Weekly Top Ten Tech Hardware and Semiconductor – Dec 8, 2024

1. Understanding Kioxia, A Worthwhile IPO?

By Jim Handy, Objective Analysis

• Kioxia is planning to offer its IPO on 18 December 2024.  This Insight profiles Kioxia and its market.
• NAND flash, Kioxia’s product, is a commodity, and that results in dramatic price, revenue, and margin swings.
• Kioxia is in a joint venture that provides excellent scale economies which are offset by a supply agreement that amplifies troubles caused by oversupplies

2. Intel CEO Shock Resignation. What’s Going On?

By William Keating, Ingenuity

• No stated reason for Mr. Gelsinger’s shock resignation as Intel’s CEO. 
• CFO and CCG leaders named as interim co-CEO’s with the latter also assuming a newly created role as CEO of Intel’s Products (CCG, DCAI & NEX)
• It’s the beginning of the end for Intel as we used to know it

3. ASML. Class Action Lawsuit Looms As Share Price Declines 37% From Peak

By William Keating, Ingenuity

• A case against ASML being brought by the Hollywood Firefighters Pension Fund (HFPF) is now opening up into a class action lawsuit
• Claims that ASML withheld crucial information from investors in the Jan-Oct 2024 time period, e.g. impact of US sanctions, strength of the semi recovery, order backlog etc. 
• In reality, ASML warned in October 2023 that 2024 would be a zero growth year. Did the HFPF think they were kidding?

4. The Death of Intel: When Boards Fail

By Douglas O’Laughlin, Fabricated Knowledge

• If you haven’t heard the news, Pat Gelsinger is “retiring.” The reality is this was not a retirement but a firing of Pat.
• His brief stint of 1386 days was surprising because not only was he the most technically competent CEO of the last few bad apples at Intel, but he was also among the shortest.
• Pat has by no means been perfect, and the conference at UBS kind of showed the frustrations that the board likely had with Pat.

5. Intel CFO @ UBS Global Technology Conference “Core Strategy Remains Intact”

By William Keating, Ingenuity

• Earlier this week, at the UBS Global Technology Conference, Intel CFO and co-interim CEO David Zinsner declared that the company’s “core strategy remains intact”
• Recently onboarded GM of IFS Dr. Naga Chandrasekaran, explained that while 18A remains on track, there are still “many milestones” to be met before it ramps in H225
• He also admitted that 18A is more geared towards HPC, is skewed in favour of Intel Products and that 14A will likely be more suitable for the broader semiconductor ecosystem

6. Happy Thanksgiving Semicap & Semiconductors

By Douglas O’Laughlin, Fabricated Knowledge

• This is a very light note, given time constraints. It’s rumored that on Monday, we will have new export controls, which seem to be massively light.
• Importantly, they are going to exclude CXMT altogether.
• History is a pretty good guide. Almost every single export restriction has led to bad returns prior, bad returns on the week off, and positive returns almost 100% of the time 6 months after for SOXX. This applies doubly to Semicap.

7. How Important Are China Gallium, Germanium, and Antimony Bans to the US?

By Jim Handy, Objective Analysis

• China has boycotted sales of Gallium, Germanium, and Antimony, three important elements, to the US
• All three are used in the production of semiconductors, but in very small quantities.  They are also widely available from sources outside of China.
• The net impact of this boycott to the US semiconductor market should be negligible.

8. Intel’s Next CEO Will Have To Deal With An Unholy Mess. But Who Will It Be?

By William Keating, Ingenuity

• Gelsinger’s IDM 2.0 strategy will be up for debate by Intel’s BoD. Most likely it will be largely scaled back 
• The new CEO’s options will be limited by the legal agreements in place with Brookfield & Apollo, along with the restrictions imposed by the US DOC 
• Possible CEO candidates are the current Globalfoundries CEO, Tom Caulfield, former Intel board member Lip-Bu Tan and former Intel executive Stacy Smith, who recently joined Intel’s BoD

9. Taiwan Tech Weekly: Taiwan’s Space Tech Conference This Week; AI Driving New Humanoid Robot Industry

By Vincent Fernando, CFA, Zero One

• Taiwan’s Largest Space Technologies Conference Is Happening This Week– Hon Hai Is Title Sponsor Showcasing Its Satellites; We Are Also Attending
• TSMC’s 2nm Breakthrough: Kaohsiung Fab Ahead of Schedule, Apple and AMD Poised as Early Adopters
• AI Driving the Emergence of a US$2bn Humanoid Robot Market by 2027E