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>ADR premiums for dual-listed Taiwan shares have overall been on the uptrend this week, as semiconductor industy optimism in the U.S. as increased.</li>
<li>TSMC's ADR premium appears to be trading at a new higher range in the last few months.</li>
<li>Other spreads have risen as well lately; it's probably best to wait for significant reversals, which usually happen within two weeks at most.</li>
</ul>


ADR premiums for dual-listed Taiwan shares have overall been on the uptrend this week, as semiconductor industy optimism in the U.S. as increased.
TSMC's ADR premium appears to be trading at a new higher range in the last few months.
Other spreads have risen as well lately; it's probably best to wait for significant reversals, which usually happen within two weeks at most.


Taiwan Dual-Listings: ADR Premiums on the Rise; TSMC Premium Persistently Higher Lately

<ul>
<li>Micron earnings this week, will provide insight on the outlook for the memory chip space.</li>
<li>The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.</li>
<li>Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.</li>
</ul>


Micron earnings this week, will provide insight on the outlook for the memory chip space.
The Taiwanese market has substantially lagged the surge in the Philadelphia Semiconductor Index.
Chinese firms are trying to poach engineers from TSMC and UMC by offering 2-3x their salaries.


Taiwan Tech Weekly: Micron Earnings to Provide Memory Outlook; Taiwan Vs. SOX Divergence

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

<ul>
<li>In our February 6, 2023 EM Strategy, we discussed that we were buyers of the MSCI EM (EEM-US) on a pullback to the 50-day MA. </li>
<li>The pullback went a bit deeper but managed to hold at our $37.50 line-in-the-sand which we discussed in our recent ETF Pathfinder reports (Mar. 6 and Mar. 20, 2023).</li>
<li>The EEM-US displays a bullish 2-month downtrend reversal- add exposure. Signs continue to point to a topping DXY, and a declining DXY has historically resulted in EM outperformance (vs. EAFE).</li>
</ul>


In our February 6, 2023 EM Strategy, we discussed that we were buyers of the MSCI EM (EEM-US) on a pullback to the 50-day MA. 
The pullback went a bit deeper but managed to hold at our $37.50 line-in-the-sand which we discussed in our recent ETF Pathfinder reports (Mar. 6 and Mar. 20, 2023).
The EEM-US displays a bullish 2-month downtrend reversal- add exposure. Signs continue to point to a topping DXY, and a declining DXY has historically resulted in EM outperformance (vs. EAFE).


MSCI EM $EEM 2-Month Downtrend Reversal at Support -- Add Exposure. Upgrading Taiwan to Overweight

<ul>
<li>Apple &amp; Hon Hai are lobbying for easier labor laws in India, setting the ground for a major shift of production to the country.</li>
<li>TSMC is being heavily courted by Singapore to set up a manufacturing facility in the city state.</li>
<li>Hon Hai will report earnings this week. We are structurally long the company despite potential for weak 4Q numbers.</li>
</ul>


Apple &amp; Hon Hai are lobbying for easier labor laws in India, setting the ground for a major shift of production to the country.
TSMC is being heavily courted by Singapore to set up a manufacturing facility in the city state.
Hon Hai will report earnings this week. We are structurally long the company despite potential for weak 4Q numbers.


Taiwan Tech Weekly: Apple & Hon Hai Push for India Labor Changes, Singapore Heavily Courting TSMC

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>2022 was characterised by a historically strong H1 followed by a far weaker H2</li>
<li>The current downturn is impacting memory, PC and smartphone shipments the hardest</li>
<li>2023 is shaping up to be the reverse of 2022, i.e. historically weak H1 with recovery in H2</li>
</ul>


2022 was characterised by a historically strong H1 followed by a far weaker H2
The current downturn is impacting memory, PC and smartphone shipments the hardest
2023 is shaping up to be the reverse of 2022, i.e. historically weak H1 with recovery in H2


Semiconductors: 2022 Review & 2023 Outlook

Taiwan

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

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Taiwan Semiconductor (TSMC) (2330 TT)

Taiwan Dual-Listings: ADR Premiums on the Rise; TSMC Premium Persistently Higher Lately

Other spreads have risen as well lately; it's probably best to wait for significant reversals, which usually happen within two weeks at most.

Vincent Fernando, CFA

Taiwan Tech Weekly: Micron Earnings to Provide Memory Outlook; Taiwan Vs. SOX Divergence

Micron earnings this week, will provide insight on the outlook for the memory chip space. We remain biased to be Long Micron vs. Short Nanya Tech.

Vincent Fernando, CFA

MSCI EM $EEM 2-Month Downtrend Reversal at Support -- Add Exposure. Upgrading Taiwan to Overweight

Signs continue to point to a topping $DXY, and a declining DXY has historically resulted in EM outperformance (vs. $EAFE). Many ideas in China/Hong...

Vermilion Research

Taiwan Tech Weekly: Apple & Hon Hai Push for India Labor Changes, Singapore Heavily Courting TSMC

Hon Hai results are coming out March 15th. The U.S. is also reportedly preparing even more China restrictions for semiconductor equipment.

Vincent Fernando, CFA

Semiconductors: 2022 Review & 2023 Outlook

2023 is shaping up to be the reverse of 2022, i.e. downturn continuing through H1 with recovery in H2. A lot depends on when PC and smartphone unit...

William Keating

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