24 Feb 2026 08:34:35 ET │ 14 pages US Semiconductor Equipment SPIE Day 1 Takeaways CITI'S TAKE We hosted an investor dinner with Lam Research CFO & EVP Doug Bettinger and VP IR Ram Ganesh. Overall, management tone was positive with expectations for another relative WFE out-performance year driven by DRAM + foundry capacity with continued technology migrations in NAND and some new capacity. Dep/Etch SAM is expected to grow faster than WFE and Lam expects to hold 50%+ of the share. Lam's recent 2026 WFE view ...

Summary of Intel Corp (INTC.O) Conference Call Company Overview - **Company**: Intel Corp - **Industry**: Semiconductor - **Market Position**: Leading supplier of microprocessors for desktop PCs, notebook PCs, and servers with approximately 70% market share - **Revenue Sources**: Approximately 90% of total revenue from PC and Datacenter segments Key Points Financial Performance - **Stock Performance**: Intel's stock fell 11% after hours due to lower gross margins driven by internal CPU supply constraints [1] - **Earnings Guidance**: The March quarter is expected to be the low point for gross margins, with expectations of above-seasonal sales for the rest of the year driven by AI demand [1][2] - **Earnings Per Share (EPS)**: Revised EPS estimates for CY26 and CY27 are lowered by $0.48 and $0.17 respectively due to lower gross margins [1] - **Target Price**: Target price revised to $48, reflecting a P/E of 37x based on revised CY27 EPS [1] Market Trends - **PC Market**: Expected to decline year-over-year due to memory supply constraints, with further downward revisions anticipated for PC unit shipments in 2H26 [3] - **Server Market**: Anticipated to grow double-digit year-over-year, driven by AI and replacement demand, although Intel expects to ship below server demand throughout 2026 due to supply constraints [3] Product Developments - **ASIC Revenue**: Achieved $1.0 billion in annualized revenue from ASIC products, including the Infrastructure Processing Unit (IPU) for Google [4] - **Advanced Packaging**: Revenue opportunities from advanced packaging are now in the billions, significantly higher than previous expectations [5] Operational Insights - **Manufacturing Yields**: Intel is focused on improving yields across all nodes, with expectations to reach industry-standard yields by 2H26 [11] - **Capex**: Capital expenditures are expected to be flat to down slightly year-over-year, which is favorable for semiconductor stocks [1][12] Segment Performance - **Client Computing Group**: Revenue was $8.19 billion, down 4% quarter-over-quarter, below consensus estimates due to prioritization of data center wafers [13] - **Datacenter and AI Group**: Revenue increased by 15% quarter-over-quarter to $4.74 billion, driven by strong server demand [14] - **Intel Foundry**: Revenue was $4.51 billion, up 6% quarter-over-quarter, exceeding estimates due to a better product mix [15] - **All Other Segment**: Revenue decreased by 42% quarter-over-quarter to $574 million, but was above estimates due to higher Mobileye sales [16] Balance Sheet Highlights - **Cash Position**: Cash and short-term investments increased by $6.48 billion quarter-over-quarter, driven by operating cash flows [17] - **Inventory Management**: Inventory dollars increased slightly, but days of inventory decreased, indicating improved efficiency [18] Risks and Considerations - **Market Dependency**: Intel's revenue is highly dependent on IT spending, with potential risks from fluctuations in the PC and server markets [30] - **Competition**: Direct competition with AMD in the microprocessor market poses risks to market share and revenue estimates [31] - **Macroeconomic Factors**: Global economic conditions could impact Intel's performance, given its geographic exposure [32] Conclusion - **Investment Rating**: Maintained a Neutral rating on Intel shares, with a cautious outlook on market share loss in the core CPU market but positive sentiment towards the foundry business [28]

