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. Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
- MSFT’s new AI features for Windows will need computers with at least 16GB of DRAM to run effectively. MSFT is asking manufacturers for this as a minimum for AI models.
- MSFT announced Copilot Pro for individuals and small businesses last week. The desire to use generative AI and the minimum required DRAM will drive accelerated PC upgrades.
- We note relative strength in 16GB DRAM prices; In Memory space, we continue to see relative value in SK Hynix, however, Nanya has the opportunity to Outperform in Taiwan.
2. Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV
- Blended ASP of decline of 1% q/q in the past two quarters in 2H23, better than 3-10% q/q decline during 3Q22-2Q23, resulting in Tesla’s blended ASP decline to decelerate.
- Due to Tesla’s cost cutting efforts with nice inventory control, we calculates profits/EV rebounded nicely by 21% q/q to US$3,490 per EV in 4Q23, much nicer than no profits.
- Good improvement on its FSD Beta version 12.1.2 lately might become a pure profits/EV boost by incremental subscription of US$10,000-15,000 per EV or monthly fee by existing Tesla owners.
3. ASML Guides Q124 Down 27% QoQ, Shares Surge >8%. What Gives?
- ASML reported Q423 revenues of €7.2 billion, up 7.5% QoQ and ~€100 million above the guided midpoint for the quarter.
- ASML guided Q124 at €5.25 billion, down a very significant 27% sequentially. Also reiterated their previous forecast for 2024 revenues to be remain flat with 2023
- ASML shares surged >8% in overnight trading. What’s going on here?
4. Are You Confused About What Intel and UMC Are Working Together?
- What production fabs and capacity? Intel’s Arizona 10nm Fab 12, 22, 32, which are mostly depreciated. Intel will provide nearly 30k/m 12″ capacity for UMC at the first stage.
- Who’s 12nm node and design rule? UMC’s tsmc-like 12nm design rule for customers to produce WiFi 7, TV controller, and other products.
- Other discussions include: “Who will operate the fabs?”, “How to share sales/profits?”, “Mass production time?”, “Why benefits to Intel?”, “Why benefits to UMC?”, “Will TSMC get hurt?”
5. What SK Hynix’s Latest Results Indicate for PC & Mobile Makers into 2025E, Including Apple
- SK Hynix results surpised consensus with a swing to positive operating profit; The company expects industry demand growth to exceed supply growth by a wide margin in 2024E.
- Management suggests optimism not just for 2024E, but also for 2025E. 2025E is when a much larger positive demand impact from AI is expected as AI products will expand substantially.
- SK Hynix comments regarding AI phones imply that consumers will most likely need to upgrade their phones, including iPhones, to take full advantage of AI capabilities
6. A R&D Director Dr. Young Was at TSMC, SMIC, and Intel Foundry Shared Views on 3-1nm Competitions
- With a strong 20A/18A team, Intel might take some CPU shares back from AMD to affect TSMC but reduce geopolitical tensions from the US after Intel returning to the best.
- SMIC can use DUV to do 3nm but different from others’ because Moore’s law is no longer using circuit line width but to use performance, power, density to determine 3nm.
- New fabless industry opportunities are emerging in middle east countries, and south east Asia countries like Vietnam. Despite high cost issues, global expansion will help TSMC to attract global talents.
7. First Run of Tech/Semis’ Guidance Tells Us What Industries and Companies to Avoid
- Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.
- Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.
- We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.
8. From Dec N.A. SEMI Equipment Billings to Expect a Sales Raise for Applied Materials and Lam Research
- Applied guided -1% q/q and Lam Research guided 8% q/q sales growth, below N.A. front end semi equipment billings’ 12% q/q growth, room for analysts to raise their 4Q23E sales.
- N.A. front end equipment sales reached US$3.775bn, up 1% m/m, down 5% y/y but back end equipment billings reached US$222mn in December, down 8% m/m and down 9% y/y.
- Better than equipment vendors, WSTS/SIA reported November sales of US$48bn, up 3% m/m and up 5% y/y (the first month to turn positive after 14 months of consecutive y/y decline)
9. Intel Ruins The Rally With Its Gloomy Guide
- Q423 revenues of $15.4 billion, +8.5% QoQ, +10% YoY and $300 million above the guided midpoint
- Q124 guided to $12.7 billion, -17.5% QoQ albeit still up 8% YoY.
- Intel’s share priced fell 12% on the guide. CEO says this was an overreaction.
10. Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events
- Taiwan Tech Plays Have Soared Since TSMC’s Strong Outlook, and SK Hynix Reported a Return to Op Profit
- Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
- Key Upcoming Events — Intel, Microsoft, Mediatek, UMC Results Ahead
