Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

Equity Bottom-Up

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Investing in semiconductors can be pretty simple if you let it be.
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At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.
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Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.

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Investing in semiconductors can be pretty simple if you let it be.


At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.


Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.




Thematic (Sector/Industry)

<ul><li>The year 2023 began with a significant downturn in the semiconductor market.</li><li>Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.</li><li>Supply outpaced demand, and the market turned into a period of oversupply.</li></ul>

The year 2023 began with a significant downturn in the semiconductor market.Significant capacity additions were brought on after the historic shortages due to COVID-19, and then demand wobbled as interest rates quickly rose.Supply outpaced demand, and the market turned into a period of oversupply.

Semiconductor Outlook 2024: AI's Adolescence

<ul><li>Semicap is strong, Subsystems are not. That will change.</li><li>I think <a href="https://www.smartkarma.com/entities/mks-instruments-inc" target="_blank" data-smartkarma-citation="entities:5970" rel="noopener">Mks Instruments (MKSI US)</a>, <a href="https://www.smartkarma.com/entities/ultra-clean-holdings-inc" target="_blank" data-smartkarma-citation="entities:19849" rel="noopener">Ultra Clean Holdings (UCTT US)</a>, and <a href="https://www.smartkarma.com/entities/ichor-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26449" rel="noopener">Ichor Holdings (ICHR US)</a> are likely good 12+ month longs as NAND spending increases, and they blow out estimates for multiple quarters in a row.</li><li>The factor-driven size difference drives the opportunity, and they should benefit well on a relative basis next year.</li></ul>

Semicap is strong, Subsystems are not. That will change.I think Mks Instruments (MKSI US), Ultra Clean Holdings (UCTT US), and Ichor Holdings (ICHR US) are likely good 12+ month longs as NAND spending increases, and they blow out estimates for multiple quarters in a row.The factor-driven size difference drives the opportunity, and they should benefit well on a relative basis next year.

<ul>
<li>Another week of earnings. I will start with a summary and then go into specific bits from each company.</li>
<li>I continue to like automotive, specifically semiconductors.</li>
<li>However, despite sequentially better results, we are seeing continued weakness in automotive and meaningful weakness in Industrial</li>
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Another week of earnings. I will start with a summary and then go into specific bits from each company.
I continue to like automotive, specifically semiconductors.
However, despite sequentially better results, we are seeing continued weakness in automotive and meaningful weakness in Industrial


Earnings: ON, AMKR, RMBS, UCTT, AMD, ASMI, KLAC, MPWR, ALGM, STM, INTC

<ul>
<li>This is going to be a big week, so I’ll be as brief as I can while getting everything in one place.</li>
<li>Let’s start with Automotive, which is my favorite idea set right now. The problem is that the near-term results were much weaker than I expected, and it looks like the bottom is maybe in.</li>
<li>I was expecting another quarter of scrapping along the bottom, and Industrial weakness punched a new low.</li>
</ul>


This is going to be a big week, so I’ll be as brief as I can while getting everything in one place.
Let’s start with Automotive, which is my favorite idea set right now. The problem is that the near-term results were much weaker than I expected, and it looks like the bottom is maybe in.
I was expecting another quarter of scrapping along the bottom, and Industrial weakness punched a new low.


Earnings: NXPI, CDNS, TXN, SLAB, Alphawave, TSEM, KLAC, SK Hynix, MXL, STM, ASMI, VRT, UCTT

United States

Ultra Clean Holdings, Inc. develops and supplies critical subsystems for the semiconductor capital equipment industry, focusing on gas delivery systems. These gas delivery systems enable the precise delivery of specialty gases used in a majority of the key steps in the semiconductor manufacturing process.

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Ultra Clean Holdings (UCTT US)

Why HBM is the Hottest Thing in Memory

Micron's earnings is just a rehash of what I already talked about. Memory pricing increase is driven by HBM shifting the mix of investment there,...

Fabricated Knowledge

Semiconductor Outlook 2024: AI's Adolescence

Its time to jog your memory. We've gone through the downturn, what does an upturn look like? The year 2023 began with a significant downturn in the...

Fabricated Knowledge

Why Subsystems Now

I think MKSI, UCTT, and ICHR are likely good 12+ month longs as NAND spending increases, and they blow out estimates for multiple quarters in a row.

Fabricated Knowledge

Earnings: ON, AMKR, RMBS, UCTT, AMD, ASMI, KLAC, MPWR, ALGM, STM, INTC

Another week of earnings. I will start with a summary and then go into specific bits from each company. I continue to like automotive,...

Fabricated Knowledge

Earnings: NXPI, CDNS, TXN, SLAB, Alphawave, TSEM, KLAC, SK Hynix, MXL, STM, ASMI, VRT, UCTT

This is going to be a big week, so I’ll be as brief as I can while getting everything in one place. Let’s start with Automotive, which is my...

Fabricated Knowledge

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