Core Insights - The article provides a comprehensive analysis of Micron Technology and its position within the Semiconductors & Semiconductor Equipment industry, highlighting key financial metrics and growth prospects for investors [1] Company Overview - Micron Technology is a leading semiconductor company specializing in memory and storage chips, primarily generating revenue from dynamic random access memory (DRAM) and having some exposure to NAND flash chips [2] - The company serves a diverse global customer base, including data centers, mobile phones, consumer electronics, and industrial applications [2] Financial Metrics - Micron's Price to Earnings (P/E) ratio is 26.26, which is 0.27x lower than the industry average, indicating potential for growth at a reasonable price [3] - The Price to Book (P/B) ratio of 5.29 is significantly below the industry average by 0.56x, suggesting undervaluation and possible growth opportunities [3] - The Price to Sales (P/S) ratio of 7.37 is 0.59x the industry average, further indicating potential undervaluation [3] - The Return on Equity (ROE) stands at 9.28%, which is 3.87% above the industry average, reflecting efficient use of equity to generate profits [5] - Micron's EBITDA is $8.35 billion, which is 0.21x below the industry average, potentially indicating lower profitability [5] - The gross profit of $7.65 billion is 0.22x below the industry average, suggesting lower revenue after accounting for production costs [5] - Revenue growth of 56.65% exceeds the industry average of 32.03%, indicating strong sales performance [5] Debt Analysis - Micron Technology has a debt-to-equity (D/E) ratio of 0.21, which is lower than that of its top four peers, indicating a stronger financial position and a favorable balance between debt and equity [8] Summary of Performance - Micron's low P/E, P/B, and P/S ratios compared to peers suggest potential undervaluation, while its high ROE and revenue growth indicate strong performance and growth prospects relative to industry competitors [9]

Group 1: Partnership Overview - Tata Electronics will manufacture and assemble chips for Intel Corp from facilities in Gujarat and Assam, and will also assemble laptops and desktops featuring Intel's chips [1][2] - This agreement marks Intel as Tata's first major publicly announced client for its chip facilities [2] - The Osat facility in Assam is expected to begin operations in April 2026, while the fab plant in Gujarat is projected to start manufacturing chips by mid-2027 [2][3] Group 2: Market Context and Demand - The collaboration aims to address the growing demand for artificial intelligence chips in laptops and desktops, with India anticipated to be among the top five markets for such products by 2030 [4] - Intel is currently the world's third-largest chipmaker, following Nvidia and Samsung, as per a report by Gartner [3] Group 3: Strategic Implications - Intel's CEO stated that this partnership will enable rapid scaling in a fast-growing compute market in India, driven by rising PC demand and AI adoption [6] - The collaboration is expected to enhance cost competitiveness, speed up time-to-market, and improve operational agility for Intel products [6] Group 4: Company Background and Financials - Tata Electronics reported ₹66,601 crore in revenue for FY25 and is expected to see further growth, largely due to increased assembly of Apple's iPhones [8] - Tata Electronics has a significant role as an electronics manufacturing services partner for Apple, accounting for one-third of all iPhones assembled in India [4]

Core Insights - The article emphasizes the importance of comprehensive evaluations for companies in the Semiconductors & Semiconductor Equipment industry, particularly focusing on NVIDIA and its competitors [1] Company Overview - NVIDIA is a leading developer of graphics processing units (GPUs), initially used for gaming but now also critical in artificial intelligence applications [2] - The company offers AI GPUs and a software platform called Cuda for AI model development and training, while also expanding its data center networking solutions [2] Financial Metrics Comparison - NVIDIA's Price to Earnings (P/E) ratio is 44.01, which is lower than the industry average by 0.52x, indicating potential value [3] - The Price to Book (P/B) ratio of 36.35 is significantly higher than the industry average by 4.51x, suggesting possible overvaluation based on book value [3] - The Price to Sales (P/S) ratio of 23.36 exceeds the industry average by 2.06x, indicating potential overvaluation in terms of sales performance [3] Performance Indicators - NVIDIA's Return on Equity (ROE) stands at 28.72%, which is 25.04% above the industry average, reflecting efficient use of equity to generate profits [7] - The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is $31.94 billion, which is 0.81x below the industry average, suggesting potential financial challenges [7] - The gross profit of $33.85 billion is 1.0x below the industry average, indicating lower revenue after accounting for production costs [7] - Revenue growth of 55.6% is significantly higher than the industry average of 31.66%, showcasing strong demand for NVIDIA's products [7] Debt-to-Equity Ratio Analysis - NVIDIA has a lower debt-to-equity (D/E) ratio of 0.11 compared to its top 4 peers, indicating a stronger financial position and less reliance on debt financing [10] - The lower D/E ratio suggests a more favorable balance between debt and equity, aiding in informed decision-making regarding financial health [8]

