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) / Equity Bottom-Up

<ul>
<li>Taiwan Tech Plays Have Soared Since TSMC's Strong Outlook, and SK Hynix Reported a Return to Op Profit</li>
<li>Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron</li>
<li>Key Upcoming Events -- Intel, Microsoft, Mediatek, UMC Results Ahead</li>
</ul>


Taiwan Tech Plays Have Soared Since TSMC's Strong Outlook, and SK Hynix Reported a Return to Op Profit
Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
Key Upcoming Events -- Intel, Microsoft, Mediatek, UMC Results Ahead


Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>With a strong 20A/18A team, Intel might take some CPU shares back from AMD to affect TSMC but reduce geopolitical tensions from the US after Intel returning to the best. </li>
<li>SMIC can use DUV to do 3nm but different from others' because Moore's law is no longer using circuit line width but to use performance, power, density to determine 3nm. </li>
<li>New fabless industry opportunities are emerging in middle east countries, and south east Asia countries like Vietnam. Despite high cost issues, global expansion will help TSMC to attract global talents. </li>
</ul>


With a strong 20A/18A team, Intel might take some CPU shares back from AMD to affect TSMC but reduce geopolitical tensions from the US after Intel returning to the best. 
SMIC can use DUV to do 3nm but different from others' because Moore's law is no longer using circuit line width but to use performance, power, density to determine 3nm. 
New fabless industry opportunities are emerging in middle east countries, and south east Asia countries like Vietnam. Despite high cost issues, global expansion will help TSMC to attract global talents. 


A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions

<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

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

<h2>Summary</h2>
<a href="https://www.smartkarma.com/entities/11230" target="_blank" data-smartkarma-citation="entities:11230:1"></a>
<a href="https://www.smartkarma.com/entities/11230" target="_blank" data-smartkarma-citation="entities:11230:1">Taiwan Semiconductor Mfg Co</a> has dominated the foundry segment over the past two decades. With revenues of $33 billion in 2017, the company had a 56% share of the foundry market and was over five times the size of its nearest competitor, Globalfoundries. Under the visionary leadership of Morris Chang, TSMC effectively invented the fabless model. Originally mocked by former AMD CEO Gerry Sanders who once famously quipped that “real men own fabs”, the fabless model has evolved into a thriving ecosystem, one which has facilitated the meteoric rise of some of the biggest names in the semiconductor segment including <a href="https://www.smartkarma.com/entities/666" target="_blank" data-smartkarma-citation="entities:666:1">Apple</a>, <a href="https://www.smartkarma.com/entities/969" target="_blank" data-smartkarma-citation="entities:969:1">Qualcomm </a>and <a href="https://www.smartkarma.com/entities/5891" target="_blank" data-smartkarma-citation="entities:5891:1">Nvidia</a>.  
TSMC’s success has been predicated upon the company's so-called Trinity of Strengths, namely process leadership, manufacturing excellence and customer trust. In today’s highly competitive foundry landscape, those strengths have never been more significant.
While the smartphone processor business has been central to TSMC's growth in recent years with Apple accounting for some 22% of revenues, the company is well positioned to diversify and benefit from high, secular growth trends in IoT, Automotive and AI acceleration. Even more significantly, TSMC is set to compete for the first time with Intel in the lucrative data center market by virtue of its role in manufacturing server chips for <a href="https://www.smartkarma.com/entities/19009" target="_blank" data-smartkarma-citation="entities:19009:1">Advanced Micro Devices</a> and a growing swathe of ARM-based server initiatives lead by none other than <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon</a>. 
Between 2006 and 2017, TSMC grew at a CAGR of 9.8% in NT$ terms, easily outpacing growth of both the broader semiconductor segment and its foundry peers. For the period 2019-2022, we model TSMC growing at a slightly lower CAGR of 8.36%, but nonetheless more than double the anticipated CAGR for the semiconductor segment as a whole.

Summary

Taiwan Semiconductor Mfg Co has dominated the foundry segment over the past two decades. With revenues of $33 billion in 2017, the company had a 56% share of the foundry market and was over five times the size of its nearest competitor, Globalfoundries. Under the visionary leadership of Morris Chang, TSMC effectively invented the fabless model. Originally mocked by former AMD CEO Gerry Sanders who once famously quipped that “real men own fabs”, the fabless model has evolved into a thriving ecosystem, one which has facilitated the meteoric rise of some of the biggest names in the semiconductor segment including Apple, Qualcomm and Nvidia.  
TSMC’s success has been predicated upon the company's so-called Trinity of Strengths, namely process leadership, manufacturing excellence and customer trust. In today’s highly competitive foundry landscape, those strengths have never been more significant.
While the smartphone processor business has been central to TSMC's growth in recent years with Apple accounting for some 22% of revenues, the company is well positioned to diversify and benefit from high, secular growth trends in IoT, Automotive and AI acceleration. Even more significantly, TSMC is set to compete for the first time with Intel in the lucrative data center market by virtue of its role in manufacturing server chips for Advanced Micro Devices and a growing swathe of ARM-based server initiatives lead by none other than Amazon. 
Between 2006 and 2017, TSMC grew at a CAGR of 9.8% in NT$ terms, easily outpacing growth of both the broader semiconductor segment and its foundry peers. For the period 2019-2022, we model TSMC growing at a slightly lower CAGR of 8.36%, but nonetheless more than double the anticipated CAGR for the semiconductor segment as a whole. 

