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>TSMC results came in much better than feared. Revenue was slightly weaker than expected and below consensus. This quarter's big story was margins driven primarily by FX changes.</li>
<li>Revenue was slightly below Taiwan Dollar (TWD) expectations, but margins were ahead of consensus. The big driver of this margin beat was FX, as the dollar weakened against the TWD.</li>
<li>The margin beat happened despite the 3nm ramp, a meaningful headwind. As N3 becomes a larger node, the headwind should increase, especially next quarter.</li>
</ul>


TSMC results came in much better than feared. Revenue was slightly weaker than expected and below consensus. This quarter's big story was margins driven primarily by FX changes.
Revenue was slightly below Taiwan Dollar (TWD) expectations, but margins were ahead of consensus. The big driver of this margin beat was FX, as the dollar weakened against the TWD.
The margin beat happened despite the 3nm ramp, a meaningful headwind. As N3 becomes a larger node, the headwind should increase, especially next quarter.


Weekly Earnings (ASML, LRCX, TSMC, Nanya)

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

Equity Bottom-Up

<ul>
<li>Q323 revenues of $3.48 billion, ahead of guidance and up 8.6% sequentially</li>
<li>December quarter guidance of $3.7 billion at the midpoint suggests ongoing recovery</li>
<li>However, still-declining services revenue indicates that all other headwinds remain in place</li>
</ul>


Q323 revenues of $3.48 billion, ahead of guidance and up 8.6% sequentially
December quarter guidance of $3.7 billion at the midpoint suggests ongoing recovery
However, still-declining services revenue indicates that all other headwinds remain in place


LRCX. China, DRAM Tailwinds Driving Modest Recovery

<ul>
<li>
The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous export restrictions for semicap. 
</li>
<li>
For AI, it looks to be the closing of the A800 and H800 loopholes.
</li>
<li>
I read both documents. They are pretty dense, and instead of going through a super detailed analysis, I want to give you a spark notes version of the export restrictions and the implications.
</li>
</ul>



The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous export restrictions for semicap. 


For AI, it looks to be the closing of the A800 and H800 loopholes.


I read both documents. They are pretty dense, and instead of going through a super detailed analysis, I want to give you a spark notes version of the export restrictions and the implications.



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

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>TSMC and ASML will report results this week. We may get additional detail about the scope of AI-related demand as a medium-term driver for the semiconductor industry.</li>
<li>Many Taiwan AI plays were top losers last week. Separately, the U.S. is expected to announce new tech restrictions for China this week.</li>
<li>SK Hynix is reportedly working closely with Mediatek to integrate some of its most advanced memory in Mediatek's flagship Dimensity chips. Mediatek was a top gainer last week.</li>
</ul>


TSMC and ASML will report results this week. We may get additional detail about the scope of AI-related demand as a medium-term driver for the semiconductor industry.
Many Taiwan AI plays were top losers last week. Separately, the U.S. is expected to announce new tech restrictions for China this week.
SK Hynix is reportedly working closely with Mediatek to integrate some of its most advanced memory in Mediatek's flagship Dimensity chips. Mediatek was a top gainer last week.


Taiwan Tech Weekly: TSMC & ASML Results This Week; Taiwan AI Plays Top Losers

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Kokusai Electric  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> has trimmed its IPO price from JPY1,890 to JPY1,830-1,840 per share to raise up to US$727 million. The IPO price will be determined on 16 October.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/kokusai-electric-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:113787" rel="noopener">Kokusai Electric IPO: The Bull Case</a>, <a href="https://www.smartkarma.com/insights/kokusai-electric-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:114152" rel="noopener">Kokusai Electric IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/kokusai-electric-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:114376" rel="noopener">Kokusai Electric IPO: Valuation Insights</a>. </li>
<li>Our base-case DCF valuation is JPY2,058 per share. Peers have modestly re-rated, and a lower IPO price range helps increase the IPO's attractiveness.</li>
</ul>



Kokusai Electric (6525 JP) has trimmed its IPO price from JPY1,890 to JPY1,830-1,840 per share to raise up to US$727 million. The IPO price will be determined on 16 October.
We previously discussed the IPO in Kokusai Electric IPO: The Bull Case, Kokusai Electric IPO: The Bear Case and Kokusai Electric IPO: Valuation Insights. 
Our base-case DCF valuation is JPY2,058 per share. Peers have modestly re-rated, and a lower IPO price range helps increase the IPO's attractiveness.


Kokusai Electric IPO: Lower Price Range Is Reasonable

United States

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.

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Lam Research (LRCX US)

Weekly Earnings (ASML, LRCX, TSMC, Nanya)

TSMC results came in much better than feared. Revenue was slightly weaker than expected and below consensus. This quarter's big story was margins...

Fabricated Knowledge

LRCX. China, DRAM Tailwinds Driving Modest Recovery

Q323 revenues of $3.48 billion, +8.6% QoQ. Q423 guidance of $3.7 billion suggests ongoing recovery, however, still-declining services revenue...

William Keating

October Restrictions Implications

The new clarification of the October export restrictions came out today, and as far as I can tell, it is a slight liberalization of the previous...

Fabricated Knowledge

Taiwan Tech Weekly: TSMC & ASML Results This Week; Taiwan AI Plays Top Losers

SK Hynix is reportedly working closely with Mediatek to integrate some of its most advanced memory in Mediatek's flagship Dimensity chips. Mediatek...

Vincent Fernando, CFA

Kokusai Electric IPO: Lower Price Range Is Reasonable

Kokusai has priced its IPO at the top of its IPO price range of JPY1,830-1,840 per share to raise US$724.4 million. The international offering was...

Arun George

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