Summary of Conference Call on US Semiconductors Industry Overview - The focus is on the US semiconductor industry, specifically the foundry services provided by Intel and the potential interest from Qualcomm (QCOM), Apple (AAPL), and Broadcom (AVGO) in Intel's foundry capabilities [1][3]. Key Points Qualcomm's Interest in Intel Foundry - Qualcomm may be evaluating Intel Foundry for its data center ASIC business, which constitutes less than 1% of its sales, approximately $100 million [1][2]. - Job postings from Qualcomm indicate qualifications related to Intel's EMIB packaging technology, suggesting a potential collaboration [1]. Apple and Broadcom's Consideration - Similar job postings from Apple and Broadcom reference Intel technology, indicating they might also be exploring Intel's foundry services [3]. - The focus for all three companies appears to be on packaging rather than front-end foundry services, which typically have lower pricing and margins [4]. Market Dynamics and Challenges - The US government's CHIPS and Science Act aims to boost domestic semiconductor manufacturing, which may motivate companies to consider Intel's foundry [4]. - However, the potential revenue from these engagements is expected to be minimal due to the low margins associated with packaging services [2][4]. - Intel is significantly behind TSMC in terms of technology and market position, which raises doubts about the material impact of these potential collaborations [1][6]. Financial Outlook for Intel - Analysts forecast that Intel's foundry business will continue to struggle, with expectations of a loss of $1.00 EPS in 202X [7]. - There are suggestions that Intel should consider exiting the foundry business due to its financial profile [7]. Ratings and Valuation - The current ratings are Neutral for Qualcomm and Sell for Intel, with target prices set at $180.00 for Qualcomm and $29.00 for Intel [8][9]. Risks Identified Intel - **PC End-Market Dependency**: Intel derives about 90% of its sales from the PC and server segments, making it vulnerable to fluctuations in IT spending [10]. - **Customer Concentration**: Major PC OEM customers account for roughly 45% of Intel's revenue, posing a risk if orders decline [11]. - **Competition**: Direct competition with AMD in the microprocessor market could impact market share and revenue [11]. Qualcomm - **Handset Market Dependency**: Over 60% of Qualcomm's sales come from the handset market, making it sensitive to changes in handset sales [14]. - **Customer Risk**: Approximately 40% of Qualcomm's sales are from Apple and Samsung, which could affect revenue based on their performance [15]. - **Regulatory Risks**: Changes in intellectual property regulations could impact Qualcomm's licensing revenue, which constitutes about 13% of its sales [15]. Conclusion - The interest from Qualcomm, Apple, and Broadcom in Intel's foundry services reflects a strategic move to enhance domestic semiconductor capabilities amid government initiatives. However, the expected financial impact remains limited due to the low-margin nature of packaging services and Intel's technological lag behind competitors like TSMC. The overall outlook for Intel's foundry business appears challenging, with significant risks tied to market dependencies and competition.

Core Insights - The article provides a comprehensive comparison of NVIDIA against its competitors in the Semiconductors & Semiconductor Equipment industry, focusing on financial metrics, market position, and growth prospects [1] Company Overview - NVIDIA is a leading developer of graphics processing units (GPUs), initially used for gaming but now also critical in artificial intelligence applications [2] - The company offers AI GPUs and a software platform called Cuda for AI model development and training, while also expanding its data center networking solutions [2] Financial Metrics - NVIDIA's Price to Earnings (P/E) ratio is 54.18, which is 0.61x lower than the industry average, indicating potential for growth at a reasonable price [5] - The Price to Book (P/B) ratio is 46.24, exceeding the industry average by 5.83x, suggesting the stock may be trading at a premium [5] - The Price to Sales (P/S) ratio stands at 28.38, which is 2.52x the industry average, indicating potential overvaluation based on sales performance [5] - The Return on Equity (ROE) is 28.72%, which is 25.35% above the industry average, reflecting efficient use of equity to generate profits [5] - NVIDIA's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is $31.94 billion, 6.25x above the industry average, indicating strong profitability [5] - The gross profit is $33.85 billion, which is 7.2x above the industry average, highlighting robust earnings from core operations [5] - The company is experiencing significant revenue growth at 55.6%, outperforming the industry average of 31.73% [5] Debt-to-Equity Ratio - NVIDIA has a lower debt-to-equity (D/E) ratio of 0.11, indicating less reliance on debt financing and a healthier balance between debt and equity compared to its top 4 peers [11] Key Takeaways - In the Semiconductors & Semiconductor Equipment industry, NVIDIA's P/E, P/B, and P/S ratios suggest it is relatively undervalued compared to peers, while its high ROE, EBITDA, gross profit, and revenue growth indicate exceptional performance in profitability and operational efficiency [9]

