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. Why Tesla Shows Post Results Rebound of over 10%?
- Again, Tesla reports a 1Q24 sales with 4% miss but post market share price up more than 10% for 6 reasons. 1. Gross margin was stable on 15% sales drop;
- 2. ASP was stable; 3. Affordable EV on track for 2025; 4. Factory expansion to slow; 5. Optimus to sell end of 2025; 6. 2024 EV shipment higher than 2023.
- Near term risks to remain: 1. When will margin trough? 2. Why bother to buy EV if 2nd hand market collapsing? 3. Will Robotaxi/FSD bring in meaningful sales/profits soon?
2. TSMC Just Provided Substantial Visibility into Their Long-Term Growth Estimate; ASML Adds Color
- TSMC and ASML reported 1Q24 results last week; both stocks have fallen post results, impacted by global concerns despite a strong outlook for these two leaders into 2025E.
- TSMC guided for strong growth not just in 2024E, but if one digs into management’s comments, they actually provided strong visibility into their 2028E internal revenue expectations.
- For ASML, its EUV product business is the key indicator to watch. We believe TSMC shares will continue to re-rate even through a period of global economic softness.
3. TSMC, ASML, VAT Group, and Alphawave Earnings
- It’s time for the main event: earnings are upon us. As is customary, let’s start with TSMC, move to ASML and Alphawave, and then discuss VAT Group.
- TSM revenue is above guidance, gross margins are a bit ahead of the midpoint, and operating margins are at the high end of guidance.
- First, while this is a good result, semiconductors are due for a correction. I wrote about this in March, and SOXX has quietly crept downwards since then.
4. Taiwan Dual-Listings Monitor: TSMC Breaks Down From Extreme, UMC Discount Near Historical Low
- TSMC: +9.2% Premium, Major Breakdown From Previous Historically Extreme High
- UMC: -1.9% Discount, Is Near Low End of Historical Range
- ASE: +10.4%; ADR Short Interest Jumps to Very High Level vs. History
5. Intel Is Shifting Focus to Products, Away from Manufacturing/Foundry; Worth to Follow?
- Intel misses 1H24 market consensus again, post market correction of over 7%. Can shifting focus away from foundry/manufacturing help?
- Is the breakdown change for future spin off/IPO of foundry/manufacturing, and non focus businesses like Altera and Mobileye positive?
- We disagree Intel foundry to breakeven in two years; we see AI product lagging behind competitors and non AI server CPU being squeezed by AI server GPU and GPU/CPU integration.
6. Lasertec (6920 JP): Further to Fall
- Lasertec has dropped more than 20% in the past week and a half, but is still selling at more than 60x EPS guidance for FY Jun-24.
- Weak orders at ASML, disappointing guidance from TSMC and doubts about Intel’s equipment purchases cast doubt on Lasertec’s growth potential.
- Between December 2021 and June 2022, Lasertec’s share price dropped by more than 50%. Wait for Q3 results before reaching for a falling knife.
7. Q124 Tesla & Meta: Compare & Contrast
- Tesla had a dismal quarter but Musk told a fairy tale about RoboTaxis and Robots and the markets rejoiced
- Meta had a beat & raise quarter but Zuckerberg told the truth about the fact that it would take time to monetise their AI investments and the markets recoiled
- Markets are on edge and big moves either way can be expected post earnings
8. SK Hynix: AI Is Still the Main Driver
- SK hynix earnings were announced, with a 10% Q/Q revenue increase driving a 734% increase in operating profit
- Although the company cited AI demand as the basis for this, its DRAM revenues, which are very AI dependent, increase very little
- NAND SSD demand increased significantly, with a 30% increase in revenues, largely attributable to price increases
9. Taiwan Tech Weekly: Semi/AI Darlings Slammed; TSMC Supply Chain Insights; ASE Wins Key IPhone Order
- Taiwan Tech Shares Fell Sharply Along With Global Selling — Semiconductor and AI Names Most Exposed
- What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?
- ASE Technology Holding (3711 TT) Wins iPhone 16 System-in-Package Order from Apple (AAPL US)
10. Memory Monitor: What SK Hynix Sees For PC and Server Markets Ahead; TSMC’s Strength Vs. Samsung
- SK Reports Massive Margin Rebound; Nanya Tech’s Financial Performance Appears Relatively Weak in Perspective
- AI Applications Now Translating Into Rising Solid-State Memory (SSD) Demand
- SK Povided Positive Color for Taiwan PC Names; New TSMC Collaboration Highlights TSMC Strength vs. Samsung
