Seek .(US:SKLTY)2025-03-12 07:55Summary of the Investor Presentation on Greater China Tech Semiconductor Industry Overview - The focus is on the Greater China Tech Semiconductor industry, particularly in the context of AI and its impact on semiconductor demand and supply dynamics [1][2][5]. Core Insights - Cloud AI Demand: The positive outlook on cloud AI demand remains unchanged, with US Cloud Service Providers (CSPs) maintaining expectations for similar AI capital expenditure intensity [1][2]. - China AI Market: There is a more constructive view on the AI market in China, with MediaTek rated as Overweight (OW) [1][2]. - AI Semiconductor Demand: The demand for AI semiconductors is expected to accelerate due to generative AI applications spreading across various sectors beyond the semiconductor industry [6]. - DeepSeek Impact: The introduction of DeepSeek may trigger an edge AI replacement cycle, as it demonstrates cheaper inferencing capabilities [6]. - Inventory Trends: A decline in semiconductor inventory days historically signals potential appreciation in semiconductor stock prices [6][11]. Key Companies and Ratings - Top Picks: - AI: Alchip, TSMC, MediaTek, ASE, KYEC, AllRing, FOCI, Montage, Silergy - Non-AI: Novatek (Smartphone), ASMedia (PC), Naura, AMEC, ACMR (China WFE), RichWave, WIN Semi (WiFi 7), Hua Hong, SG Micro, SICC, Nuvoton, Yangjie (Specialty) [6]. - Underweight Ratings: UMC, Will Semi, Aspeed, ASMPT, Nanya Tech, Vanguard, Macronix, Parade, Realtek [6]. Financial Metrics and Valuation - TSMC: Current price at 1,000 TWD with a target of 1,388 TWD, indicating a 39% upside. P/E ratios for 2023, 2024e, and 2025e are 30.9, 22.1, and 16.3 respectively [7]. - MediaTek: Current price at 1,505 TWD with a target of 1,688 TWD, indicating a 12% upside. P/E ratios for 2023, 2024e, and 2025e are 31.1, 22.5, and 18.1 respectively [8]. Market Dynamics - Logic vs. Memory Cycle: The logic semiconductor foundry utilization is at 70-80% in the first half of 2025, indicating it has not fully recovered. The increase in semiconductor supply chain inventory days was noted in Q4 2024 [10]. - Non-AI Semiconductor Growth: Excluding NVIDIA's AI GPU revenue, non-AI semiconductor growth is projected at only 10% year-over-year in 2024 [11]. - Memory Stock Prices: Memory stock prices are seen as leading indicators for logic semiconductors, with an In-Line industry view on Greater China semiconductors [13]. Long-term Demand Drivers - Tech Diffusion: The reacceleration of AI semiconductor demand is driven by the proliferation of generative AI across various verticals [6]. - Tech Deflation: Anticipated "price elasticity" is expected to stimulate demand for technology products [6]. Conclusion - The Greater China Tech Semiconductor industry is poised for growth, particularly in AI applications, with key players like MediaTek and TSMC leading the charge. The overall sentiment remains cautiously optimistic, with attention to inventory trends and market dynamics shaping future performance [1][6][11].