Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), United Microelectron Sp Adr, Novatek Microelectronics Corp, WRKR, Lasertec Corp, MotorK Ltd, Gorilla Technology Group and more

• Latest Performance: Taiwan AI Names Keep Flying; ASE & Mediatek Lose Steam After Reporting
• Largest Display Driver Maker in the World’s Guidance Implies Growth Reversal Coming in Feb & March
• TSMC and Samsung Will Keep Their Most Advanced Chipmaking at Home

• UMC’s Q423 results in line with expectations. Q124 guidance, down 2-3% QoQ, demonstrates ongoing headwinds for foundry
• Intel, UMC foundry partnership helps the latter overcome their 14nm issues while giving them bargain basement access to US manufacturing capacity 
• If Intel could have developed and deployed the proposed 12nm specialty process on their own, they would have….

• Novatek reported over 20% YoY growth for 4Q23 and slightly beat expectations but the latest guidance implies growth to reverse to a sales contraction in the latter part of 1Q24E.
• Gross and operating margins are guided to contract; nevertheless, inventory dropped to one of the lowest levels since COVID and is expected to remain healthy.
• Novatek’s latest results appear to signal that while inventory levels are healthy, the demand growth rebound for display drivers that started in June 2023E could lose steam in 1Q24E.

• 4Q23 surpassed the guidance for revenue, GM, and OPM. 4Q23 EPS reached NT$8.76, compared to NT$10.46 in 3Q23 and NT$6.64 in 4Q22.
• 1Q24F is typically the traditional low season for consumer electronics, and there are fewer working days during the Lunar New Year.
• It is expected that the dividend payout ratio this year will be similar to previous years, which has been higher than 80% in the past few years.

• Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
• (ASX:LNK) has moved from ‘discovery and planning’ payments ($425k in H1 FY24) to a full feature trial with a named super fund (REST).
• We now expect onboarding during Q1 FY25, a quarter behind previous assumptions. Link has announced an MoU to extend its contract with Australian Super out until 2028 (from June 2025). 

• KLA had a rare miss. The guidance was a bit light for the inspection execution machine.
• KLA rarely misses and is by far the best financially managed of the large-cap semicap companies.
• KLA reports Q2 EPS $6.16 ex-items vs FactSet $5.91

MotorK closed FY23 with annual recurring revenue (ARR) of €34.1m, a 39% increase from the prior year. While both the Retail and Enterprise segments grew over the year, Enterprise ARR more than doubled to make up 22% of year-end ARR. Net revenue retention (NRR) above 100% for both segments highlights the ongoing adoption of multiple products across the group’s existing customer base. The company continues to target positive cash EBITDA in FY24. We maintain our forecasts pending FY23 results on 5 March.

• Gorilla Technology reported a strong first nine months of 2023, with adjusted EBITDA of $13.4 million versus a $4 million loss for the same period the previous year.
• The stock closed up 96% after the earnings release.
• The profit turnaround was driven by: (1) revenue growth of more than 100% to $38.0 million for nine months (analysts were expecting $21.8 million); and (2) an increase in gross margin from 33.2% a year ago to 76.5% for the nine-month period.