Daily Brief TMT/Internet: Micron Technology, United Microelectron Sp Adr, Dell Technologies , Esker SA and more

• Memory stocks underperformed the market, falling sharply with the recent overall market rout and failing to rebound sufficiently with the latest market rally.
• Leading Memory names Micron, SK Hynix, Samsung are all substantially below their 52-week highs after market reports of slowing memory demand from PC and mobile industries and inventory liquidation.
• Taiwan names Nanya Tech, Silicon Motion, Phison are all we below their highs. Micron results on September 25th MT will provide a major outlook update for the market.

• Micron’s latest results show a clear improvement in the Memory cycle. The company’s gross margin increased and guided for a further strong margin increase next quarter.
• Micron increased its overall DRAM industry growth forecast while maintaining its NAND flash forecast. Micron reiterated expectations for FY2025E to deliver record revenue for the company, with improving profitability.
• Positive news for fallen Memory industry shares — Within our Memory universe we have Structural Long ratings for Micron Technology (MU US), SK Hynix (000660 KS), and Silicon Motion Technology (SIMO US).

• Given UMC’s partnership with Intel to produce chips using Intel’s 12nm fab capacity, we believe latest Intel developments increase the opportunity for Intel Foundry to take a stake in UMC.
• Intel’s Foundry business makes a strong partner for UMC who has deep foundry experience and talent, but doesn’t have leading edge fabs nor the balance sheet to build them.
• If Intel Foundry Services spins out or Intel strengthens its balance sheet through a deal with Qualcomm/Apollo, the potential for a deeper UMC-Intel Foundry partnership becomes even more compelling.

• Aug 2024 Notebook shipments on track for delivery with tracking information soon. Apple MR device facing possible upgrade to 1,500 PPI OLED display.
• Automotive CIS tech set to advance by 2024. Taiwan offers permanent residence to address talent shortage in AI industry.
• UK showcases compound semiconductor strength and collaboration with Taiwan. Henkel expands semiconductor focus in India for market growth.

Alongside its H124 results, Esker confirmed that Bridgepoint, in association with General Atlantic and management shareholders, is proposing a cash public tender offer for the company at €262 per share. This represents a 30% premium to the unaffected share price on 8 August. The supervisory board has welcomed the principle of the offer. If the tender offer is successful (ie 60% or more of shares are tendered), the deal is expected to complete in late Q424 or early Q125.