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

Equity Bottom-Up

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>Q424 revenue forecast of $26.5 billion, up 13% QoQ and the highest Q3 to Q4 revenue jump since Q4 2017</li>
<li>Demand for AI acceleration is real and just beginning. According to a key customer of theirs, "demand right now is just insane"</li>
<li>Overseas fabs progressing well with Arizona yielding well and on track for high volume production in early 2025</li>
</ul>


Q424 revenue forecast of $26.5 billion, up 13% QoQ and the highest Q3 to Q4 revenue jump since Q4 2017
Demand for AI acceleration is real and just beginning. According to a key customer of theirs, "demand right now is just insane"
Overseas fabs progressing well with Arizona yielding well and on track for high volume production in early 2025


Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Main positive surprise in 3Q24 is a sharp margins expansion, reflecting Utilization increase. OP 9% above Consensus.</li>
<li>Main positive surprise in 4Q24 guidance: high QoQ revenue growth at 13%, which suggests further Utilization increase and TSMC could beat its margins guidance again.  </li>
<li>Net Income growth is accelerating in 2H24 to ~55% YoY. The stock is not that expensive, we estimate trading at 17.2x 2025 and 13.8x 2026 EPS.</li>
</ul>


Main positive surprise in 3Q24 is a sharp margins expansion, reflecting Utilization increase. OP 9% above Consensus.
Main positive surprise in 4Q24 guidance: high QoQ revenue growth at 13%, which suggests further Utilization increase and TSMC could beat its margins guidance again.  
Net Income growth is accelerating in 2H24 to ~55% YoY. The stock is not that expensive, we estimate trading at 17.2x 2025 and 13.8x 2026 EPS.


TSMC: 3Q24 Large Beat, Guidance Better, the Stock Is Not Expensive

Taiwan Tech Focused Senior Analyst

Patrick Liao

<ul>
<li>4Q24 Guidance: Sales will be US$26.1-26.9bn, up 13%; GM outlook will be 57-59%; and OPM outlook is 46.5-48.5%</li>
<li>AI revenue contribution will triple and reach mid-teens sales contribution this year. Almost every AI innovator cooperates with TSMC.</li>
<li>APT will grow above the corporate average in the next five years.GM is approaching the corporate average, but it's not the same currently.</li>
</ul>


4Q24 Guidance: Sales will be US$26.1-26.9bn, up 13%; GM outlook will be 57-59%; and OPM outlook is 46.5-48.5%
AI revenue contribution will triple and reach mid-teens sales contribution this year. Almost every AI innovator cooperates with TSMC.
APT will grow above the corporate average in the next five years.GM is approaching the corporate average, but it's not the same currently.


TSMC (2330.TT; TSM.US): 4Q24 Outgrowth; Co-Work with Almost AI Innovators.

<ul>
<li>September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.</li>
<li>Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.</li>
<li>Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase</li>
</ul>


September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.
Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.
Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase


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

<ul>
<li>The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. </li>
<li>With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   </li>
<li>AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.</li>
</ul>


The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. 
With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   
AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.


All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

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)

TSMC Q324 Earnings Key Takeaways

Q424 revenue forecast of $26.5 billion, up 13% QoQ and the highest Q3 to Q4 revenue jump since Q4 2017. According to a key customer, demand for AI...

William Keating

TSMC: 3Q24 Large Beat, Guidance Better, the Stock Is Not Expensive

Margins expansion from 3Q24 reflects Utilization finally picking up, driving gross margins up. Yet, utilization is only at ~80% in 3Q24 when 10...

Nicolas Baratte

TSMC (2330.TT; TSM.US): 4Q24 Outgrowth; Co-Work with Almost AI Innovators.

TSMC's 4Q24 guidance shows strong sales growth, with AI revenue set to triple and contribute significantly to overall sales. APT expected to...

Patrick Liao

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

TSMC Q324 Earnings Key Takeaways

Q424 revenue forecast of $26.5 billion, up 13% QoQ and the highest Q3 to Q4 revenue jump since Q4 2017. According to a key customer, demand for AI...

William Keating

TSMC: 3Q24 Large Beat, Guidance Better, the Stock Is Not Expensive

Margins expansion from 3Q24 reflects Utilization finally picking up, driving gross margins up. Yet, utilization is only at ~80% in 3Q24 when 10...

Nicolas Baratte

TSMC (2330.TT; TSM.US): 4Q24 Outgrowth; Co-Work with Almost AI Innovators.

​TSMC's 4Q24 guidance shows strong sales growth, with AI revenue set to triple and contribute significantly to overall sales. APT expected to...

Patrick Liao

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for ​Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

TSMC's 4Q24 guidance shows strong sales growth, with AI revenue set to triple and contribute significantly to overall sales. APT expected to...

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...