Weekly Top Ten Tech Hardware and Semiconductor – May 5, 2024

1. AMD. It’s A Marathon, Not A Sprint

By William Keating, Ingenuity

• Q124 revenues of $5.5 billion, $100 million above the guided midpoint, down 11% QoQ but up 2% YoY.
• Looking ahead, AMD forecasted the current quarter revenues of $5.7 billion, up 3.6% sequentially.
• Share price down 7% in AH and down 35% from its recent 52 week high. We could see it retest the $100 level in the coming months

2. Taiwan Tech Weekly: Major Week of Earnings; Apple’s Edge AI Could Make Your Current IPhone Obsolete

By Vincent Fernando, CFA, Zero One

• Taiwan Tech Rebounds Sharply Alongside Major Nvidia/U.S. Tech Rebound Last Week. Wave of Major Earnings Releases This Week — See Our Key Events Section.
• Apple’s Latest Supplier List Released Last Week — Nanya Tech, Lotes, and Novatek Dropped. New List Shows Apple Struggling to Diversify from China.
• Apple iOS 18 Will Heavily Feature Edge AI Running Locally on the iPhone for User’ Privacy and Security — We Believe This Could Be a Major Driver of Phone Upgrades

3. Key Insights from Qualcomm’s Latest Data; Mediatek Taking Market Share?

By Vincent Fernando, CFA, Zero One

• Qualcomm’s latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results’ key implications for Mediatek.
• Qualcomm’s 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.
• Qualcomm confirmed Mediatek’s view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.

4. PC Monitor: The Next Version of MSFT CoPilot Will Be the Killer App for a Global AI PC Upgrade Cycle

By Vincent Fernando, CFA, Zero One

• Branded PC makers’ shares have been mostly lower in April, however Intel and Microsoft developments are providing strong signals for a future PC upgrade cycle into AI PCs.
• Over 60% of Fortune 500 companies are now using Microsoft’s CoPilot AI assistant; Intel expects the industry to exceed its prior forecast for AI PC shipments in 2024E.
• CoPilot is the killer app that will trigger a global enterprise PC upgrade cycle; The next generation of CoPilot will be an edge AI app that will require powerful hardware.

5. Taiwan Dual-Listings Monitor: TSMC & ASE Spreads Surge to Extremes; CHT Shorts Massing Pre-Earnings

By Vincent Fernando, CFA, Zero One

• TSMC: Premium Soars to +15.2%, Good Level to Consider Shorting the Spread
• UMC: Spread Bounces from Lows to Relatively Extreme High of +1.9%; Good Level to Short
• ASE: Spread Soars to Near All-Time High of +15.5%; Consider Shorting the Spread

6. Mediatek Seeing Massive Rebound in Mobile; Major AI Data Center Driver on the Horizon

By Vincent Fernando, CFA, Zero One

• Mediatek Enjoying a Massive Rebound for its Mobile Phone Segment; Most Optimistic About High-End Smartphone Demand
• New AI Data Center Growth Driver on the Horizon; Recent Investment in U.S. AI Server Chip Startup
• Recent Share Price Dip is an Accumulation Opportunity; We Rate Mediatek as a Structural Long

7. Deep Dive Into Samsung’s Memory & Foundry Results: TSMC, AI PC, Server, AI Phone Implications

By Vincent Fernando, CFA, Zero One

• Samsung 1Q24 results beat consensus by a wide margin and the company gave strong guidance for its Memory segment, guiding for further strength driven by servers, PCs, & phones needs.
• Guided strong demand for PC/Mobile Memory in 2H24E driven by on-device AI, which supports the case of edge AI hardware beginning to drive demand in addition to cloud/server-based AI hardware.
• Foundry segment’s losses reduced, but still loss-making? Samsung’s order backlog is at an all-time high but Samsung Foundry results suggest manufacturing yield performance likely well behind TSMC.

8. Siltronic Slashes 2024 Sales Forecast As Inventory Woes Worsen

By William Keating, Ingenuity

• Siltronic cut its 2024 sales revenue forecast by 10% just days ahead of their Q124 earnings release
• Inventory levels, while gradually improving, are still at all time record highs
• In the case of Siltronic, it seems likely that Automotive end-market weakness is the main culprit

9. Earnings Week of April 26th

By Douglas O’Laughlin, Fabricated Knowledge

• This earnings post will be a bit less detailed than usual. I just finished a move mid-earnings, and it was insanely distracting. So, I’ll start with the spark notes before I go into depth.

• Industrial (TXN) is possibly bottoming, Automotive is probably bottoming (TXN), but SiC (STM) is doing much worse, and mobile (TER) hasn’t changed quite much. Consumer (NOD) got a substantial call out.

• Telecom (MXL, INTC) is about to bottom imminently. I continue to like MaxLinear and other companies that are exposed to telecom. HBM (TER, SK) continues to be strong. In Semicap, Logic is strong, HBM is strong, and China is declining less than expected.

10. Lasertec (6920 JP): Orders Up, Guidance Down

By Scott Foster, LightStream Research

• The share price has bounced back on strong 3Q orders and long-term optimism, but weak 4Q guidance calls the growth trajectory into question.
• Guidance, which has sales dropping to about half what they were a year earlier, is based on the expected timing of customer acceptance of delivered equipment. It could be conservative.
• At 75X EPS guidance for FY Jun-24, a rate of growth not visible in current trends has already been discounted. Current orders should translate into sales in 2026.