Summary of Microprocessor Market Share Conference Call Industry Overview - The conference call discusses the microprocessor market, specifically focusing on the performance of major players: AMD, Intel, and ARM in the 3Q25 period [1][8]. Key Points Market Performance - Total microprocessor unit shipments increased by 3.9% quarter-over-quarter (QoQ), surpassing the seasonal expectation of 2.4% QoQ, driven by strong server and notebook CPU shipments [1][5]. - Notebook MPU shipments rose by 3.0% QoQ, exceeding the seasonal decline of 1.5% QoQ, while desktop MPU shipments increased by 7.1% QoQ, which was below the seasonal increase of 18.1% QoQ [16]. - Server MPU shipments were up 1.8% QoQ, also above the seasonal expectation of a 5.8% decline, attributed to improved demand from cloud service providers (CSPs) [16]. Company-Specific Insights Intel (INTC) - Intel's overall MPU unit share decreased by 157 basis points QoQ from 65.8% in 2Q25 to 64.2% in 3Q25 [2][9]. - Specific declines in market share: - Notebook MPU share fell by 162 basis points QoQ from 66.9% to 65.3% - Desktop MPU share decreased by 131 basis points QoQ from 63.5% to 62.2% - Server MPU share dropped by 174 basis points QoQ from 63.3% to 61.5% [2][9]. AMD - AMD's overall MPU unit share increased by 108 basis points QoQ from 21.0% in 2Q25 to 22.1% in 3Q25 [3][11]. - Notable gains: - Notebook MPU share rose by 102 basis points QoQ from 17.3% to 18.3% - Desktop MPU share increased by 135 basis points QoQ from 30.2% to 31.5%, marking the highest share in the model's history since 2002 [3][11]. - AMD's server MPU share saw a slight decline of 8 basis points QoQ from 23.7% to 23.6% [3][11]. ARM - ARM's MPU unit share grew by 49 basis points QoQ from 13.2% in 2Q25 to 13.7% in 3Q25 [4][14]. - Gains included: - Notebook MPU share increased by 60 basis points QoQ from 15.7% to 16.3% - Server MPU share surged by 182 basis points QoQ from 13.0% to 14.8%, driven by Nvidia's GB200 strength and increased internal server adoption by CSPs [4][14]. - However, ARM's desktop MPU share slightly decreased by 4 basis points QoQ from 6.33% to 6.29% [4][14]. Analyst Ratings - The firm maintains a Neutral rating on AMD and a Sell rating on Intel [5][17]. Risks and Considerations - **Competition**: AMD faces direct competition from Intel in the microprocessor market and from NVIDIA in the graphics and AI GPU market, which could impact market share and estimates [20]. - **PC End Market**: AMD derives approximately 30% of its sales from the PC industry, making it sensitive to fluctuations in IT spending [21]. - **Customer Risk**: A significant portion of AMD's revenue comes from major clients like Sony and Microsoft, making it vulnerable to changes in their order volumes [21]. - **Macroeconomic Factors**: Intel's revenue is heavily reliant on the PC and server segments, which are also sensitive to IT spending trends [25]. Valuation - AMD's target price is set at $260.00, reflecting a 32x C27E EPS, aligned with historical averages due to high growth in the AI sector [19]. - Intel's target price is set at $29.00, based on its estimated book value, which is lower than the average for semiconductor companies due to reduced profitability [24]. Conclusion - The microprocessor market remains competitive, with AMD and ARM gaining ground at the expense of Intel. The overall market shows resilience with above-seasonal shipment growth, but risks related to competition and market dependency on IT spending persist. Analyst ratings reflect a cautious outlook for Intel while maintaining a neutral stance on AMD.

