Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

<ul>
<li>The WiFi technology was dominated by <a href="https://www.smartkarma.com/entities/broadcom-corp-cl-a" target="_blank" data-smartkarma-citation="entities:999:1" rel="noopener">Broadcom Corp Cl A (BRCM US)</a>, but <a href="https://www.smartkarma.com/entities/mediatek-inc" target="_blank" data-smartkarma-citation="entities:772:1" rel="noopener">Mediatek Inc (2454 TT)</a> has to break into the PC and smartphone markets in 2024F.</li>
<li>There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.</li>
<li>MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.</li>
</ul>


The WiFi technology was dominated by Broadcom Corp Cl A (BRCM US), but Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F.
There are speculations that Apple might use MediaTek's WiFi 7 solution in 2024F or consider MediaTek as a potential chip provider.
MediaTek will be using 6nm technology for WiFi 7, replacing the current 28nm technology used for WiFi 6.


MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

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

<ul>
<li>We believe TSMC represents defensive exposure to AI for investors concerned that many other AI-related stocks' valuations may be too high.</li>
<li>While one may think TSMC seems too obvious as a play, we note that the stock is up only 4.5% over the last six months.</li>
<li>We view TSMC as trading at an inexpensive valuation; even a cheap valuation should our hypothesis that the stock is structurally re-rating upwards turn out to be true.</li>
</ul>


We believe TSMC represents defensive exposure to AI for investors concerned that many other AI-related stocks' valuations may be too high.
While one may think TSMC seems too obvious as a play, we note that the stock is up only 4.5% over the last six months.
We view TSMC as trading at an inexpensive valuation; even a cheap valuation should our hypothesis that the stock is structurally re-rating upwards turn out to be true.


TSMC: Defensive AI Play in Long Upward Re-Rating Trend?

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales</li>
<li>By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.</li>
<li>We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.</li>
</ul>


By offering 15k and 30k/m 3nm capacity by 4Q24/4Q25 to Intel, TSMC will see Intel becoming one of its top 3 customers by accounting for 12% of TSMC 2025 sales
By leveraging 3nm outsourcing, Intel will have incremental sales/capacity growth of 19-20% per year by accounting for 28%/44% of sales in 2024/2025, beating consensus' 14%/9% y/y sales growth for 2024/2025.
We estimate 30-35% 5 years EPS CAGR for Intel, driven by TSMC's 2/3nm foundry support, lower cost and process R&amp;D, lower capex and depreciation cost, and AI PC CPU launch.


A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

<ul>
<li>Nvidia Results Today U.S. Time -- Taiwan Market Surged Recently on Improving AI/Semiconductor Expectations and Potential for Easing U.S.-China Tensions.</li>
<li>Taiwan: Underowned, Yet Gaining on Peers. Our Fellow Insight Provider Analyzes Why Taiwan Might Still Be Underowned.</li>
<li>Asia Geopolitics: Following Biden-Xi Meeting, Asia Is a Safer Place For Now.</li>
</ul>


Nvidia Results Today U.S. Time -- Taiwan Market Surged Recently on Improving AI/Semiconductor Expectations and Potential for Easing U.S.-China Tensions.
Taiwan: Underowned, Yet Gaining on Peers. Our Fellow Insight Provider Analyzes Why Taiwan Might Still Be Underowned.
Asia Geopolitics: Following Biden-Xi Meeting, Asia Is a Safer Place For Now.


Taiwan Tech Weekly: Nvidia Results Today; Taiwan Market Surged But Why It Might Be Still Underowned

<ul>
<li>More y/y improvement (or decline deceleration) for PC/server, power management IC (PMIC), CMOS sensor/touch controller, GaAs RF/VCSEL, gaming GPU card, memory, and foundry vendors</li>
<li>GaAs RF/VCSEL and gaming GPU card vendors saw very impressive sales growth, driven by new phones introduction and rush orders to use NVIDIA RTX 4090 gaming card for AI training.</li>
<li>Stronger than expected Oct for TSMC and Gigabyte might drive 4Q sales and near term share price upside; Visera, Andes Tech, and AP Memory might see sales and price downside.</li>
</ul>


More y/y improvement (or decline deceleration) for PC/server, power management IC (PMIC), CMOS sensor/touch controller, GaAs RF/VCSEL, gaming GPU card, memory, and foundry vendors
GaAs RF/VCSEL and gaming GPU card vendors saw very impressive sales growth, driven by new phones introduction and rush orders to use NVIDIA RTX 4090 gaming card for AI training.
Stronger than expected Oct for TSMC and Gigabyte might drive 4Q sales and near term share price upside; Visera, Andes Tech, and AP Memory might see sales and price downside.


What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

Taiwan

Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs.  The Company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.  Taiwan Semiconductor is an affiliate of Philips Electronics N.V.

Taiwan Semiconductor (TSMC) - ADR (TSM US)

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Taiwan Semiconductor (TSMC) - ADR (TSM US)

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

TSMC: Defensive AI Play in Long Upward Re-Rating Trend?

We view TSMC as trading at an inexpensive valuation; even a cheap valuation should our hypothesis that the stock is structurally re-rating upwards...

Vincent Fernando, CFA

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC? Intel needs TSMC foundry services more than TSMC needs Intel as a foundry...

Andrew Lu

Taiwan Tech Weekly: Nvidia Results Today; Taiwan Market Surged But Why It Might Be Still Underowned

NVIDIA Corp (NVDA US) will report today U.S. time with its analyst call at 14:00 PDT, we are maintaining our Short basket of Taiwan AI names vs....

Vincent Fernando, CFA

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales? PC/server, PMIC, CMOS sensor/touch controller, GaAs RF, gaming GPU card, memory...

Andrew Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MediaTek (2454.TT): The WiFi 7 Chip Competition Is Likely to Become Fierce in 2024.

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. ​In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...

Patrick Liao

TSMC: Defensive AI Play in Long Upward Re-Rating Trend?

We view TSMC as trading at an inexpensive valuation; even a cheap valuation should our hypothesis that the stock is structurally re-rating upwards...

Vincent Fernando, CFA

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC?

A Turnaround Story for Intel by Accelerating 3nm Outsourcing to TSMC? Intel needs TSMC foundry services more than TSMC needs Intel as a foundry...

Andrew Lu

Taiwan Tech Weekly: Nvidia Results Today; Taiwan Market Surged But Why It Might Be Still Underowned

NVIDIA Corp (NVDA US) will report today U.S. time with its analyst call at 14:00 PDT, we are maintaining our Short basket of Taiwan AI names vs....

Vincent Fernando, CFA

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales

What Early Indicators from the Reported Oct 23 Taiwan Semi Sales? PC/server, PMIC, CMOS sensor/touch controller, GaAs RF, gaming GPU card, memory...

Andrew Lu

Mediatek Inc (2454 TT) has to break into the PC and smartphone markets in 2024F. In 2024, MediaTek aims to potentially supplying WiFi 7 chips to...