Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

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

<ul>
<li>Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company's AI server business is expected to take market share and its EV business is developing.</li>
<li>Asustek management provided some clarity on when AI PCs might turn from dream into reality -- 3Q24E is when the company believes they will contribute significantly to sales volume.</li>
<li>Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.</li>
</ul>


Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company's AI server business is expected to take market share and its EV business is developing.
Asustek management provided some clarity on when AI PCs might turn from dream into reality -- 3Q24E is when the company believes they will contribute significantly to sales volume.
Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.


Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>U.S. has announced new bans on PE and VC investment into key Chinese tech industries.</li>
<li>Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.</li>
<li>Apple earnings short-term trades update -- We're closing out both trades, one at a loss and one roughly flat.</li>
</ul>


U.S. has announced new bans on PE and VC investment into key Chinese tech industries.
Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.
Apple earnings short-term trades update -- We're closing out both trades, one at a loss and one roughly flat.


Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

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>There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).</li>
<li>There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.</li>
</ul>


There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.


JPX Nikkei 400 Index Rebalance: Some Big Impact Names

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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>During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).</li>
<li>Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.</li>
<li>Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.</li>
</ul>


During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).
Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.
Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.


Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS. SOX 1.9% bid as Generative AI drives bid for semis/tech hardware; Booming US Economy as GDP prints 2.4% driving yields higher; But USD weaker vs Yen on BOJ. </li>
<li>JAPAN.  NKY Futures -1% vs Cash; USDJPY 139. 5; Really all about the BOJ as the Nikkei broke news  on potential YCC tweak; Earnings deluge: -ve Shin-etsu; Fujitsu. </li>
<li>NUGGET. Tokyo Steel has more advantages than meets the eye. No need for the massive capex in the crucial process that Nippon Steel or JFE needs to put out. Bullish. </li>
</ul>


OVERSEAS. SOX 1.9% bid as Generative AI drives bid for semis/tech hardware; Booming US Economy as GDP prints 2.4% driving yields higher; But USD weaker vs Yen on BOJ. 
JAPAN.  NKY Futures -1% vs Cash; USDJPY 139. 5; Really all about the BOJ as the Nikkei broke news  on potential YCC tweak; Earnings deluge: -ve Shin-etsu; Fujitsu. 
NUGGET. Tokyo Steel has more advantages than meets the eye. No need for the massive capex in the crucial process that Nippon Steel or JFE needs to put out. Bullish. 


Ohayo Japan| AI Bid; Strong GDP->more Hikes? Stocks Drop; NUGGET: Steel Decarb-Advantage Tokyo Steel

Japan

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.

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.

ADVANTEST CORPORATION produces semiconductor testing devices and electronic measuring instruments.  The Company's products include large-scale integration (LSI) test systems, memory test systems, dynamic test handlers, network analyzers, electronic meters, optical testing devices, and signal sources.

SUMCO Corporation manufactures silicon wafers for the semiconductor industry. The Company produces silicon wafers used to produce solar batteries as well as ultra-high purity quartz used to produce vessels for silicon manufacturing process. SUMCO markets its products worldwide.

ROHM COMPANY LIMITED manufactures custom linear integrated circuits and semiconductor devices for use primarily in consumer electronics.  The Company has plants and sales offices worldwide.  Rohm's subsidiaries include Wako Electric and Apollo Electronics.

SCREEN Holdings Co Ltd.  manufactures and sell semiconductors, FPD devices, commercial printing and printed circuit boards(PCB). The company also provides additional services for its products.

RORZE CORPORATION manufactures printed circuit board conveyers and wafer handlers for semiconductor manufacturing.  The Company also produces sorters and vacuum chamber robots, as well as controllers and stepping motor drivers used in various automation systems.  Rorze provides parts replacement and repair services for its products.

TOKYO SEIMITSU CO., LTD. manufactures and sells semiconductor manufacturing equipment and measuring instruments.  The Company produces wafer probing machines, wafer dicing machines, electron beam lithography systems, wafer inspection systems, and chemical mechanical planarizers (CMP) systems.

ULVAC, Inc. manufactures vacuum devices for industries such as semiconductor, electronics, chemical, pharmaceutical and food.  The Company's products include pumps, valves, gas analyzers, leak detectors, and surface profile measurement.

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.

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.

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.

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.

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.

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Tokyo Electron (8035 JP)

Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

Also, Elan Microelectronics and ChipMOS reported strong results. The two companies represent two Longs to consider, we still see upside.

Vincent Fernando, CFA

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

There are 38 adds and 36 deletes for the JPXNK400 Index. The adds have outperformed the deletes and there is a fair bit to trade on a lot of...

Brian Freitas

Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

As Nikon is reporting earnings soon, this insight would help readers have a quick glance at the company's last quarter earnings and whether Nikon...

Shifara Samsudeen, ACMA, CGMA

Ohayo Japan| AI Bid; Strong GDP->more Hikes? Stocks Drop; NUGGET: Steel Decarb-Advantage Tokyo Steel

Strong US GDP print drive yield higher, stocks drop; NKY Futures -1% vs Cash; USDJPY 139. 5; Really all about the BOJ as the Nikkei broke news on...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market

Also -- According to media reports, Apple has bought all of TSMC's leading-edge 3nm capacity and may have exclusivity for this 3nm production...

Vincent Fernando, CFA

Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

Also, Elan Microelectronics and ChipMOS reported strong results. The two companies represent two Longs to consider, we still see upside.

Vincent Fernando, CFA

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

There are 38 adds and 36 deletes for the JPXNK400 Index. The adds have outperformed the deletes and there is a fair bit to trade on a lot of...

Brian Freitas

Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

As Nikon is reporting earnings soon, this insight would help readers have a quick glance at the company's last quarter earnings and whether Nikon...

Shifara Samsudeen, ACMA, CGMA

Ohayo Japan| AI Bid; Strong GDP->more Hikes? Stocks Drop; NUGGET: Steel Decarb-Advantage Tokyo Steel

Strong US GDP print drive yield higher, stocks drop; NKY Futures -1% vs Cash; USDJPY 139. 5; Really all about the BOJ as the Nikkei broke news on...

Mark Chadwick