This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Early Sign of AI GPU Market Inflection Point?
- Taiwan Dell said “AI GPU shortage issue has been resolved. The lead time has been cut from 40 weeks by the end of 2023 to 8-12 weeks or less now.
- We see this news short term positive but medium term negative to AI GPU supply chain vendors but need more information to confirm if this is an inflection point.
- 1. Taiwan Dell got priority supply? 2. Earlier overbooking over? 3. Lead time cut by supply upside? 4. Cooling company said the same; 5. Will lead time continue to shrink?
2. TSMC (2330.TT; TSM.US): US$6.6bn from US CHIPS Act; the Earthquake Impact and the 2nd Japanese Fab.
- Today, the U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms for US$6.6 billion in direct funding under the CHIPS and Science Act.
- We estimate the impact of the earthquake on April 3rd should result in a loss of within 0.5% in 2Q24F, which means it should not affect our 2Q24F revenue expectations.
- TSMC’s 1st Japan Fab is expected to commence pilot production in February, and the 2nd Fab is projected to begin production of N6/N7 in 2027F.
3. Early Signs from the Reported March/1Q24 Taiwan Semi/Tech Sales
- Y/Y improvement for LCD, PMIC, GaAs RF, gaming card, cooling system, semi equipment&material, semi fab construction, memory, and foundry vendors but more y/y deterioration for WiFi and CMOS sensor vendors
- After 6 vendors beating consensus, we might see AI server supply chain, large panel LCD driver, WiFi/networking, and NAND flash vendors in US to report a better than expected 1Q24.
- We might see 8″/12″ raw wafer (like Shin Etsu, SUMCO , National Silicon Industry, Siltronic AG) vendors in Japan, China, and Germany to report a worse than expected 1Q24.
4. Beaten Down Semiconductor Could be AI Play
- Maxlinear has probably been among this semiconductor cycle’s worst companies, if not the worst.
- I think that it might be time to give them a fresh look.
- Maxlinear was founded in 2003 in Carlsbad, California, by eight engineers. Today, Kishore Seendripu (CEO/Chairmen) and Curtis Ling (CTO) are still founders and work at the company. Maxlinear is a fabless company focused on mixed-signal products in the semiconductor industry.
5. TSMC Snags US CHIPS Act Funding & Ups The Ante On Intel
- TSMC snags $6.6 billion in US CHIPS Act funding, along with loans up to $5 billion and tax credits up to 25% on eligible capital expenditures
- TSMC has committed to building a third fab in Arizona, scheduled to begin operations around 2030
- TSMC’s reiteration of their world class CAGR, Gross Margin & ROE numbers shines a light on Intel’s vastly inferior performance outlook.
6. Taiwan Tech Weekly: TSMC Wins Major U.S. Support; Nanya Results; UMC Rush Orders
- TSMC (2330.TT; TSM.US): US$6.6bn from US CHIPS Act; the Earthquake Impact and the 2nd Japanese Fab.
- Memory Monitor: Nanya’s Results to Provide Latest Color on DRAM Post Earthquake; Short Int Rising
- UMC (2303.TT; UMC.US): Some Rush Orders Coming in and 2Q24F Could Post Positive QoQ.
7. Memory Monitor: Nanya’s Results to Provide Latest Color on DRAM Post Earthquake; Short Int Rising
- DRAM producer Nanya Tech will report its 1Q24E results on April 10th.
- While Micron has said it is evaluating the impact of the Taiwan earthquake on its operations and has halted price discussions with clients, Nanya could provide latest DRAM outlook color.
- Short interest has spiked ahead of Nanya’s results; We note that the company has a large revenue and margin rebound it needs to deliver on to meet 2024E consensus.
8. UMC (2303.TT; UMC.US): Some Rush Orders Coming in and 2Q24F Could Post Positive QoQ.
- United Microelectronics Corp (2303 TT)‘s 2Q24F outlook is experiencing a slight upward now, possibly indicating a positive QoQ.
- UMC’s notable contributors are showing a mixed outlook, and Novatek Microelectronics Corp (3034 TT) could be the most influencer.
- Attention should be paid to the 3Q24F outlook for any potential changes and a shift from a bearish view could positively impact the outlook, potentially signaling the end of downturn.
9. Nanya. Tailwinds Mount Albeit Profits Still Elude
- Nanya’s quarterly revenue was NT$ 9.5 billion, up 9.2% QoQ & up 47.9% YoY
- Nanya still had a net loss of NT$1.2 billion, its sixth loss making quarter in a row
- Larger peers doubling down on HBM, structural reduction in memory wafer capacity & shortages likely triggered by Taiwan earthquake are all mounting tailwinds for Nanya
10. Nanya Technology Sees DRAM Industry Pricing Rising Through 2024E; But Is Underperforming Financially
- Latest Nanya Tech results showed weak margin rebound. Gross margin rebounded but remained below zero.
- Nanya expects DRAM pricing improvement through 2024E; due to demand for AI related memory products reducing capacity for other DRAM products rather than improvement for Nanya’s main Consumer segment.
- Micron is reportedly increasing prices post Taiwan earthquake and this is positive, but we see Nanya’s 2024E consensus margin expectations set at a high bar and the stock isn’t cheap.
