Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<ul>
<li>The steep part of the chip collapse has run its course, and prices are now following cost</li>
<li>Revenues will rise once demand growth fully offsets price decreases, probably in the fourth quarter</li>
<li>The market will regain profitability only after a new shortage develops, which may be the middle of 2024</li>
</ul>


The steep part of the chip collapse has run its course, and prices are now following cost
Revenues will rise once demand growth fully offsets price decreases, probably in the fourth quarter
The market will regain profitability only after a new shortage develops, which may be the middle of 2024


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Texas Instruments managed to deliver an all-around beat in the last quarter even though revenue decreased sequentially.</li><li>Analog revenue declined, embedded processing grew, and its other segment declined in line with the cyclicality in the semiconductors market.</li><li>The industrial market was flat this quarter, the automotive market was up, and personal electronics declined.</li></ul>

Texas Instruments managed to deliver an all-around beat in the last quarter even though revenue decreased sequentially.Analog revenue declined, embedded processing grew, and its other segment declined in line with the cyclicality in the semiconductors market.The industrial market was flat this quarter, the automotive market was up, and personal electronics declined.

Texas Instruments: A Mixed Performer Across Different End Markets – Key Drivers

<ul>
<li>Semiconductor revenues remain in a decline, although that decline has slowed.</li>
<li>Prices appear to have reached cost.  They should follow cost declines until a shortage returns.</li>
<li>The timing of the next shortage is still in question.</li>
</ul>


Semiconductor revenues remain in a decline, although that decline has slowed.
Prices appear to have reached cost.  They should follow cost declines until a shortage returns.
The timing of the next shortage is still in question.


Value Investing

Vladimir Dimitrov, CFA

<ul>
<li>Analog Devices has become one of the best-performing semiconductors stocks.</li>
<li>The company's strategy has certain weaknesses, but ADI remains among my top picks within the sector.</li>
<li>ADI's performance is not just a fluke and there are solid reasons behind it, such as high profitability, growth and competitive positioning.</li>
</ul>


Analog Devices has become one of the best-performing semiconductors stocks.
The company's strategy has certain weaknesses, but ADI remains among my top picks within the sector.
ADI's performance is not just a fluke and there are solid reasons behind it, such as high profitability, growth and competitive positioning.


Analog Devices: The Less Attention It Gets The Better

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 17 March. There are no constituent changes, but there are float and capping changes.</li>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor (SMH US)</a> ETF tracks the index and has an AUM of US$7.2bn.</li>
<li>Estimated one-way turnover is 4.8% resulting in a one-way trade of US$356m. The stocks are extremely liquid, the impact on the stocks in terms of ADV to trade is small.</li>
</ul>


The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 17 March. There are no constituent changes, but there are float and capping changes.
The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$7.2bn.
Estimated one-way turnover is 4.8% resulting in a one-way trade of US$356m. The stocks are extremely liquid, the impact on the stocks in terms of ADV to trade is small.


MVIS US Listed Semiconductor 25 Index Rebalance: Big Flow, Small Impact

United States

Applied Materials, Inc. develops, manufactures, markets, and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.  The Company's customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules and other electronic devices manufacturers.

QUALCOMM, Inc . manufactures digital wireless communications equipment.  The Company licenses its code division multiple access (CDMA) and orthogonal frequency division multiplexing access intellectual property to other companies, and produces CDMA-based integrated circuits; and produces equipment and software used to track workers and assets; and software for wireless content enablement.

KLA-Tencor Corporation manufactures yield management and process monitoring systems for the semiconductor industry.  The Company's systems are used to analyze product and process quality at critical steps in the manufacture of circuits and provide feedback so that fabrication problems can be identified. KLA-Tencor operates sales, service, and application centers worldwide.

Lam Research Corporation manufactures, markets, and services semiconductor processing equipment used in the making of integrated circuits.  The Company's products are used to deposit special films on a silicon wafer and etch away portions of various films to create a circuit design.  Lam sells its products around the world.

Monolithic Power Systems Inc specializes in high-performance, integrated power solutions. The Company provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications.

ON Semiconductor Corporation supplies analog, standard logic, and discrete semiconductors for data and power management. The Company's products include integrated circuits, and analog ICs. ON also offers discrete semiconductors in a variety of surface mount and standard packages.

Skyworks Solutions, Inc., a wireless semiconductor company, designs and manufactures radio frequency and complete semiconductor system solutions for mobile communications applications.  The Company provides front-end modules, radio frequency subsystems, and system solutions to wireless handset and infrastructure customers worldwide.

Microchip Technology Incorporated designs, manufactures, and markets microcontrollers, related mixed-signal and memory products, and application development systems for high-volume embedded control applications. The Company also designs, develops, and markets linear/mixed-signal, power management, and thermal management products.

Entegris Inc. provides materials management products and services to the microelectronics industry on a worldwide basis.  The Company provides products such as wafer shippers, wafer transport and process carriers, pods, and work-in-process boxes.  Entegris also provides chemical delivery products such as valves, fittings, tubing, pipe, and containers.

Analog Devices, Inc. designs, manufactures, and markets integrated circuits used in analog and digital signal processing.  The Company's products are used in communications, computer, industrial, instrumentation, military/aerospace, automotive, and high-performance consumer electronics applications.  Analog Devices sells its products worldwide.

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

Lasertec Corporation develops, designs, manufactures and markets photomask inspection systems to make semiconductor devices, confocal scanning laser microscopes and liquid crystal display (LCD) inspection systems.

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

NXP Semiconductors NV operates as a global semiconductor company. The Company designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking.  NXP offers its products to the automotive, identification, wireless infrastructure, lighting, mobile, and computing applications.

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)

Semiconductor Manufacturing International Corp (SMIC)

DISCO CORPORATION manufactures abrasive and precision industrial machinery for cutting and grinding purposes.  The Company's products are applied in the semiconductor, electronics, and construction industries to produce consumer goods such as personal computers, digital cameras, video game systems, and Digital Video Disc (DVD) players.

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

Texas Instruments Incorporated operates as a semiconductor design and manufacturing company. The Company develops analog ICs and embedded processors. Texas Instruments has manufacturing or sales operations worldwide.

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Texas Instruments (TXN US)

Where Are We in the Semiconductor Cycle?

Will the semiconductor market turn around? Revenues are likely to regain modest growth in the fourth quarter, but profits shouldn't return until...

Jim Handy

Texas Instruments: A Mixed Performer Across Different End Markets – Key Drivers

Texas Instruments managed to deliver an all-around beat in the last quarter even though revenue decreased sequentially. Analog revenue declined,...

Baptista Research

No Signs of a Chip Recovery

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Jim Handy

Analog Devices: The Less Attention It Gets The Better

Analog Devices has become one of the best-performing semiconductors stocks.The company's strategy has certain weaknesses, but ADI remains among my...

Vladimir Dimitrov, CFA

MVIS US Listed Semiconductor 25 Index Rebalance: Big Flow, Small Impact

No constituent changes, but there are float/capping changes. Estimated one-way turnover is 4.8% resulting in a one-way trade of US$356m. Stocks are...

Brian Freitas

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