Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

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

<ul>
<li>Samsung announced that it would reduce memory chip production in light of crashing profits, this is after the company had previously said it would not reduce production. Memory names rallied.</li>
<li>Hon Hai announced a $820m investment plan for EV manufacturing in southern Taiwan.</li>
<li>Japan's semiconductor manufacturing equipment export restrictions targeting China will take effect starting in July.</li>
</ul>


Samsung announced that it would reduce memory chip production in light of crashing profits, this is after the company had previously said it would not reduce production. Memory names rallied.
Hon Hai announced a $820m investment plan for EV manufacturing in southern Taiwan.
Japan's semiconductor manufacturing equipment export restrictions targeting China will take effect starting in July.


Taiwan Tech Weekly: Samsung Finally Announces Chip Production Cuts; Hon Hai's New EV Factory

<ul>
<li>Hon Hai reports start of production for electric tractors in the U.S., and separately its founder is seeking the support of Taiwan's KMT party to run for Taiwan president.</li>
<li>The extreme Delta Thailand vs. Delta Taiwan valuation disconnect has finally reverted hard; Delta Thailand shares have crashed recently relative to Delta Taiwan not trading.</li>
<li>The long holiday has opened up some rare ADR discounts for Taiwan dual-listed names.</li>
</ul>


Hon Hai reports start of production for electric tractors in the U.S., and separately its founder is seeking the support of Taiwan's KMT party to run for Taiwan president.
The extreme Delta Thailand vs. Delta Taiwan valuation disconnect has finally reverted hard; Delta Thailand shares have crashed recently relative to Delta Taiwan not trading.
The long holiday has opened up some rare ADR discounts for Taiwan dual-listed names.


Taiwan Tech Weekly: Market Re-Opens After Long Holiday; U.S.-China Chip War Heats Up Further

<ul>
<li>Micron earnings this week, will provide insight on the outlook for the memory chip space.</li>
<li>The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.</li>
<li>Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.</li>
</ul>


Micron earnings this week, will provide insight on the outlook for the memory chip space.
The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.
Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.


Taiwan Tech Weekly: Micron Earnings to Provide Memory Outlook; Taiwan Vs. SOX Divergence

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.</li>
<li>The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. </li>
<li>While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.</li>
</ul>


Hon Hai results slightly beat on revenue and slightly missed on EPS, but overall the result was decent since China COVID margin impact was well managed.
The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle platform business. 
While 2023E revenue was guided to be flat YoY, this was already roughly expected. We maintain our structural Long view on the shares.


Hon Hai Results: Managed Q4 COVID Issues Well, Reiterates Margin Expansion & EV Targets; Stay Long

<ul>
<li>Apple &amp; Hon Hai are lobbying for easier labor laws in India, setting the ground for a major shift of production to the country.</li>
<li>TSMC is being heavily courted by Singapore to set up a manufacturing facility in the city state.</li>
<li>Hon Hai will report earnings this week. We are structurally long the company despite potential for weak 4Q numbers.</li>
</ul>


Apple &amp; Hon Hai are lobbying for easier labor laws in India, setting the ground for a major shift of production to the country.
TSMC is being heavily courted by Singapore to set up a manufacturing facility in the city state.
Hon Hai will report earnings this week. We are structurally long the company despite potential for weak 4Q numbers.


Taiwan Tech Weekly: Apple & Hon Hai Push for India Labor Changes, Singapore Heavily Courting TSMC

Taiwan

Hon Hai Precision Industry Co., Ltd. provides electronic manufacturing services for computers, communications, and consumer electronic products.  The Company's business operations include desktop and notebook PC assembly, connector production, cable assembly, PCB assembly, handset manufacturing, networking equipment, and other consumer electronic devices manufacturing.

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Hon Hai Precision Industry (2317 TT)

Taiwan Tech Weekly: Samsung Finally Announces Chip Production Cuts; Hon Hai's New EV Factory

Samsung reversed its production capacity strategy after suffering losses. Also, Japan's semiconductor manufacturing equipment export restrictions...

Vincent Fernando, CFA

Taiwan Tech Weekly: Market Re-Opens After Long Holiday; U.S.-China Chip War Heats Up Further

Hon Hai reports start of production for electric tractors in the U.S., and separately its founder is seeking the support of Taiwan's KMT party to...

Vincent Fernando, CFA

Taiwan Tech Weekly: Micron Earnings to Provide Memory Outlook; Taiwan Vs. SOX Divergence

Micron earnings this week, will provide insight on the outlook for the memory chip space. We remain biased to be Long Micron vs. Short Nanya Tech.

Vincent Fernando, CFA

Hon Hai Results: Managed Q4 COVID Issues Well, Reiterates Margin Expansion & EV Targets; Stay Long

The company has reiterated its 2025 target for gross margin to rise to 10% and over NT$1 trillion of revenue by 2025 from its new Electric Vehicle...

Vincent Fernando, CFA

Taiwan Tech Weekly: Apple & Hon Hai Push for India Labor Changes, Singapore Heavily Courting TSMC

Hon Hai results are coming out March 15th. The U.S. is also reportedly preparing even more China restrictions for semiconductor equipment.

Vincent Fernando, CFA

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