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

Himax Technologies Inc Adr / Equity Bottom-Up

<ul>
<li>Automotive display driver IC leader Himax reported 1Q24 results last week that were ahead of guidance. The company also guided for rising margins.</li>
<li>Management believes 1Q24 represents a cyclical bottom for the company's financial performance and expects automotive demand to rise in 2H24E.</li>
<li>Himax rallied but remains 55% below its 2021 highs, yet its market opportunity larger than ever. Himax could be benefitting from different positioning within automotive chips than NXP &amp; Infineon.</li>
</ul>


Automotive display driver IC leader Himax reported 1Q24 results last week that were ahead of guidance. The company also guided for rising margins.
Management believes 1Q24 represents a cyclical bottom for the company's financial performance and expects automotive demand to rise in 2H24E.
Himax rallied but remains 55% below its 2021 highs, yet its market opportunity larger than ever. Himax could be benefitting from different positioning within automotive chips than NXP &amp; Infineon.


Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

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>Its a quarter too soon to go dumpster diving in the automotive semiconductor industry. Another round of cuts is likely coming. Consider this my earnings preview.</li><li><p>I have leaned bearish automotive semiconductors for a few months, and I think the call has been mostly correct.</p></li><li><p>For me, the beginning of my bearishness started when I highlighted that China would try to murder the supply aspect of the market for the foreseeable future</p></li></ul><div data-component-name="DigestPostEmbed"><a href="https://www.fabricatedknowledge.com/p/chinese-evs-and-the-lagging-edge" target="_blank" rel="noopener"></a></div>

Its a quarter too soon to go dumpster diving in the automotive semiconductor industry. Another round of cuts is likely coming. Consider this my earnings preview.I have leaned bearish automotive semiconductors for a few months, and I think the call has been mostly correct.For me, the beginning of my bearishness started when I highlighted that China would try to murder the supply aspect of the market for the foreseeable future

Hitting the Breaks: Automotive Semiconductors

Asia and Global Semiconductor and Tech Research

Andrew Lu

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.</li>
<li>
<strong>No more Moore's Law</strong>: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.</li>
<li>Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.</li>
</ul>


TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.

No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

<ul>
<li>We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.</li>
<li>Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.</li>
<li>We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.</li>
</ul>


We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.
Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.
We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.


TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

<ul>
<li>Qualcomm's latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results' key implications for Mediatek.</li>
<li>Qualcomm's 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.</li>
<li>Qualcomm confirmed Mediatek's view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.</li>
</ul>


Qualcomm's latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results' key implications for Mediatek.
Qualcomm's 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.
Qualcomm confirmed Mediatek's view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.


Key Insights from Qualcomm's Latest Data; Mediatek Taking Market Share?

Netherlands

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.

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Nxp Semiconductors Nv (NXPI US)

Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...

Vincent Fernando, CFA

Hitting the Breaks: Automotive Semiconductors

Its a quarter too soon to go dumpster diving in the automotive semiconductor industry. Another round of cuts is likely coming. Consider this my...

Fabricated Knowledge

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

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Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

​Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...

Vincent Fernando, CFA

Hitting the Breaks: Automotive Semiconductors

Its a quarter too soon to go dumpster diving in the automotive semiconductor industry. Another round of cuts is likely coming. Consider this my...

Fabricated Knowledge

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

Key Insights from Qualcomm's Latest Data; Mediatek Taking Market Share?

We deep dive into Qualcomm's latest results and the key take-aways relative to Mediatek. Overall, we find the latest QCOM results as positive for...

Vincent Fernando, CFA

Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...