This video was recorded on April 02, 2025 Mary Long: Welcome to Liberation Day. You're Listening to Motley Fool Money. I'm Mary Long. Join on this Wednesday morning, the Liberation Day of all Liberation Days by Mr. David Meier. David, great to see. Happy to have. How you doing? David Meier: I'm doing well. It's great to see you, too. Mary Long: Today is April 2, the day after April Fool's Day. As I've mentioned a few times already in this show, it's also Liberation Day. What the heck does that even mean? It ...

Investment Rating - The report rates SG Micro as a "Buy" with a target price of Rmb115, reflecting a positive outlook for the company amid ongoing market dynamics [32][45]. Core Insights - The report identifies China's mature semiconductors, particularly analog, as defensive investments due to the recent 34% retaliatory tariff on US imports, which is expected to enhance local supply and reduce competition from US firms [1][3][14]. - SG Micro is highlighted as the top beneficiary of the tariff, with expectations of improved earnings and market share gains as US competitors face cost disadvantages [5][21]. - The report anticipates that the tariff will accelerate the localization of semiconductor supply in China, benefiting companies like SG Micro, Will Semi, and Maxscend [3][14][21]. Summary by Sections Market Overview - The US tariffs have limited direct impact on Chinese semiconductors, as most are shipped to ODM/EMS outside the US and are not subject to tariffs. However, there is an indirect effect on demand due to increased selling prices [2][11]. Company Analysis - SG Micro is projected to expand its market share as the cost advantage of Texas Instruments is eliminated by the tariff. The company is expected to benefit from an ongoing recovery in the analog segment and tariff protection against US competitors [4][5][21]. - Will Semi is also rated as a "Buy," with expectations of strong growth driven by its CMOS Image Sensors (CIS) business, particularly in the automotive sector [48][49]. - Maxscend is rated as a "Sell" due to concerns over rising investment costs and potential profitability pressures despite its leadership in the RFFE market [39][40]. Financial Projections - SG Micro's revenue forecasts for 2024E and 2025E have been adjusted to Rmb3,301 million and Rmb4,188 million respectively, reflecting a year-on-year growth of 26% and 27% [22]. - The report indicates that SG Micro's gross profit margin is expected to stabilize around 51.3% in 2025, with net profit projected to reach Rmb828 million [22][32]. Valuation - The target price for SG Micro is based on a forward P/E of 65x for 2025E EPS, justified by the anticipated recovery in the analog semiconductor market and reduced foreign competition due to tariffs [45][46].

Company Performance - Texas Instruments (TXN) stock closed at $154, with a +1.72% movement compared to the previous day, outperforming the S&P 500's daily loss of 0.23% [1] - The stock has experienced a decline of 20.54% over the past month, which is worse than the Computer and Technology sector's loss of 16.18% and the S&P 500's loss of 12.13% [1] Upcoming Earnings - Texas Instruments is set to release its earnings report on April 23, 2025, with an anticipated EPS of $1.06, reflecting an 11.67% decrease from the same quarter last year [2] - The consensus estimate for revenue is $3.91 billion, which represents a 6.74% increase from the prior-year quarter [2] Full Year Projections - Zacks Consensus Estimates project earnings of $5.35 per share and revenue of $17.05 billion for the full year, indicating changes of +2.88% and +9% respectively from the previous year [3] - Recent revisions to analyst forecasts for Texas Instruments are important as they reflect near-term business trends, with positive revisions seen as a good sign for the company's outlook [3][4] Valuation Metrics - Texas Instruments has a Forward P/E ratio of 28.31, which is a premium compared to the industry's average Forward P/E of 22 [6] - The company has a PEG ratio of 2.45, while the average PEG ratio for Semiconductor - General stocks is 1.64 [6] Industry Ranking - The Semiconductor - General industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 13, placing it in the top 6% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Core Insights - The article compares STMicroelectronics (STM) and Texas Instruments (TXN) to determine which stock is more attractive to value investors [1] Valuation Metrics - STMicroelectronics has a Zacks Rank of 2 (Buy), indicating an improving earnings outlook, while Texas Instruments has a Zacks Rank of 3 (Hold) [3] - STM has a forward P/E ratio of 21.82, significantly lower than TXN's forward P/E of 28.31 [5] - The PEG ratio for STM is 0.76, while TXN's PEG ratio is 2.45, suggesting STM is more favorably valued in terms of expected EPS growth [5] - STM's P/B ratio is 0.94, compared to TXN's P/B of 8.15, further indicating STM's undervaluation [6] - These metrics contribute to STM's Value grade of A and TXN's Value grade of D, making STM a more attractive option for value investors [6]

