Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>Reports emphasizing that SMIC fell short of 3Q expectations don't make much sense. The real test starts this quarter with 7nm smart phone processors for Huawei in mass production.</li>
<li>Profits are under pressure from low capacity utilization, rising depreciation and continued high investment. Cash flow is adequate. The balance sheet is sound.</li>
<li>The share price dropped 6.8% on Friday after rising 44% from late August to early November. 4Q guidance points to near-zero operating and net profit. Recovery will take time.</li>
</ul>


Reports emphasizing that SMIC fell short of 3Q expectations don't make much sense. The real test starts this quarter with 7nm smart phone processors for Huawei in mass production.
Profits are under pressure from low capacity utilization, rising depreciation and continued high investment. Cash flow is adequate. The balance sheet is sound.
The share price dropped 6.8% on Friday after rising 44% from late August to early November. 4Q guidance points to near-zero operating and net profit. Recovery will take time.


SMIC (SEHK: 00981; SSE Star Market: 688981): Back to Reality

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>Based on the some judgments, SMIC consider it will be relatively flat demand in 2024F.</li>
<li>SMIC took into consideration geopolitical instability and allowed equipment vendors to submit orders in advance. </li>
<li>Currently, only a few manufacturers are stockpiling smartphones in response to this wave. The overall industry remains relatively stable.</li>
</ul>


Based on the some judgments, SMIC consider it will be relatively flat demand in 2024F.
SMIC took into consideration geopolitical instability and allowed equipment vendors to submit orders in advance. 
Currently, only a few manufacturers are stockpiling smartphones in response to this wave. The overall industry remains relatively stable.


SMIC (981.HK): Probably A Double U-Shape Correction for Around 2 Years Until the End of 2024F.

Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>Takeaways post model updated: 1. most foundries miss 4Q23 but y/y decline to decelerate; 2. y/y sales passed the trough but utilization later; 3. wafer shipment down 18-20% in 2023;</li>
<li>More takeaways: 4. different mix with different price; 5. some are defensive this year, some might have larger upside for 2024; 6. gross margin still falling and capex cut needed.</li>
<li>
<strong>Automotive/Industrial lags only not beginning of the fall</strong>: Smartphone, pc, consumer/IOT foundry orders might recover earlier than automotive/industrial for 2-3 quarters, resulting fablesses in these area to outperform.</li>
</ul>


Takeaways post model updated: 1. most foundries miss 4Q23 but y/y decline to decelerate; 2. y/y sales passed the trough but utilization later; 3. wafer shipment down 18-20% in 2023;
More takeaways: 4. different mix with different price; 5. some are defensive this year, some might have larger upside for 2024; 6. gross margin still falling and capex cut needed.

Automotive/Industrial lags only not beginning of the fall: Smartphone, pc, consumer/IOT foundry orders might recover earlier than automotive/industrial for 2-3 quarters, resulting fablesses in these area to outperform.


Takeaways Post Our Global Foundry Model Updated and Initial View on 2024

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

<ul><li>Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.</li><li>Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.</li><li>Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.</li></ul>

Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.

Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says 

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

<ul>
<li>Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.</li>
<li>At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.</li>
<li>Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure &amp; ominous-sounding LTA "True Up" on the horizon. </li>
</ul>


Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.
At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.
Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure &amp; ominous-sounding LTA "True Up" on the horizon. 


GlobalFoundries Pops On Q323 Earnings. But Why?

China

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

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Semiconductor Manufacturing International Corp (SMIC) (981 HK)

SMIC (SEHK: 00981; SSE Star Market: 688981): Back to Reality

3Q results should not have been a negative surprise. Sales and profits down sharply on low capacity utilization, intro of 7nm, high depreciation...

Scott Foster

SMIC (981.HK): Probably A Double U-Shape Correction for Around 2 Years Until the End of 2024F.

Based on the some judgments, SMIC consider it will be relatively flat demand in 2024F. SMIC took into consideration geopolitical instability and...

Patrick Liao

Takeaways Post Our Global Foundry Model Updated and Initial View on 2024

Seven takeaways Post Our Global Foundry Model Updated and Initial View on 2024 foundry shipment, blended wafer price, sales, and capex growth/decline

Andrew Lu

Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says

Qualcomm Inc. ’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive...

Caixin Global

GlobalFoundries Pops On Q323 Earnings. But Why?

Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure & an ominous-sounding LTA...

William Keating

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