Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech July sales are somehow below seasonal and below our expectations. If analysts start to factor in 3-4% appreciation on NT$ against US starting July, earnings prospects in 2H16 for semi and tech companies might not be as strong as market estimated earlier. In conclusion, we believe not much sales momentum left over before we see a seasonal semiconductor…

Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech July sales are somehow below seasonal and below our expectations. If analysts start to factor in 3-4% appreciation on NT$ against US starting July, earnings prospects in 2H16 for semi and tech companies might not be as strong as market estimated earlier. In conclusion, we believe not much sales momentum left over before we see a seasonal semiconductor…

Insights from Taiwan Semi/Tech July Sales

Event-Driven

We believe set up of YRST is to combine all funding resources up to US$24bn from National Integrated Circuit Industry Investment Fund, Tsinghua Unigroup, and others in future and to integrate different memory R&amp;D and production projects. Although XMC, in cooperation with Spansion, claims to have 32-layer 3D NAND technology, we are not sure XMC can be competitive on cost per die (without government's subsidies) against competitors. Spansion never was a key NAND flash player before. We thus see XMC to be just one of memory investment projects under YRST but not the only one. Under the new holding company structure, we believe YRST is likely to set up one or two new JVs with stronger NAND and DRAM technology partner like Micron. Although China is speaking out loud to ramp 300k wafers per month 3D NAND by 2020 and 1mn wafers per month by 2030, we see this almost mission impossible without a proper NAND technology partner like Micron to provide competitive design and process. Since Tsinghua Unigroup failed to acquire Micron Technology and Micron said taking three years to ramp once a JV deal is signed, we thus expect YRST still taking years to boost new NAND or DRAM supply.

We believe set up of YRST is to combine all funding resources up to US$24bn from National Integrated Circuit Industry Investment Fund, Tsinghua Unigroup, and others in future and to integrate different memory R&amp;D and production projects. Although XMC, in cooperation with Spansion, claims to have 32-layer 3D NAND technology, we are not sure XMC can be competitive on cost per die (without government's subsidies) against competitors. Spansion never was a key NAND flash player before. We thus see XMC to be just one of memory investment projects under YRST but not the only one. Under the new holding company structure, we believe YRST is likely to set up one or two new JVs with stronger NAND and DRAM technology partner like Micron. Although China is speaking out loud to ramp 300k wafers per month 3D NAND by 2020 and 1mn wafers per month by 2030, we see this almost mission impossible without a proper NAND technology partner like Micron to provide competitive design and process. Since Tsinghua Unigroup failed to acquire Micron Technology and Micron said taking three years to ramp once a JV deal is signed, we thus expect YRST still taking years to boost new NAND or DRAM supply.

Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways suggest strengths in foundry, fabless, and display vendors to drive Taiwan semi sales recovery of 17% y/y in June and 8 out 12 vendors reported a beat on 2Q16 sales guidance. Despite the strengths, we saw weaknesses in power amplifier, touch panel, and solar vendors and our semi leading indicator fell to 8% in June 2016 from this year peak of 31% in…

Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways suggest strengths in foundry, fabless, and display vendors to drive Taiwan semi sales recovery of 17% y/y in June and 8 out 12 vendors reported a beat on 2Q16 sales guidance. Despite the strengths, we saw weaknesses in power amplifier, touch panel, and solar vendors and our semi leading indicator fell to 8% in June 2016 from this year peak of 31% in…

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)

Insights from Taiwan Semi/Tech July Sales

Despite recent strong performance (17% ytd) across US and Taiwan semiconductor index, we are turning a bit cautious here because Taiwan Semi/Tech...

Andrew Lu

Another Look at China NAND Expansion

We believe set up of YRST is to combine all funding resources up to US$24bn from National Integrated Circuit Industry Investment Fund, Tsinghua...

Andrew Lu

Points from Taiwan Semi/Tech 2Q Sales

Starting July 14, 2016, TSMC will first report 2Q16 results and provide 3Q16 guidance to kick off semi/tech earnings season. Our report takeaways...

Andrew Lu

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