Market Overview - The US stock market opened with all three major indices declining significantly, with the Dow Jones dropping over 1400 points, a decrease of 3.48%, the Nasdaq falling by 4.47%, and the S&P 500 down by 4.10% [1] - Major technology stocks experienced substantial declines, with Tesla down over 9%, Nvidia down over 7%, resulting in a market capitalization loss of $176.9 billion (approximately 1.28 trillion RMB) [2] - Chip stocks collectively fell, with AMD, Intel, and Broadcom each dropping over 6%, and TSMC down over 4% [3] Chinese Stocks - Popular Chinese stocks also saw significant declines, with Bilibili down over 9%, Alibaba, JD.com, and iQIYI down over 8%, and Xpeng and NIO down over 7% [5] Commodity Prices - Spot gold prices fell by over 1%, while silver prices dropped by over 4% [6] - International crude oil prices plummeted, with both Brent and WTI crude oil down over 7% [7][9] European Market - European stock markets experienced rapid declines, with Germany's DAX index down over 4%, France's CAC40 down 3.90%, the UK's FTSE index down 4.36%, Italy's FTSE MIB index down over 6%, and Spain's IBEX35 down over 5% [10] Employment Data - The US non-farm payrolls report for March showed an increase of 228,000 jobs, surpassing expectations of 140,000, while the unemployment rate rose to 4.2%, above the expected 4.1% [10][11] - Average hourly earnings increased by 0.3% month-over-month, matching expectations, while year-over-year growth was reported at 3.8%, slightly below the expected 4.0% [10] Trade Policies - The US government announced a 34% tariff on all imports from the US starting April 10, which may lead to increased layoffs in the private sector [11][12] - President Trump signed an executive order imposing a 10% "minimum baseline tariff" on trade partners, with higher tariffs for countries with significant trade deficits with the US [11][12]

Core Viewpoint - Texas Instruments Incorporated (TI) will host a webcast for its first quarter 2025 earnings conference call on April 23, 2025, at 3:30 p.m. Central time, where key executives will discuss financial results and address investor questions [1]. Company Overview - Texas Instruments is a global semiconductor company that specializes in designing, manufacturing, and selling analog and embedded processing chips for various markets, including industrial, automotive, personal electronics, enterprise systems, and communications equipment [3]. - The company's mission is to create a better world by making electronics more affordable through semiconductors, focusing on innovation that enhances reliability, affordability, and energy efficiency [3].

Core Viewpoint - Texas Instruments (TXN) has experienced a 12.3% decline in share price over the past month, underperforming the semiconductor industry, technology sector, and S&P 500 index, which declined by 4.8%, 5%, and 2.1% respectively [1][3] Group 1: Reasons for Underperformance - The decline in TXN's stock is attributed to broader market weakness and company-specific concerns, including a sell-off in tech stocks due to fears of rising trade tensions and slowing economic growth [3] - Concerns regarding the U.S. government's stance toward China are significant, as approximately 20% of TXN's total revenues for 2024 are expected to come from the Chinese market, raising fears of sanctions and tariffs [4] - Investor apprehensions about softness in TXN's industrial, automotive, and enterprise systems end markets have also contributed to the stock's decline, with these markets accounting for about 70% of TXN's revenues and reporting a sequential decline in Q4 2024 [5] Group 2: Strategic Moves for Recovery - TXN is strategically building its inventory, currently at $4.5 billion, to meet customer demand once the market rebounds, avoiding sudden production ramp-ups [6] - The company is investing in a second factory to scale up its Lehi facility in Utah, enhancing production capacity for Analog and Embedded semiconductor products [7] - TXN has secured $1.6 billion in funding from the U.S. government under the CHIPS Act, which will support new 300mm wafer fabs in Texas and Utah, strengthening its position as a supplier of analog and embedded chips [8] Group 3: Partner Base and Growth Potential - TXN has established a strong partner base, including collaborations with Micron Technology, Apple Inc., and LeddarTech Holdings Inc., which aid in its growth in consumer and automotive markets [9][10] - The Zacks Consensus Estimate for TXN's 2025 revenues is projected at $17.1 billion, indicating a year-over-year growth of 9%, with earnings estimated at $5.35 per share, suggesting a 2.9% year-over-year increase [11] Group 4: Conclusion - Despite the challenging macroeconomic environment and market softness, TXN's business remains stable due to new production facilities, healthy inventory levels, and a robust partner base, suggesting that investors should consider holding the stock [12]

