Weekly Top Ten Tech Hardware and Semiconductor – May 26, 2024

1. Nvidia Up Sharply Again – Can This Last?

By Jim Handy, Objective Analysis

• Nvidia announced another sharp sales increase to $26 billion in quarterly revenues
• The company’s growth is far greater than hyperscaler CapEx growth, as standard servers yield to AI servers: Bad news for Intel & AMD
• Some of this may stem from an inventory build at the hyperscaler, which may lead to another Boom/Bust cycle similar to 2018 and 2022

2. Taiwan Dual-Listings Monitor: TSMC Spread Trading at New High Range, CHT Spread at Short Levels

By Vincent Fernando, CFA, Zero One

• TSMC: +17% Premium; Has Remained Above 15% for Over Nearly Two Weeks
• ASE: +11.8% Premium; We Continue to View 14%+ as Range to Short From
• CHT: +0.6% Premium; Can Consider Shorting the Spread at Current Level

3. AMAT. No Beat, No Raise, No Slump. But Why?

By William Keating, Ingenuity

• AMAT Q124 revenues of $6.65 billion, in line with guidance and essentially flat both QoQ and YoY. Current quarter guidance also flat sequentially
• WFE valuations are at all time record highs while revenues remain on life support from China
• If China revenues fall off before non-China returns to growth, the WFE segment could be in for a world of pain.

4. Hamamatsu Photonics (6965 JP): Look Cautiously to the Long Term

By Scott Foster, LightStream Research

• The company has slashed FY Sep-24 guidance after missing 1H sales and profit targets by wide margins. Dividend maintained, 2-for-1 split planned and buyback under consideration.
• Capex has been cut, reflecting lower growth expectations. R&D also. Inventory adjustments will eventually be completed, but Chinese competiton will remain a problem.
• The share price has dropped 30% in the past year and 10.5% since May 8, putting the shares on 27 times EPS guidance. Still not cheap, but getting there.

5. Silicon Wafer Q124 Review, CY24 Outlook & Earthquake Risk

By William Keating, Ingenuity

• Q124 silicon wafer area shipments amounted to 2,834 MSI, down 5% QoQ and down 13.2% YoY. 
• In revenue terms, the top 4 global manufacturers reported revenues of $2.2 billion, down 10.4% QoQ and down 20.8% YoY.
• Taiwan’s recent earthquake did not impact Globalwafers shipments due to high inventory levels. However, tools were damaged, highlighting the risk of having so much wafer production in earthquake prone countries

6. Earnings Subsystems (MKSI, ICHR, UCTT), Semicap (ONTO, CAMT, AMAT, TOELY), and SiTime

By Douglas O’Laughlin, Fabricated Knowledge

• Subsystems did the results you should expect, and MKSI did a questionable (and understandable) convertible offering that tanked shares right after.

• All subsystems (except Ichor which sucks) look to be in a much better spot.

• The summary is that Subsystems revenue should continue improving into the second half and that 2025 will be a strong year.

7. Vanguard (5347.TT): Planning to Announce the Construction of a 12″ Fab in Singapore in 2024.

By Patrick Liao

• Vanguard should declare to established 12″ Fab in Singapore within 2014.
• Vanguard is likely to announce the establishment of 2 sets of 12″ fabs in the next 6 months.  
• China is expanding 28/22nm and above technologies, and we believe it’s more appropriate for Vanguard to compete with others rather than TSMC.