A Bull Investment Case for TSMC (Summary Version)

<ul>
<li>From a growth forecast of &gt;20% YoY just two months ago, 2024 is now pegged as a low-to-no growth year</li>
<li>This will be a big negative for the likes of Infineon, ST Microelectronics, NXP, Globalfoundries and HH Grace, among others. </li>
<li>Our anticipated gloomy Q423 earnings season just got a whole lot gloomier</li>
</ul>


From a growth forecast of &gt;20% YoY just two months ago, 2024 is now pegged as a low-to-no growth year
This will be a big negative for the likes of Infineon, ST Microelectronics, NXP, Globalfoundries and HH Grace, among others. 
Our anticipated gloomy Q423 earnings season just got a whole lot gloomier


Mobileye Profit Warning Is A Harbinger Of Gloom As Q423 Earnings Loom

United States

Applied Materials, Inc. develops, manufactures, markets, and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.  The Company's customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules and other electronic devices manufacturers.

QUALCOMM, Inc . manufactures digital wireless communications equipment.  The Company licenses its code division multiple access (CDMA) and orthogonal frequency division multiplexing access intellectual property to other companies, and produces CDMA-based integrated circuits; and produces equipment and software used to track workers and assets; and software for wireless content enablement.

KLA-Tencor Corporation manufactures yield management and process monitoring systems for the semiconductor industry.  The Company's systems are used to analyze product and process quality at critical steps in the manufacture of circuits and provide feedback so that fabrication problems can be identified. KLA-Tencor operates sales, service, and application centers worldwide.

Lam Research Corporation manufactures, markets, and services semiconductor processing equipment used in the making of integrated circuits.  The Company's products are used to deposit special films on a silicon wafer and etch away portions of various films to create a circuit design.  Lam sells its products around the world.

Monolithic Power Systems Inc specializes in high-performance, integrated power solutions. The Company provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications.

ON Semiconductor Corporation supplies analog, standard logic, and discrete semiconductors for data and power management. The Company's products include integrated circuits, and analog ICs. ON also offers discrete semiconductors in a variety of surface mount and standard packages.

Skyworks Solutions, Inc., a wireless semiconductor company, designs and manufactures radio frequency and complete semiconductor system solutions for mobile communications applications.  The Company provides front-end modules, radio frequency subsystems, and system solutions to wireless handset and infrastructure customers worldwide.

Microchip Technology Incorporated designs, manufactures, and markets microcontrollers, related mixed-signal and memory products, and application development systems for high-volume embedded control applications. The Company also designs, develops, and markets linear/mixed-signal, power management, and thermal management products.

Entegris Inc. provides materials management products and services to the microelectronics industry on a worldwide basis.  The Company provides products such as wafer shippers, wafer transport and process carriers, pods, and work-in-process boxes.  Entegris also provides chemical delivery products such as valves, fittings, tubing, pipe, and containers.

Analog Devices, Inc. designs, manufactures, and markets integrated circuits used in analog and digital signal processing.  The Company's products are used in communications, computer, industrial, instrumentation, military/aerospace, automotive, and high-performance consumer electronics applications.  Analog Devices sells its products worldwide.

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

Lasertec Corporation develops, designs, manufactures and markets photomask inspection systems to make semiconductor devices, confocal scanning laser microscopes and liquid crystal display (LCD) inspection systems.

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

NXP Semiconductors NV operates as a global semiconductor company. The Company designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking.  NXP offers its products to the automotive, identification, wireless infrastructure, lighting, mobile, and computing applications.

LONGi Green Energy Technology Co., Ltd. develops, manufactures and sells silicon rods and silicon wafers. The Company's main products include 6 inch, 6.5 inch and 8 inch monocrystalline silicon rods and wafers.

LONGi Green Energy Technology (601012 CH)

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Semiconductor Manufacturing International Corp (SMIC)

DISCO CORPORATION manufactures abrasive and precision industrial machinery for cutting and grinding purposes.  The Company's products are applied in the semiconductor, electronics, and construction industries to produce consumer goods such as personal computers, digital cameras, video game systems, and Digital Video Disc (DVD) players.

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

Intel Corporation designs, manufactures, and sells computer components and related products.  The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products.

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

Intel Corp (INTC US)

Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events

A strong outlook from TSMC and SK Hynix's return to op profit have boosted Taiwan tech; Why Microsoft's Copilot will accelerate demand for DRAM;...

Vincent Fernando, CFA

A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions

A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions. Intel might ramp up its 20A/18A ahead of TSMC 2nm...

Andrew Lu

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

A Bull Investment Case for TSMC (Summary Version)

As we approach the 5 year anniversary of this SK original on TSMC, I'm quite proud of the how the analysis it contains has stood the test of time....

William Keating

Mobileye Profit Warning Is A Harbinger Of Gloom As Q423 Earnings Loom

From a growth forecast of >20% YoY just two months ago, Mobileye's 2024 is now pegged as a low-to-no growth year. Bad news for Infineon, ST Micro,...

William Keating

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events

​A strong outlook from TSMC and SK Hynix's return to op profit have boosted Taiwan tech; Why Microsoft's Copilot will accelerate demand for DRAM;...

Vincent Fernando, CFA

A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions

A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions. Intel might ramp up its 20A/18A ahead of TSMC 2nm...

Andrew Lu

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

A Bull Investment Case for TSMC (Summary Version)

As we approach the 5 year anniversary of this SK original on TSMC, I'm quite proud of the how the analysis it contains has stood the test of time....

William Keating

Mobileye Profit Warning Is A Harbinger Of Gloom As Q423 Earnings Loom

From a growth forecast of >20% YoY just two months ago, Mobileye's 2024 is now pegged as a low-to-no growth year. Bad news for Infineon, ST Micro,...

William Keating

A strong outlook from TSMC and SK Hynix's return to op profit have boosted Taiwan tech; Why Microsoft's Copilot will accelerate demand for DRAM;...