Core Viewpoint - Texas Instruments announced layoffs at its Lehi, Utah plant as part of a restructuring plan to support long-term operational efficiency, including new factory construction and capacity expansion [1] Group 1: Layoff Details - The layoffs are aimed at enhancing operational efficiency and are directly related to the company's expansion plans [1] - The company did not disclose the exact number of affected employees but indicated that it is below the WARN notification threshold, suggesting the layoffs involve less than 33% of the workforce, likely in the hundreds [1] Group 2: Expansion Plans - Texas Instruments has secured $1.61 billion in funding from the U.S. government under the CHIPS Act to build a second 300mm wafer fabrication plant [1] - The layoffs may be a strategic move to consolidate resources and ensure efficient operations once the new factory is operational [1]

Company Overview - Analog Devices (ADI) has experienced an 8.5% decline in stock price over the past month, underperforming the Zacks Computer and Technology sector, Zacks Semiconductor - Analog and Mixed industry, and the S&P 500 index, which declined by 2.7%, 7%, and 2.4% respectively [1] - The company is highly exposed to the Chinese market, which accounted for approximately 22% of ADI's 2024 top line [1] Regulatory Environment - Recent U.S. tariff policies, including a 25% additional tariff on imports from Mexico and Canada and a 10% additional tariff on imports from China, have raised investor concerns [2] - A proposed 25% tariff on semiconductor products has further weakened investor confidence in semiconductor companies, including ADI [2] Competitive Landscape - ADI competes with Texas Instruments (TXN), Microchip Technologies (MCHP), and NXP Semiconductors (NXPI) in the analog, mixed, and digital signal processing semiconductor markets [3] - Texas Instruments generated $12.2 billion in revenues from the analog semiconductor segment in 2024, significantly surpassing ADI's total revenues of $9.43 billion, highlighting Texas Instruments' dominant position [4] - Microchip Technologies and NXP Semiconductors also compete with ADI in various semiconductor solutions, including analog and mixed-signal products [5][6] - Texas Instruments and Microchip Technologies received significant grants from the U.S. government's CHIPS Act, potentially giving them a competitive edge over ADI [7] Market Recovery - Despite competitive and regulatory challenges, ADI's segments are showing signs of recovery [9] - The industrial segment, the largest contributor to ADI's top line, is recovering from a cyclical downturn, driven by trends toward decentralized intelligence and modular manufacturing [10] - The consumer segment is benefiting from the rapid growth of the electronics wearables market, increasing demand for high-performance sensors and signal chains [11] - The proliferation of AI-based data centers is driving demand for ADI's high-precision electro-optical controllers and high-voltage power protection systems [12] Financial Outlook - The Zacks Consensus Estimate for ADI's fiscal 2025 revenues is $10.27 billion, indicating year-over-year growth of 8.97% [13] - The Zacks Consensus Estimate for ADI's fiscal 2025 earnings is $7.11, suggesting year-over-year growth of 11.4% [13]

Company Performance - Texas Instruments (TXN) closed at $184.55, reflecting a +0.32% change from the previous trading day's closing, outperforming the S&P 500's daily loss of 1.12% [1] - In the past month, shares of Texas Instruments have decreased by 8.01%, while the Computer and Technology sector lost 4.05% and the S&P 500 lost 2.91% [1] Earnings Forecast - Texas Instruments is expected to report an EPS of $1.06, indicating an 11.67% decline compared to the same quarter last year, with a projected quarterly revenue of $3.91 billion, up 6.74% from the year-ago period [2] - For the annual period, earnings are anticipated to be $5.35 per share and revenue is expected to reach $17.05 billion, reflecting increases of +2.88% and +9% respectively from the previous year [3] Analyst Estimates and Valuation - Recent adjustments to analyst estimates for Texas Instruments indicate evolving short-term business trends, with positive revisions reflecting optimism about the company's business and profitability [3] - Texas Instruments currently has a Forward P/E ratio of 34.4, which is a premium compared to the industry's average Forward P/E of 28.37, and a PEG ratio of 2.98, higher than the Semiconductor - General industry's average PEG ratio of 2.03 [6] Industry Context - The Semiconductor - General industry is part of the Computer and Technology sector, currently holding a Zacks Industry Rank of 81, placing it in the top 33% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]