Weekly Top Ten Tech Hardware and Semiconductor – Dec 1, 2024

Weekly Top Ten Tech Hardware and Semiconductor – Dec 1, 2024

By Vincent Fernando, CFA, Zero One

  • US Set to Unveil New Wave of Semiconductor Restrictions on China
  • Hon Hai Subsidiary Says Progress for Nvidia GB200 Servers is Smooth, Mass Production in 2025E
  • PC Monitor: Dell & HPQ Highlight Sharp Divide Between Corporate and Consumer PC Demand; Shares Slump 

By Vincent Fernando, CFA, Zero One

  • TSMC: +19.2% Premium; Middle of Most Recent ADR Spread Trading Range
  • UMC: -1.7% Discount; Local Shares’ Short Interest Continues to Rise
  • ASE: +4.0% Premium; Local Shares’ Short Interest Has Finally Stopped Rising

By Vincent Fernando, CFA, Zero One

  • Delta Thailand Still Grossly Overvalued Even After Recent Correction; Under Market Surveillance Until December 11th
  • Delta Taiwan’s Market Cap Remains at Just 57% of Delta Thailand
  • Further Valuation Correction Likely Between the Two Names; We Believe Delta Taiwan Should Outperform

By William Keating, Ingenuity

  • Intel is now set to receive $7.86 billion in CHIPs Act funding, down from the $8.5 billion originally touted back in March 2024
  • The funding comes with a raft of restrictions and caveats regarding what happens in the event of any changes in Intel’s organizational structure and/or ownership
  • The US Department of Commerce also reserves the right to withhold funding and/or weigh in on decisions around outsourcing if Intel fails to meet key, critical milestones. Ouch!

By Vincent Fernando, CFA, Zero One

  • Gross Margins Aggregate Data – Shows Taiwan Semiconductor Companies Under Pressure
  • How TSMC and GlobalWafers show two very different margin environments; However everyone needs to manage rising energy costs into 2025E
  • Aggregate Inventory Levels — Inventory Days Declining Trend is a Positive Sign

By Vincent Fernando, CFA, Zero One

  • Soft PC Results from Dell and HPQ and Delayed Industry PC Upgrades into  2025E; Dell and HPQ Shares Fall Sharply
  • Conclusion: Both Firms Confirm Relative Strength for Commercial and Weakness for Consumer; AI PCs and Windows 11 to Drive 2025E Upgrades
  • Asia PC Makers Showing Stronger Growth; However, Dell & HPQ Share Rout May Weigh on Sentiment

By Vincent Fernando, CFA, Zero One

  • TSMC: +20.4% Premium; ADR Premium is Approaching a Short Level
  • UMC: +0.7% Premium; Short Interest Soars to New Two-Year Highs
  • ASE: +4.2% Premium; ADR Headroom Falls to 100% Maxed Out

By Vincent Fernando, CFA, Zero One

  • Memory Market Diverges: AI Demand Continues to Surges While Legacy Segments Struggle in November
  • Diverging Demand Trends Highlight Market Decoupling — AI Driving HBM, Server DRAM, QLC NAND Demand
  • Outlook for the Memory Market — Decoupling Trade: Long SK Hynix vs. Short Nanya Tech Trade

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