Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<ul>
<li>Another major earnings week with AMD, Qualcomm, Apple, Acer, Winbond, Wistron, Micro-Star, and more.</li>
<li>Hon Hai could terminate its investment deal in U.S.-based Lordstown Motors as per an exchange notice posted by Lordstown.</li>
<li>AMD reportedly transfers some 4nm chip business to Samsung from TSMC.</li>
</ul>


Another major earnings week with AMD, Qualcomm, Apple, Acer, Winbond, Wistron, Micro-Star, and more.
Hon Hai could terminate its investment deal in U.S.-based Lordstown Motors as per an exchange notice posted by Lordstown.
AMD reportedly transfers some 4nm chip business to Samsung from TSMC.


Taiwan Tech Weekly: Another Major Earnings Week; Hon Hai Deal Exit? AMD Transfers Orders to Samsung

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/international-business-machines-corp" target="_blank" data-smartkarma-citation="entities:1064:1" rel="noopener">International Business Machines (IBM US)</a> , <a href="https://www.smartkarma.com/entities/marvell-technology-inc" target="_blank" data-smartkarma-citation="entities:15837:1" rel="noopener">Marvell Technology (MRVL US)</a> and <a href="https://www.smartkarma.com/entities/jtekt-corp" target="_blank" data-smartkarma-citation="entities:12197:1" rel="noopener">JTEKT Corp (6473 JP)</a>   </li>
<li>For the twenty-three weeks since inception ended 28 April the combined innovation portfolio was +3.3%, versus DJIA+1.0%, S&amp;P500+5.1%, Nasdaq+9.7%, Russell2000 -4.4%, MSCI-ACWI-ETF+6.5%, S&amp;P midcap 400 -0.8%, all in US$ terms</li>
<li>The innovation small-cap and midcap portfolios continue to outperform relative benchmarks, However, the willful omission of the mega cap tech names has been a drag on the large cap portfolio. </li>
</ul>


The three companies we write about this week are International Business Machines (IBM US) , Marvell Technology (MRVL US) and JTEKT Corp (6473 JP)   
For the twenty-three weeks since inception ended 28 April the combined innovation portfolio was +3.3%, versus DJIA+1.0%, S&amp;P500+5.1%, Nasdaq+9.7%, Russell2000 -4.4%, MSCI-ACWI-ETF+6.5%, S&amp;P midcap 400 -0.8%, all in US$ terms
The innovation small-cap and midcap portfolios continue to outperform relative benchmarks, However, the willful omission of the mega cap tech names has been a drag on the large cap portfolio. 


The Innovations Portfolios - Week Twenty Three

<ul>
<li>SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a 'two-track recovery' for different parts of the chip industry.</li>
<li>SK Hynix's inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.</li>
<li>Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.</li>
</ul>


SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a 'two-track recovery' for different parts of the chip industry.
SK Hynix's inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.
Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.


Memory Monitor: SK Hynix & Samsung Losses & Conservative Guidance Indicate Two-Track Chip Recovery

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

<ul>
<li>Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09</li>
<li>Strong sales of flagship S23 smartphones helped avert an otherwise inevitable overall group operating loss.  </li>
<li>Outlook for the current quarter is for more of the same, albeit the bottom line will depend on the extent (if any) of memory inventory write-downs. </li>
</ul>


Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09
Strong sales of flagship S23 smartphones helped avert an otherwise inevitable overall group operating loss.  
Outlook for the current quarter is for more of the same, albeit the bottom line will depend on the extent (if any) of memory inventory write-downs. 


Samsung. When Your Cash Cow Turns Into Your Achilles Heel.

<ul>
<li>Taiwan’s UMC, the world’s third largest foundry, reported Q1’23 revenues of NT$54.2 billion, a decrease of 20.1% QoQ and a 14.5% YoY, in line with expectations</li>
<li>Q2'23 forecasted flat sequentially, outperforming TSMC's outlook for a 6.5% QoQ decline</li>
<li>Management foresees recovery being slower than previously anticipated and to admits to having very limited visibility into H2'23</li>
</ul>


Taiwan’s UMC, the world’s third largest foundry, reported Q1’23 revenues of NT$54.2 billion, a decrease of 20.1% QoQ and a 14.5% YoY, in line with expectations
Q2'23 forecasted flat sequentially, outperforming TSMC's outlook for a 6.5% QoQ decline
Management foresees recovery being slower than previously anticipated and to admits to having very limited visibility into H2'23


UMC. Calling Q1'23 The Trough Despite Limited Forward Visibility

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

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Samsung Electronics (SMSN LI)

Taiwan Tech Weekly: Another Major Earnings Week; Hon Hai Deal Exit? AMD Transfers Orders to Samsung

Hon Hai could terminate its investment deal in U.S.-based Lordstown Motors as per an exchange notice posted by Lordstown.

Vincent Fernando, CFA

The Innovations Portfolios - Week Twenty Three

The innovation small-cap +5.6% versus Russell2000 -4.4% and innovation midcap portfolio +4.1% versus S&P 400 midcap -0.8% continue to outperform.

Pyari Menon

Memory Monitor: SK Hynix & Samsung Losses & Conservative Guidance Indicate Two-Track Chip Recovery

SK Hynix's inventory metrics worsened while Micron appears to be managing inventory better than peers. We see more evidence of a 'two-track...

Vincent Fernando, CFA

Samsung. When Your Cash Cow Turns Into Your Achilles Heel.

Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09. Strong S23 sales saved the day. Outlook is for more of the same, albeit the...

William Keating

UMC. Calling Q1'23 The Trough Despite Limited Forward Visibility

Q1’23 revenues of NT$54.2 billion, a decrease of 20.1% QoQ and a 14.5% YoY, in line with expectations. Recovery slower than previously anticipated,...

William Keating

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