Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>Due to reduced seasonal demand, 4Q24 shipments will decrease by 10% to 12% (QoQ, while the average selling price (ASP) will increase by 3% to 5% QoQ.</li>
<li>Vanguard's investment in <a href="https://www.smartkarma.com/entities/episil-holdings-inc" target="_blank" data-smartkarma-citation="entities:7688:1" rel="noopener">Episil Holdings (3707 TT)</a> is focused on the 8" SiC process, indicating Vanguard's ventures into the 8" SiC foundry sector in the near future.</li>
<li>Vanguard is confident in maintaining a minimum DPS policy of NT$4.5</li>
</ul>


Due to reduced seasonal demand, 4Q24 shipments will decrease by 10% to 12% (QoQ, while the average selling price (ASP) will increase by 3% to 5% QoQ.
Vanguard's investment in Episil Holdings (3707 TT) is focused on the 8" SiC process, indicating Vanguard's ventures into the 8" SiC foundry sector in the near future.
Vanguard is confident in maintaining a minimum DPS policy of NT$4.5


Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

<ul>
<li>Vanguard’s 4Q24 revenue is expected to drop by mid-to-high single digits, with GM at about 27-28%.</li>
<li>For the products segment wise, the PMIC (power management IC) remains stable, while the Display Driver IC may decline by mid-teens QoQ.  </li>
<li>The Chinese government seems to be subsidizing local fabless orders, raising concerns about the sustainability of the current prosperity and the possibility of excess inventory in the near future.</li>
</ul>


Vanguard’s 4Q24 revenue is expected to drop by mid-to-high single digits, with GM at about 27-28%.
For the products segment wise, the PMIC (power management IC) remains stable, while the Display Driver IC may decline by mid-teens QoQ.  
The Chinese government seems to be subsidizing local fabless orders, raising concerns about the sustainability of the current prosperity and the possibility of excess inventory in the near future.


Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/taiwan-semiconductor-sp-adr" target="_blank" data-smartkarma-citation="entities:8587:1" rel="noopener">Taiwan Semiconductor (TSMC) - ADR (TSM US)</a> invests over 3.7 billion in <a href="https://www.smartkarma.com/entities/vanguard-international-semi" target="_blank" data-smartkarma-citation="entities:16011:1" rel="noopener">Vanguard Intl Semiconductor (5347 TT)</a> to increase its holdings to 27%.</li>
<li>Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard's investment in its first 12-inch factory in Singapore yesterday.</li>
<li>Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.</li>
</ul>



Taiwan Semiconductor (TSMC) - ADR (TSM US) invests over 3.7 billion in Vanguard Intl Semiconductor (5347 TT) to increase its holdings to 27%.
Taiwanese authorities, specifically the Investment Commission of the Ministry of Economic Affairs, approved Vanguard's investment in its first 12-inch factory in Singapore yesterday.
Regarding the outlook for 4Q24, we believe it is still evolving, and our current estimate is a ~5% quarter-on-quarter decline.


Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

<ul>
<li>We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  </li>
<li>
<a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> and <a href="https://www.smartkarma.com/entities/monolithic-power-systems-inc" target="_blank" data-smartkarma-citation="entities:2088:1" rel="noopener">Monolithic Power Systems, Inc (MPWR US)</a> are gradually increasing demand volume in 2Q24 and 3Q24.  </li>
<li>Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  </li>
</ul>


We expect Vanguard's utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  

Qualcomm Inc (QCOM US) and Monolithic Power Systems, Inc (MPWR US) are gradually increasing demand volume in 2Q24 and 3Q24.  
Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  


Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

<ul>
<li>The 4Q24 is slightly on the downside, and we are currently adopting a somewhat conservative approach.  </li>
<li>Visibility extends for no more than 3 months, and any increase in demand is primarily driven by urgent orders.</li>
<li>As for the upcoming 12" Fab, which is in collaboration with <a href="https://www.smartkarma.com/entities/nxp-semiconductors-nv" target="_blank" data-smartkarma-citation="entities:9801:1" rel="noopener">Nxp Semiconductors Nv (NXPI US)</a>, it has commenced local recruitment efforts in Singapore.</li>
</ul>


The 4Q24 is slightly on the downside, and we are currently adopting a somewhat conservative approach.  
Visibility extends for no more than 3 months, and any increase in demand is primarily driven by urgent orders.
As for the upcoming 12" Fab, which is in collaboration with Nxp Semiconductors Nv (NXPI US), it has commenced local recruitment efforts in Singapore.


Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

Taiwan

Vanguard International Semiconductor Corporation offers integrated circuit foundry services.  The Company manufactures 0.18um logic, mixed-signal, analog, high voltage, low power, CMOS RF, flash, embedded memory, and bipolar CMOS DMOS semiconductors.

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Vanguard Intl Semiconductor (5347 TT)

Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.

Patrick Liao

Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

TSMC boosts investment in Vanguard to 27%, Taiwanese authorities approve Vanguard's investment in Singapore factory, 4Q24 outlook shows potential...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

Due to slightly downside 4Q24, with visibility limited to 3 months and demand driven by urgent orders. Recruitment for upcoming 12" Fab in...

Patrick Liao

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Vanguard (5347.TT): 4Q24 Outlook Is a Bit Better, but Investment in EPISIL Isn't a near Term Payback

​4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Patrick Liao

Vanguard (5347.TT): 4Q24 Outlook Is Lower than Consensus; DDIC Is Declining.

​Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.

Patrick Liao

Vanguard (5347.TT): TSMC Invests over 3.7 Billion in Vanguard to Increase Its Holdings to 27%.

TSMC boosts investment in Vanguard to 27%, Taiwanese authorities approve Vanguard's investment in Singapore factory, 4Q24 outlook shows potential...

Patrick Liao

Vanguard (5347.TT): The Utilization to Improve over 70% in 3Q24.

​Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...

Patrick Liao

Vanguard (5347.TT): The Outlook of 4Q24 Seems a Bit Softer.

Due to slightly downside 4Q24, with visibility limited to 3 months and demand driven by urgent orders. Recruitment for upcoming 12" Fab in...

Patrick Liao

4Q24 shipments to decrease by 10-12% due to reduced demand, while ASP will increase by 3-5%. Vanguard's investment in Episil focuses on 8" SiC...

Vanguard's 4Q24 revenue expected to drop, Chinese government subsidies raise concerns about sustainability and excess inventory.

Vanguard's utilization expected to improve as demand volume increases for Qualcomm Inc and Monolithic Power Systems, Inc in 2Q24 and 3Q24, despite...