Weekly Top Ten Tech Hardware and Semiconductor – Mar 10, 2024

1. Why HBM is the Hottest Thing in Memory

By Douglas O’Laughlin, Fabricated Knowledge

• Investing in semiconductors can be pretty simple if you let it be.

• At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.

• Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.

2. TSMC (2330.TT; TSM.US): Sales Should Be Gradually Increasing QoQ in 2024F; IPhone 16 Is on Schedule.

By Patrick Liao

• Taiwan Semiconductor (TSMC) (2330 TT) is ramping up its CoWoS capacity, with the aim of increasing new capacity by 32k wafer/month in the end of 2024F.
• In the second half of 2024F, the Apple (AAPL US) iPhone 16 will contribute to revenue from shipments.
• The semiconductor industry is expected to rebound in 2024F, with TSMC being one of the leaders.

3. Global Semi Sales Decline 2.3% MoM In January

By William Keating, Ingenuity

• It’s the first MoM decline in semi sales since February 2023, but it’s a seasonal thing & YoY comparisons continue to grow stronger. 
• Forecasting 10% YoY growth in 2024 semiconductor sales, in line with TSMC’s outlook
• $1 trillion in annual semiconductor sales will likely happen in 2032 based on a 7.7% CAGR over the coming decade. 

4. Taiwan Dual-Listings Monitor: Long TSMC Taiwan Shares Vs. ADR on Historically High Spread; UMC, ASE

By Vincent Fernando, CFA, Zero One

• TSMC: +22.9% ADR Premium is Near an All-Time High; Long Taiwan Shares vs. Short the ADR
• UMC: 2.2% Premium; Flipped Positive From a Discount; Likely to Contract
• ASE: +13.3%; Short the Historically High Spread at the Current Level

5. GlobalWafers (6488.TT): 1Q24F Is a Down Quarter; Anticipating a Much Better Growth Rate in 2025F.

By Patrick Liao

• The sales in January 2024 were the lowest during the period of 2022-2024, indicating a likely downtrend for the first quarter of 2024.
• Demand is expected to be flat or slightly increase in 2Q24F for GlobalWafers, which is encouraging.
• The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

6. Silicon Wafers Area Shipments Decline 14.3% YoY in 2023

By William Keating, Ingenuity

• Silicon wafers area shipments (in MSI) declined by 14.3% YoY in 2023
• Wafer revenues also declined by 10.9% to $12.3 billion over the same period
• We expect Q124 revenues to be down ~20% QoQ and anticipate a further 5% YoY decline in full year 2024 shipments

7. PC Monitor: Long Dell Vs. Short Acer Update; Dell & HPQ Results Indicate Opportunity in Asus

By Vincent Fernando, CFA, Zero One

• Dell has outperformed Acer and other Taiwan PC names Asus and MSI by a wide margin. Close Long Dell vs. Short Acer. Dell’s value gap has dissipated.
• Latest indications from Dell and HP highlight that the AI PC’s will drive upgrades from customers, but the PC recovery remains soft. AI PC impact only in 2025E.
• Dell and HPQ’s recent results provide positive color for upcoming Asus, Acer, and MSI results. Trade: Long Asus into its upcoming earnings results.