Alētheia Capital’s Post

Technology Hardware | TSMC - Warren Lau TSMC guides for 3Q gross margin to be 54.5% (OPM: 43.5%), ahead of our 53% expectation (43%), as the company sees higher utilization and an improving cost saving/productivity program. We think the former is attributed to the fully utilized N3/5 capacity, while the latter is consistent with our observation. We also believe the soft TWD is a tailwind for the margin. We think the better-than-expected gross margin should remove some concerns of weakening profitability in 2H24 due to high N3 mix (lower margin) and heavy depreciation. Read full story here: https://buff.ly/4f5l4jp For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Technology Hardware | TSMC - Warren Lau TSMC held its 2024 outstanding supplier awards today (2nd Dec 2024). We believe the major winners were the vendors to TSMC’s advanced packaging operations. They accounted for 22% of award portfolio in 2024, up from a mere 5% in 2023. This underpins not only the important of these suppliers, but also the critical role of advanced packaging in TSMC’s growth potential (see sector report dated 5 October). Read full story here: https://buff.ly/41h8adQ For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Technology Hardware | TSMC - Warren Lau We expect TSMC to keep capex intensity in the low-to-mid-30% range, that is, ±$30bn/±$35bn for FY24E/25E. The budget is for infrastructure (supporting domestic and overseas greenfield constructions), 2.5/3D capacity expansion (up multiple folds) and build out of N2/N4/N28 capacity. We estimate TSMC could generate ±$60bn in FCF in FY24E-25E, paving the way for a higher shareholder returns – potentially returning to the 70% payouts of the pre-COVID-19 era! Read full story here: https://buff.ly/4bFx0oV For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Technology Hardware | TSMC - Warren Lau TSMC reported 1Q revenue of TWD593bn (or US$18.9bn by our estimate). This implies a 5% fall QoQ but a 13% increase YoY. TSMC had guided $18-18.8bn in revenue while consensus looked for $18.3bn. We estimate EPS will come in at TWD8.57 (TWD8.29 consensus) or US$1.36 (ADR), up single digit YoY – the first positive growth since 2Q23. We expect a 53-54% gross margin (guidance: 52-54%) and an operating margin (42%) slightly above (40-42%). Read full story here: https://buff.ly/4aRtb00 For more information on our #technology #hardware product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Technology Hardware | TSMC - Warren Lau We preview TSMC’s 3Q results and 4Q outlook due on 17 October. We expect a record 3Q EPS of TWD11.67 ($1.81 ADR), up 44% YoY on the back of record revenue of TWD760bn (USD23.6bn), up 37% YoY and a robust GM of 55%. For 4Q, we expect TSMC to guide for high-single digit sequential revenue growth (or ~30% YoY) i.e., $25-26bn. For GM, we expect a 54-56% range, supported by a higher utilisation rate and ongoing cost saving initiatives, offset by a higher mix of 3nm revenue and to lesser extent an unfavourable USD/TWD. Read full story here: https://buff.ly/4h0OMHb For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Sifter Fund returned 3% during Q2/2024 and Year-to-date, the Fund has delivered 18.2% return. Top contributors in Q2 were: Taiwan Semiconductor, Alphabet and Costco. (Sifter Fund Global R-class, June 28, 2024). Please note that the historical performance of the Fund is not a guarantee of future performance. #MarketingCommunication #qualityinvesting #investing

Technology Hardware | The One - Warren Lau The figure illustrates our estimate for TSMC’s revenue by technology nodes and backend service. We believe the back-end division is likely to be one of its fastest growing engines, in addition to the 2nm and 3nm nodes, in years to come. We estimate this division will achieve ~$25bn in FY26E, up from $6.6bn in FY23. We estimate TSMC’s back-end revenue is likely to grow by an additional $2-2.5bn to $8.5-9bn in FY24E. Read full story here: https://buff.ly/4eUu61E For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

Technology Hardware | Micron Technology - Warren Lau Valuation at a glance Figure 6 illustrates the long term forward price to book valuation for Micron shares. Historically the stock peaked at 2.5x PB, such as 2018 extraordinary of server demand and 2021 of COVID-driven demand. As of today, the stock is trading at 3.1x and 2.6x FY25E/26E PB multiple respectively. Such new valuation is sustainable if the demand for HBM/AI proves sustainable and that the memory industry continues to spend ‘sensibly’ to keep the demand and supply intact. While we are positive on the former, but we aren’t sure of the Korean peers especially Samsung, who is eagerly to regain its crown in HBM market. Equally important is that Micron, being the late comer to the HBM market, would need to demonstrate its ability to execute its HBM HVM production and improve its services in order win over business from a wider pool of clients and only then it could achieve its 20-25% HBM market share. Read full story here: https://buff.ly/4bfE37C For more information on our #BestGlobalTechHardwareTeam product, and other Aletheia Capital research, please contact info@aletheia-capital.com #investments #advisory #ideas #fintech #InYourCorner

According to our Group Head of Equities, Mr Aadil Ebrahim, the global semiconductor industry took shape in the 1950s, where Companies owned and operated their own manufacturing facilities. However, by the 1990s, this landscape began to shift to a hybrid approach with an increasing trend towards outsourcing. As a result, there was a significant divergence in share performance among the industry’s major players, a phenomenon we will explore further below. #KlayInsights #KlayInvestments #InvestmentTeam #InYourCorner #Semiconductor

Semiconductor stocks led the downturn amid renewed geopolitical tensions following reports that China is broadening antitrust scrutiny on U.S. chipmakers’ acquisitions in recent years. Last week, Beijing launched an investigation into Nvidia Corp.'s (NASDAQ:NVDA) 2019 acquisition of Mellanox Technologies. The iShares Semiconductor ETF (NYSE:SOXX) declined 1.5%, weighed down by sharp losses in major chip stocks. Broadcom Inc. (NASDAQ:AVGO) dropped over 5%, while Marvell Technology Inc. (NASDAQ:MRVL) plunged over 8%.