
Despite the earnings miss, Acer management said it believed 1Q23 will be the trough for the business and metrics should be improving going forward.
We believe one can consider reversing our Long Asustek vs. Short Acer Trade to become Long ACER vs. Short Asustek, and hold this trade through Asustek's upcoming earnings results.


PC Industry Monitor: Close Long Asus, Short Acer; Now Reverse the Trade and Long ACER Vs. Short Asus

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

TYC Brother Industrial / Equity Bottom-Up

<ul><li>TYC Brother Industrial is set to dominate the NEV market with a US plant scheduled to be operational by the first quarter of 2025.</li><li>Despite sanctions, a Russian company has introduced the MP21 SBC to rival the Raspberry Pi 5, showcasing the competitiveness of the technology market.</li><li>Cerebras and Dell have joined forces to challenge Nvidia in the AI market, highlighting the growth of AI accelerator technology for servers. Taiwan's carbon market is advancing with new initiatives and regulations, while the UK collaborates with Taiwan to lead in semiconductors at Semi-Impact forum. India is ramping up cobalt supply efforts to meet growing demand.</li></ul>

TYC Brother Industrial is set to dominate the NEV market with a US plant scheduled to be operational by the first quarter of 2025.Despite sanctions, a Russian company has introduced the MP21 SBC to rival the Raspberry Pi 5, showcasing the competitiveness of the technology market.Cerebras and Dell have joined forces to challenge Nvidia in the AI market, highlighting the growth of AI accelerator technology for servers. Taiwan's carbon market is advancing with new initiatives and regulations, while the UK collaborates with Taiwan to lead in semiconductors at Semi-Impact forum. India is ramping up cobalt supply efforts to meet growing demand.

Tech Supply Chain Tracker (21-Jun-2024): TYC Brother Industrial excels in NEVs; US plant ready by 1Q25.

United States

Dell Technologies Inc. provides computer products. The Company offers laptops, desktops, tablets, workstations, servers, monitors, printers, gateways, software, storage, and networking products. Dell Technologies serves customers worldwide.

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Dell Technologies (DELL US)

PC Monitor: Asustek Preparing for AI PC Upgrade Wave, Volume Sales in 3Q24

Asustek and Acer recently reported 2Q23 results with both companies showing a rebound in margins and normalized inventory levels. The cycle trough...

Vincent Fernando, CFA

Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI

Edge AI will drive a major upgrade cycle for PCs worldwide -- We recommend getting ahead of PC's having their "ChatGPT Moment".

Vincent Fernando, CFA

Taiwan Tech Weekly: Nvidia in Taiwan - Everyone Will Need 'AI Factories'; Identifying Short Squeezes

Nvidia's CEO is in Taiwan this week for Computex and the company continues to dominate the headlines announcing Mediatek, Softbank, and WPP key...

Vincent Fernando, CFA

PC Industry Monitor: Close Long Asus, Short Acer; Now Reverse the Trade and Long ACER Vs. Short Asus

Despite an earnings miss, Acer management said it believed 1Q23 will be the trough for the business and metrics should be improving going forward.

Vincent Fernando, CFA

Tech Supply Chain Tracker (21-Jun-2024): TYC Brother Industrial excels in NEVs; US plant ready by 1Q25.

TYC Brother Industrial excels in NEV market; Russian company competes with Raspberry Pi 5; Cerebras teams up with Dell in AI market; Taiwan's...

Tech Supply Chain Tracker

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