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. Taiwan Dual-Listings Monitor: TSMC Continues Falling from Extreme Level; CHT at Unusual Discount
- TSMC: +11.8% Premium — Falling Closer to Its Historical Range
- ASE: +9.2% Premium; Further Breakdown Could Indicate Return to Previous Trading Range
- CHT: -1.8% Discount — Good Level to Long the Spread
2. The Data Center is the New Compute Unit: Nvidia’s Vision for System-Level Scaling
- Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.
- While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia’s presentations at GTC and OFC 2024.
- I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.
3. Will Taiwan Quake Trigger a Shortage?
- A major earthquake struck Taiwan on April 3, where 25-30% of the world’s semiconductor wafers are produced
- Most semiconductor fabs are far away from the earthquake’s epicenter
- Those companies that have issued statements indicate that damage was slight, but there is still likely to be a shortage, which should boost chip maker profitability through 2024
4. TSMC (2330.TT; TSM.US): 2Q24F Preview; TSMC Is Anticipated to Receive ~US$5Bn from the US Chip Act.
- TSMC Q2 2024 outlook is expected to increase by approximately 5% QoQ, with 2024 projected Capex to see a slight uptick.
- Intel is expected to adopt TSMC N3B technology in 2Q24F, while we anticipate that MediaTek will transition to N3E by the end of 3Q24F.
- Intel has received financial assistance of US$8 billion through the US Chips and Science Act, and TSMC is also projected to receive around US$5 billion.
5. Taiwan Tech Weekly: Quanta Surging on Nvidia Server Orders; Nanya Results Ahead; Intel Foundry Event
- Quanta surged with major server wins from Meta, Alphabet, and Amazon. Nanya Tech results are two weeks ahead and Intel will host a webinar this week about its Foundry business.
- Mediatek: Accelerating Momentum in Automotive, Data Center, and AI Memory Solutions
- Hon Hai (Foxconn): After the 50% Surge, Where Can It Go From Here?
6. Fabricated Knowledge Quarterly Review
- This is the first edition of a quarterly summary piece to highlight my ideas and best pieces quarterly.
- This is one of the 16th-best quarters in SOXX since 2002. While it’s a pretty solid showing at a 17% quarterly return, this doesn’t compare to the incredible returns in 2020 and 2023.
- Now, the misleading thing is that SMH, a broader ETF, is up 30%.
7. Intel’s New Segment Reporting. Transparency Or Obfuscation?
- Intel launched a new segment reporting structure under which its newly created Foundry P&L allegedly racked up operating losses of ~$17 billion over the past three years
- The Foundry P&L is not expected to reach breakeven until the ’27/’28 timeframe
- Intel’s share price is down >10% in the two days since the new financial model was launched.
8. Post Nvidia GTC Industry Impact: Large Quanta Server Win Just the Beginning of an Order Wave?
- Just a week after Nvidia’s GTC conference, Quanta has reportedly secured large orders for new Nvidia Blackwell-based servers from Google, Amazon AWS, and Meta.
- Other firms showcasing Nvidia servers at GTC include Wiwynn, Gigabyte, Pegatron, Asus, Hon Hai (Ingrasys), Wistron, Dell, and Super Micro. There could be a higher probability of new order wins.
- Stock Focus: Asustek — Improving outlook as a play on both AI PCs and AI servers.
9. Yaskawa (6506 JP): Start of a New Factory Automation Growth Cycle
- The outlook for factory automation is improving with inventory clearance, the upturn in the semiconductor industry and an AI-enhanced response to the labor shortage.
- Yaskawa’s margins should continue to rise with renewed growth in Robotics, efficiency gains and an upgraded product line.
- Valuation stretched at 30x EPS guidance for FY Feb-25, but current weakness looks like a long term buying opportunity.
10. Vanguard (5347.TT): A Consensus View to Build a New 12″ Fab in Singapore.
- The utilization rate for Vanguard in 1Q24F is at a recent low of 50-53%, indicating that the utilization rate is expected to increase from 2Q24 onwards.
- Vanguard should consider building a new 12″ Fab in Singapore, aligning with our potential acquisition of Taiwan Semiconductor (TSMC) – ADR (TSM US)’s 40nm and above business.
- In conclusion, the future outlook appears promising for the coming 3~4 years.
