Weekly Top Ten Tech Hardware and Semiconductor – Mar 31, 2024

By William Keating, Ingenuity

  • It’s probably not a good idea to chase the AI mania surge by buying the likes of NVIDIA, AMD, Micron etc at their currently highly elevated share prices
  • Taiwan has a large ecosystem of semiconductor companies many of which are critical to the AI hardware supply chain
  • We present a range of options with exposure to AI hardware for your consideration including foundry, fabless IC design, server BMC & Copper Clad Laminate

By Douglas O’Laughlin, Fabricated Knowledge

  • I wrote about this in my recent post about HBM, and it seems almost everything I talked about became true. HBM is going to bail out the memory markets meaningfully.
  • Let’s talk about earnings, but I was hoping you could keep this post in mind while I discuss Micron.
  • These are the kinds of beats we start to see when the cycle turns. Now, the stocks have begun to anticipate this, but given the pricing dynamics of HBM, I feel very confident in Micron’s ability to hit a new cycle high in profitability.

By Vincent Fernando, CFA, Zero One

  • Hon Hai shares have hit a new all-time high and have just risen past our target price of NT$155, surging after investors flocked to Hon Hai on AI news.
  • Hon Hai showcased two key technologies at Nvidia’s GTC conference last week: Nvidia-based AI servers with liquid cooling systems and an AI autonomous driving controller using Nvidia’s Orin X processor.
  • Hon Hai’s sharp rally appears to have partly been caused by a short squeeze; While we like the long-term fundamentals and increased TP to NT$170, Hon Hai appears near-term overbought.

By Vincent Fernando, CFA, Zero One

  • Key Taiwan Server Names Soar; Delta Electronics Major Winner of Nvidia’s Conference
  • TSMC (2330.TT; TSM.US): Raising Growth Target to 25%+ YoY in 2024F
  • Memory Monitor: Micron Leapfrogging Into HBM3E for AI; Nanya Lagging Peers But Poised to Benefit 

By Scott Foster, LightStream Research

  • MHI’s share price has risen more than 60% year-to-date and nearly tripled over the past 12 months on the improving outlook for Japanese defense contractors.
  • A huge increase in new orders, prospects for a doubling of sales and a rapidly rising operating margin on Aircraft, Defense & Space have been factored into the price.
  • The shares do not look expensive compared with international comparables, but neither are they particularly cheap. Potential problems, from Japanese defense budget constraints to production glitches, have been ignored. 

By Patrick Liao

  • Mediatek Inc (2454 TT) Dimensity 9400 is expected to be released in September 2024F.  
  • Artificial Intelligence (AI) is a trending topic, and MediaTek is adapting by emphasizing Generative AI functionality in its Dimensity 9300 and 9400 smartphone models.  
  • The smartphone market is expected to recover in 2024F, with MediaTek’s revenue in the second quarter potentially surpassing the first quarter.

By Vincent Fernando, CFA, Zero One

  • Delta Taiwan Outperforms Delta Thailand After Showcasing Its AI Power Efficiency Solutions at NVIDIA Corp (NVDA US)’s GTC Conference 
  • Delta Taiwan vs. Thailand Valuation Mismatch Has Corrected Further; Delta Thailand Finally Worth Less Than Its Parent
  • Short Interest Spiked for Delta Taiwan; Taiwan Rally Short-Term Overdone Due to AI Concept Stock Hype?

By William Keating, Ingenuity

  • Taiwan companies are required to report revenue on a monthly basis. These updates can help us understand how a given quarter is progressing & predict quarterly earnings ahead of time
  • Initially we focused on MoM %  increase/decrease. This is useful, but one needs to account for anomalies such as seasonality and potential non-linearity month to month within a given quarter 
  • We now also provide the monthly YoY revenue comparison. This eliminates anomalies due to both seasonality and intra-quarter non-linearity, enabling a clearer perspective on where the industry is at. 

By Vincent Fernando, CFA, Zero One

  • Mediatek is advancing full speed with recent industry collaborations for automotive chips, data center connectivity solutions, and AI memory solutions.
  • In particular, the company has entered the market for Co-Packaged Optics (CPO), with partnerships announced with Foxconn and Ranovus.
  • While the stock has rallied and re-rated, consensus forward estimates do not appear overly demanding and could still have room to increase further.


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