Core Insights - The article provides a comprehensive evaluation of NVIDIA in the Semiconductors & Semiconductor Equipment industry, focusing on financial metrics, market position, and growth prospects [1][2]. Company Overview - NVIDIA is a leading developer of graphics processing units (GPUs), initially used for gaming but now also critical in artificial intelligence applications [2]. - The company offers AI GPUs and a software platform called Cuda for AI model development and training, while also expanding its data center networking solutions [2]. Financial Metrics Comparison - NVIDIA's Price to Earnings (P/E) ratio is 55.03, which is significantly below the industry average by 0.57x, suggesting potential undervaluation [5]. - The Price to Book (P/B) ratio of 46.97 is 5.44x the industry average, indicating possible overvaluation in terms of book value [5]. - NVIDIA's Price to Sales (P/S) ratio is 28.82, which is 2.35x the industry average, also suggesting overvaluation based on sales performance [5]. - The Return on Equity (ROE) stands at 28.72%, which is 25.3% above the industry average, reflecting efficient use of equity to generate profits [5]. - EBITDA is reported at $31.94 billion, which is 5.94x above the industry average, indicating stronger profitability and cash flow generation [5]. - Gross profit amounts to $33.85 billion, 6.85x above the industry average, highlighting robust earnings from core operations [5]. - Revenue growth of 55.6% surpasses the industry average of 33.09%, demonstrating strong sales expansion and market share gain [5]. Debt to Equity Ratio - NVIDIA has a lower debt-to-equity (D/E) ratio of 0.11 compared to its top four peers, indicating a stronger financial position and less reliance on debt financing [9]. - This favorable balance between debt and equity enhances the company's financial health and risk profile [7][9]. Summary of Performance - Overall, NVIDIA shows strong financial performance with high ROE, EBITDA, gross profit, and revenue growth compared to its peers, reflecting significant growth potential within the sector [7].

Summary of Key Points from Conference Call Industry and Company Overview - **Industry**: North America Hardware & Storage - **Companies Covered**: Intel Corp (INTC.O), Dell Technologies (DELL.N), HP Inc (HPQ.N) Intel Corp (INTC.O) - **Revenue Performance**: Reported a revenue increase of 3% year-over-year (yy) and 6% quarter-over-quarter (qq), beating consensus expectations of a 1% decline yy and 2% increase qq [1] - **Earnings Per Share (EPS)**: Achieved $0.23 EPS, exceeding the Street estimate by $0.02 [1] - **Segment Performance**: - **Client Computing Group (CCG)**: Contributed $8.5 billion in sales, up 8% qq and 5% yy, driven by the transition to Windows 11, AI-PC demand, and a stronger pricing mix [1] - **Data Center and AI (DCAI)**: Generated $4.1 billion, a 5% increase qq but a 1% decline yy, surpassing the $3.9 billion consensus due to a favorable mix and higher enterprise demand [1] - **Guidance**: Provided a revenue guidance of $13.3 billion at the midpoint, flat qq, slightly below the $13.4 billion consensus, with management highlighting tight supply conditions [1] - **Market Outlook**: Positive demand comments suggest favorable conditions for storage/memory and connector components related to infrastructure spending [1] Dell Technologies (DELL.N) - **Valuation**: Target price set at $175 based on a 14.5x P/E multiple applied to the next 24 months EPS estimate, reflecting a premium due to better-than-expected earnings growth and AI portfolio momentum [4] - **Risks**: - **Competitive Intensity**: Facing competition from hyperscalers and cloud computing, impacting demand for traditional enterprise server and storage hardware [5] - **PC & Data Center Demand**: Potential slower recovery in hardware demand and delays in the PC refresh cycle could negatively affect business [6] - **Ownership Structure**: Complicated ownership and governance structure may pose additional risks [6] HP Inc (HPQ.N) - **Valuation**: Target price of $29 based on an 8x P/E on FY27 estimates, aligned with the stock's 5-year average [7] - **Market Conditions**: Anticipated pressures from a prolonged PC refresh cycle, delayed AI impact, and competition in the printing sector, particularly in Japan and China [7] - **Risks**: - **Demand Dynamics**: Post-pandemic spending shifts could impact PC and print demand [9] - **Supply Chain Issues**: Potential supply chain shocks may limit the ability to meet demand [9] - **Pricing Pressure**: Increased pricing intensity in PCs and print due to weakening demand [9] Intel Corp Risks - **Market Dependency**: Approximately 90% of Intel's sales come from PC and server segments, making it highly sensitive to IT spending fluctuations [12] - **M&A Opportunities**: Potential upside if Intel engages in significant accretive acquisitions [12] - **Competition**: Direct competition with AMD in the microprocessor market poses risks to market share and estimates [13] - **Customer Concentration**: The top three PC OEM customers account for about 46% of Intel's revenue, making it vulnerable to order declines [13] - **Macroeconomic Exposure**: Geographic exposure across multiple regions means prolonged economic downturns could adversely affect performance [14] Conclusion The conference call highlighted positive revenue growth and demand outlook for Intel, while Dell and HP face competitive and market challenges. The insights provided are crucial for assessing investment opportunities and risks in the hardware and storage sector.