Weekly Top Ten Tech Hardware and Semiconductor – Mar 23, 2025

1. Intel. Mr. Tan’s Greatest Challenge Is Not Process Or Foundry Leadership. It’s Something Far Bigger

By William Keating, Ingenuity

• Whether Intel can achieve Process or Foundry leadership in a credible timeframe is something Mr. Tan has relatively little control over in the short term.
• His most pressing challenge will be to address the corporate culture of entitlement that’s rife throughout the company, starting with the BoD
• Measure his success by the number of high profile resignations we see in the coming months. Those who created Intel’s problems cannot be the ones to fix them. 

2. Tokyo Electron (8035 JP): Buy if You’re Not Afraid of Recession

By Scott Foster, LightStream Research

• After dropping by half, Tokyo Electron’s share price has bounced. But it is still vulnerable to cutbacks in AI-related investments and tariff-induced recession.
• A positive scenario has net profit rising by 8% in FY Mar-26. In a negative scenario, it drops by 25%. We take the positive view.
• Innovations in manufacturing point toward a big step up in profit margins by the end of the decade. But watch out for a cyclical downturn between now and then.

3. Taiwan Dual-Listings Monitor: TSMC Spread Rebounds; ChipMOS Local Short Interest Spiking

By Vincent Fernando, CFA, Zero One

• TSMC: +19.4% Premium; Consider Shorting if Spread Rises Above 20%
• ASE: +0.5% Premium; Ideally Wait for Lower Level But Near-Zero Still a Long Opportunity
• ChipMOS: -0.8% Discount; Wait for More Extreme Levels; Short Interest Spiking in Local Shares

4. Semiconductors. Key Indicator Updates, 2024 In Review, 2025 Forecasts

By William Keating, Ingenuity

• Global semiconductor sales for the month of January 2025 hit $56.5 billion, an increase of 17.9% YoY, but down 1.7% MoM
• TSMC is also off to an excellent start in 2025. YTD revenues through February are up 39.2%.
• 2025 Semi forecast? Think 2024 without the memory boom and way more volatility

5. Taiwan Tech Weekly: Mediatek Wins Google AI Chip from Broadcom; Hon Hai to Expand U.S. Production

By Vincent Fernando, CFA, Zero One

• Google Diversifying from Broadcom to Mediatek for Next Generation AI Chip
• Hon Hai CEO: Clients’ U.S.-Based Tech Manufacturing Set To Expand
• Memory Monitor: Multiple Reports Indicate Rising NAND & DRAM Prices

6. Intel (INTC.US): Exploring a Tough Journey. (III)

By Patrick Liao

• Intel Corp (INTC US) has hired Mr. Lip-Bu Tan as the new CEO effective March 18th. He was formerly a board member of Intel before resigning in June 2024.
• The A18 technology node marks a new beginning for Intel Corp (INTC US), which is believed to be the new hope, but we approach it with caution.
• Intel Corp (INTC US) should focus on developing its own technology and also consider using Taiwan Semiconductor (TSMC) – ADR (TSM US) as an insurance policy.  

7. Memory Monitor: Multiple Reports Indicate Rising NAND & DRAM Prices

By Vincent Fernando, CFA, Zero One

• Key Memory Names Have Rebounded; Micron and SK Hynix Lead
• NAND Flash Memory Prices to Increase; NAND Flash Pricing to Improve in 2H25E
• Memory Monitor Universe: NAND Flash Price Improvement Favors Long SK Hynix and Micron vs. Short Nanya Tech

8. Micron 2QF25 Earnings Call Positive, But Tread with Caution

By Jim Handy, Objective Analysis

• Micron’s strong HBM and Data Center growth has nearly offset low revenues in the remainder of the company’s business.
• This HBM growth depends heavily upon continued strength in hyperscale data center AI CapEx
• Micron outlined means to maintain stability in its industry, but China semiconductor goals are in conflict with these measures

9. MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

By Scott Foster, LightStream Research

• Japan’s top defense and aerospace contractor is being rerated to account for the limits on relying on the U.S. for defense in an alarming national security environment.
• A reasonably optimistic scenario brings MHI’s P/E ratio down to 22X in FY Mar-28, by which time Japan’s defense spending is scheduled reach 2% of GDP.
• The Trump administration wants Japan to spend more, but getting the budget through the national Diet is difficult enough as it is. 

10. Micron. HBM Gets Even Better, NAND Gets Even Worse

By William Keating, Ingenuity

• Micron this week reported revenues of $8.1 billion, down 8% QoQ but up 38% YoY, and at the top end of the guided range
• Micron is expecting to reach an annual run rate of $7.8 billion by Q425. Wow!
• NAND is headed for yet another downturn after six quarters of sequential growth.