Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>Major memory names have fallen with the recent market concerns and only staged a small reboound due to Nvidia's bullish results.</li>
<li>NAND and DRAM price declines have stabilized. Demand for DRAM from servers is expected to exceed that from mobile devices, driven by AI usage.</li>
<li>We see relative value in Micron vs. Nanya Technology and SK Hynix. SK Hynix is ahead of the game for AI, and Nanya offers focused DRAM exposure however.</li>
</ul>


Major memory names have fallen with the recent market concerns and only staged a small reboound due to Nvidia's bullish results.
NAND and DRAM price declines have stabilized. Demand for DRAM from servers is expected to exceed that from mobile devices, driven by AI usage.
We see relative value in Micron vs. Nanya Technology and SK Hynix. SK Hynix is ahead of the game for AI, and Nanya offers focused DRAM exposure however.


Memory Monitor: SK Hynix Appearing Prescient; Relative Value in Micron

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>Global semi sales for the month of June 2023 amounted to $41.5 billion, +1.7% MoM but still down ~17% YoY.</li>
<li>Nanya reported monthly revenue for July 2023 of NT$ 2,437 million, a slight decrease MoM and still down 44.5% YoY:</li>
<li>For the YTD through July, ASPEED’s revenue is down 47% YoY. This translates into a similar percentage decrease in global server sales YoY in 2023. </li>
</ul>


Global semi sales for the month of June 2023 amounted to $41.5 billion, +1.7% MoM but still down ~17% YoY.
Nanya reported monthly revenue for July 2023 of NT$ 2,437 million, a slight decrease MoM and still down 44.5% YoY:
For the YTD through July, ASPEED’s revenue is down 47% YoY. This translates into a similar percentage decrease in global server sales YoY in 2023. 


Semiconductor Events Deserving Your Attention @ 7/8/23

<ul>
<li>We visited Micron's advanced A3 semiconductor fab in Taichung, Taiwan last Friday. Micron is committed to expanding leading edge capacity in Taiwan.</li>
<li>Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was accelerating its recovery.</li>
<li>We reiterate our Nanya Long trade and believe it can now run further given improving industry signals. Nanya presents pure-play exposure to a DRAM turn-around accelerated by AI demand.</li>
</ul>


We visited Micron's advanced A3 semiconductor fab in Taichung, Taiwan last Friday. Micron is committed to expanding leading edge capacity in Taiwan.
Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was accelerating its recovery.
We reiterate our Nanya Long trade and believe it can now run further given improving industry signals. Nanya presents pure-play exposure to a DRAM turn-around accelerated by AI demand.


Memory Monitor: Our Site Visit to Micron's A3 Fab in Taiwan; AI Accelerating the Cycle Recovery

<ul>
<li>We had a call with ChipMOS management about their latest long-term R&amp;D efforts and drivers. </li>
<li>We see many of the company's key clients' businesses turning a corner, hence see these developments likely to benefit ChipMOS.</li>
<li>The company will be reporting earnings on August 3rd, we have an Outperform rating for the shares. Could see some continued margin weakness, however we believe forward outlook is improving.</li>
</ul>


We had a call with ChipMOS management about their latest long-term R&amp;D efforts and drivers. 
We see many of the company's key clients' businesses turning a corner, hence see these developments likely to benefit ChipMOS.
The company will be reporting earnings on August 3rd, we have an Outperform rating for the shares. Could see some continued margin weakness, however we believe forward outlook is improving.


ChipMOS: Results Ahead & Key Clients for Display and Memory Signal a Turn Around Is Happening

<ul>
<li>Nanya Tech management extrapolated on their recent results call that they believe 2Q23 was the bottom for the DRAM cycle.</li>
<li>We've updated our Nanya Tech financial model and estimates; we still see a short-term trade back to Nanya Tech's mid-June high. However, Elan Microelectronics is a Long with more edge.</li>
<li>While Nanya's comments indicated a more delayed recovery for Memory than Micron's recent guidance, overall the industry for Micron, SK Hynix, and Samsung appears to be turning a corner.</li>
</ul>


Nanya Tech management extrapolated on their recent results call that they believe 2Q23 was the bottom for the DRAM cycle.
We've updated our Nanya Tech financial model and estimates; we still see a short-term trade back to Nanya Tech's mid-June high. However, Elan Microelectronics is a Long with more edge.
While Nanya's comments indicated a more delayed recovery for Memory than Micron's recent guidance, overall the industry for Micron, SK Hynix, and Samsung appears to be turning a corner.


Memory Monitor: Nanya Management Provides More Color on DRAM Cycle Bottom; Elan a Long W/ More Edge

Taiwan

Nanya Technology Corp. manufactures and markets dynamic random access memories (DRAMs).  The Company sells its products in Taiwan and exports worldwide.

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Nanya Technology (2408 TT)

Memory Monitor: SK Hynix Appearing Prescient; Relative Value in Micron

NAND and DRAM price declines have stabilized. Demand for DRAM from servers is expected to exceed that from mobile devices, driven by AI usage.

Vincent Fernando, CFA

Semiconductor Events Deserving Your Attention @ 7/8/23

Global semi sales for June '23 ~$41.5 billion, +1.7% MoM, -17% YoY. Nanya July 2023 revenue NT$ 2,437 million, -1% MoM, -44.5% YoY. ASPEED YTD...

William Keating

Memory Monitor: Our Site Visit to Micron's A3 Fab in Taiwan; AI Accelerating the Cycle Recovery

Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was...

Vincent Fernando, CFA

ChipMOS: Results Ahead & Key Clients for Display and Memory Signal a Turn Around Is Happening

We had a call with ChipMOS management about the company's latest long-term research efforts and drivers. The shares appear well supported into an...

Vincent Fernando, CFA

Memory Monitor: Nanya Management Provides More Color on DRAM Cycle Bottom; Elan a Long W/ More Edge

While Nanya's comments indicated a more delayed recovery for Memory than Micron's recent guidance, overall the industry for Micron, SK Hynix, and...

Vincent Fernando, CFA

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