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>Semiconductor collapses like today's are led by memory chips, which are a commodity</li>
<li>The leading memory manufacturers: Samsung, SK hynix, Micron, and WDC, have announced their 3Q22 earnings, with only Kioxia remaining.  All have suffered substantial revenue declines.</li>
<li>Memory prices are dropping to cost, and should remain at cost until demand catches back up with supply in late 2023</li>
</ul>


Semiconductor collapses like today's are led by memory chips, which are a commodity
The leading memory manufacturers: Samsung, SK hynix, Micron, and WDC, have announced their 3Q22 earnings, with only Kioxia remaining.  All have suffered substantial revenue declines.
Memory prices are dropping to cost, and should remain at cost until demand catches back up with supply in late 2023


Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>We expect strong Q2 results from TEL but full year earnings guidance is a risk</li>
<li>WFE demand is deteriorating rapidly. Will TEL provide any thoughts on the 2023 outlook?</li>
<li>We provide a scenario analysis for different WFE scenarios...the stock may have bottomed</li>
</ul>


We expect strong Q2 results from TEL but full year earnings guidance is a risk
WFE demand is deteriorating rapidly. Will TEL provide any thoughts on the 2023 outlook?
We provide a scenario analysis for different WFE scenarios...the stock may have bottomed


Tokyo Electron (8035) | WFE Scenarios Suggest Stock May Have Hit Bottom

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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.

<ul>
<li>Share price down 50% from its peak, discounting a downturn of historical magnitude.</li>
<li>But history also suggests that the downturn might last two years, in which case it would be too early to buy. </li>
<li>Impact of COVID lockdown fading. No impact from U.S. sanctions yet. Weaker guidance ahead, in our estimation. </li>
</ul>


Share price down 50% from its peak, discounting a downturn of historical magnitude.
But history also suggests that the downturn might last two years, in which case it would be too early to buy. 
Impact of COVID lockdown fading. No impact from U.S. sanctions yet. Weaker guidance ahead, in our estimation. 


Tokyo Electron (8035 JP): Downturn Discounted but Maybe Not Its Duration

<ul>
<li>Semiconductor revenues continue to fall. which appears to be a repeat of the collapse in 2019</li>
<li>Spot market prices, a leading indicator, are soft for both DRAM and NAND flash</li>
<li>It is likely that semiconductor revenues will end the year by returning to the trendline of their historical growth of 3.9%</li>
</ul>


Semiconductor revenues continue to fall. which appears to be a repeat of the collapse in 2019
Spot market prices, a leading indicator, are soft for both DRAM and NAND flash
It is likely that semiconductor revenues will end the year by returning to the trendline of their historical growth of 3.9%


Semiconductors Just Beginning a Long Slide

<ul>
<li>We are Bullish on Rorze, a global leader in ultra-clean wafer substrate handling solutions.</li>
<li>We believe that Rorze is well placed to monetise the long-term growth in semiconductor demand and WFE spend</li>
<li>The stock has recently underperformed its peer group and valuations collapsed. We see almost 100% upside potential based on a 14x target multiple</li>
</ul>


We are Bullish on Rorze, a global leader in ultra-clean wafer substrate handling solutions.
We believe that Rorze is well placed to monetise the long-term growth in semiconductor demand and WFE spend
The stock has recently underperformed its peer group and valuations collapsed. We see almost 100% upside potential based on a 14x target multiple


Japan

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.

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Tokyo Electron Ltd Unsp Adr (TOELY US)

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Jim Handy

Tokyo Electron (8035) | WFE Scenarios Suggest Stock May Have Hit Bottom

IF WFE spend comes in at around $70 billion, we believe that TEL's stock could be worth around 33,000 yen. Given that the stock hit a recent low of...

Mark Chadwick

Tokyo Electron (8035 JP): Downturn Discounted but Maybe Not Its Duration

Share price down 50% from its peak, largely discounting the likely size of the downturn in semiconductor capex, but perhaps not its duration....

Scott Foster

Semiconductors Just Beginning a Long Slide

The semiconductor market is falling and is likely to continue to drop through the end of the year. This presents an opportunity for shorts.

Jim Handy

Rorze (6323) | Japan Small Cap Winner

Rorze is a stock for small-cap Japan growth investors. The company is well placed to monetise the long-term growth in semiconductor demand and WFE...

Mark Chadwick

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