Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively.</li>
<li>Vanguard has about 30% capacity utilized by TSMC’s foundry products. In technology deliverables, Vanguard also competes with TSMC for manufacturing excellence, which creates an internal competition.</li>
<li>Vanguard has dealt with their clients to share the expansion cost. Certainly, there is almost no such trust-worthy partnership, except Vanguard who has TSMC to back up.</li>
</ul>


In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively.
Vanguard has about 30% capacity utilized by TSMC’s foundry products. In technology deliverables, Vanguard also competes with TSMC for manufacturing excellence, which creates an internal competition.
Vanguard has dealt with their clients to share the expansion cost. Certainly, there is almost no such trust-worthy partnership, except Vanguard who has TSMC to back up.


Vanguard (5347.TT): 8" Capacity Tightness with TSMC Standing Behind as Actionable

<ul>
<li>The GlobalWafers announced the deal to merge Siltronic did not get the approval by Germany government this morning. <strong>We maintain our Target Price for GlobalWafers doesn’t change at NT$880~960.</strong>
</li>
<li>The GlobalWafers points out that the results will not influence business activities, and the European market remains the importance for GlobalWafers.</li>
<li>
<strong>Comparing to 20s years ago, we think the semiconductor market has experienced a dramatic changes already</strong>.</li>
</ul>


The GlobalWafers announced the deal to merge Siltronic did not get the approval by Germany government this morning. We maintain our Target Price for GlobalWafers doesn’t change at NT$880~960.

The GlobalWafers points out that the results will not influence business activities, and the European market remains the importance for GlobalWafers.

Comparing to 20s years ago, we think the semiconductor market has experienced a dramatic changes already.


GlobalWafers (6488.TT): Maintain Target Price at NT$880-960 for Siltronic Mergence Failed

<ul>
<li>MediaTek's 4Q21/1Q22 revenue/GM is NT$128.65bn/49.6% and NT$136.35bn(+/-5.15bn)/49.5%(+/-1.5%) resp. Our previous estimate of 4Q21 is in short of NT$1.05bn/2.1% resp., and 1Q22 revenue/GM is at the low limit of guidance resp.</li>
<li>MediaTek will keep leading in the smartphone area, including 4G/5G for ~700mn in 2022. The 5G penetration rate will be from 35-40% in 2021 to be 50% in 2022.</li>
<li>Dividend payout ratio will be 80~85%, and it will be NT$72~76 for 2021. It will be a NT$16 of the special dividend in the coming 4 years.</li>
</ul>


MediaTek's 4Q21/1Q22 revenue/GM is NT$128.65bn/49.6% and NT$136.35bn(+/-5.15bn)/49.5%(+/-1.5%) resp. Our previous estimate of 4Q21 is in short of NT$1.05bn/2.1% resp., and 1Q22 revenue/GM is at the low limit of guidance resp.
MediaTek will keep leading in the smartphone area, including 4G/5G for ~700mn in 2022. The 5G penetration rate will be from 35-40% in 2021 to be 50% in 2022.
Dividend payout ratio will be 80~85%, and it will be NT$72~76 for 2021. It will be a NT$16 of the special dividend in the coming 4 years.


MediaTek (2454.TT): 4Q21 Results/ 1Q22 Outlook- It's a Bit of Beyond Expectation as Actionable

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

<ul>
<li>Intel is promising is that it will advance five process nodes over the next four years, recapturing process leadership from TSMC by 2025, but significantly underspending TSMC in capex.</li>
<li>Overearning in datacenter is unwinding, leading to lower profits...overearning in PCs will unwind in 2022, leading to lower profits.</li>
<li>Lower profits and higher capex means less buybacks to support earnings growth. </li>
</ul>


Intel is promising is that it will advance five process nodes over the next four years, recapturing process leadership from TSMC by 2025, but significantly underspending TSMC in capex.
Overearning in datacenter is unwinding, leading to lower profits...overearning in PCs will unwind in 2022, leading to lower profits.
Lower profits and higher capex means less buybacks to support earnings growth. 


Intel 4Q21: Our Capex Is More Valuable than TSMC’s

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Event-Driven

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-01-25/nvidia-is-said-to-quietly-prepare-to-abandon-takeover-of-arm" target="_blank" rel="noopener"> Bloomberg reported</a> overnight that Nvidia was moving to accept reality and give up on the Arm merger. </li>
<li>This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. </li>
<li>It also highlights the overall negative environment for Softbank’s traditional business “strategy”.</li>
</ul>



 Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. 
This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. 
It also highlights the overall negative environment for Softbank’s traditional business “strategy”.


Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

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)

Vanguard (5347.TT): 8" Capacity Tightness with TSMC Standing Behind as Actionable

In our estimate, Vanguard’s 4Q21 revenue/GM is NT$12.6bn/46.3%, and 1Q22 revenue/GM is NT$12.3bn/46.1% respectively. Vanguard dealt with clients to...

Patrick Liao

GlobalWafers (6488.TT): Maintain Target Price at NT$880-960 for Siltronic Mergence Failed

The GlobalWafers announces the deal to merge Siltronic did not get the approval by Germany government this morning. We maintain our target price...

Patrick Liao

MediaTek (2454.TT): 4Q21 Results/ 1Q22 Outlook- It's a Bit of Beyond Expectation as Actionable

MediaTek will lead in the smartphone area, including 4G/5G for ~700mn in 2022. The 5G penetration rate will be from 35-40% in 2021 to be 50% in...

Patrick Liao

Intel 4Q21: Our Capex Is More Valuable than TSMC’s

Intel's coming Analyst Day must have an earnings reset. Heightened spending and capex will remove buyback support for EPS growth and the longer...

Aaron Gabin

Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. This highlights the overall negative...

Mio Kato

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