Asia Pacific Equity Research 03 December 2024 J P M O R G A N Asian Tech Thoughts from the supply chain on GB200 delays and GB300 status | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

Summary of Endesa SA (ELE SM) Equity Research Company and Industry Overview - **Company**: Endesa SA - **Industry**: Utilities, specifically in the electricity generation, distribution, and sale in Spain, along with involvement in the natural gas sector [9][24] Key Points and Arguments 1. **Investment Strategy**: Endesa is prepared to increase investments in grid infrastructure if the new allowed return is deemed adequate; otherwise, it will enhance its dividend policy, targeting a 5.6% dividend yield by 2025 [1] 2. **Regulatory Developments**: A draft regulatory proposal regarding grid investments is expected by December 2024 or January 2025 [1] 3. **Electricity Demand Outlook**: Management anticipates potential exponential growth in electricity demand over the next three years, despite a historical decline of 0.5% CAGR over the past decade. This is attributed to a surge in grid connection requests [1][2] 4. **Connection Requests**: In 2023, connection requests in Spain reached 30GW, significantly up from 3GW in 2020. By the end of 2024, there are 50GW awaiting connections, with 20GW already committed for future grants [2] 5. **Demand Forecast**: The anticipated additional demand could translate to 80-100TWh, compared to the 33TWh forecast by the PNIEC [2] 6. **Nuclear Phase-Out**: There may be delays in the current phase-out of nuclear plants, as reversing 20% of the current supply could increase CO2 emissions due to reliance on gas plants [1] 7. **Tax Uncertainty**: The Spanish government has not yet included energy companies in a new tax package, but discussions are ongoing. Endesa's investment plan for 2024-2027 does not account for additional taxes [3] 8. **Current Tax Impact**: Endesa has been paying approximately €0.2 billion annually from a 1.2% revenue levy over the past two years [3] Additional Important Information - **Market Capitalization**: Endesa's market cap is approximately €22.0 billion ($24.4 billion) [5] - **Price Target and Rating**: The current price target is €21.00, with a "Hold" rating indicating a potential return of plus or minus 10% within the next 12 months [5][13] - **Recent Performance**: The stock has a 52-week high of €20.84 and a low of €15.85 [5] - **Investment Risks**: Key risks include competition, interest rates, and supply chain issues [10] This summary encapsulates the critical insights from the equity research report on Endesa SA, highlighting the company's strategic direction, market dynamics, and regulatory environment.

2 December 2024 | 7:18PM CST Taiwan PA foundry Downcycle in 2025, with high inventory level and limited technology upgrade; DG AWSC/Win to Neutral/Sell Cellular PA industry downcycle will continue into 2025, with high inventory level We believe the Cellular PA foundry industry downcycle has started from 4Q24, and expect it to continue through 2025, considering (1) the increasing inventory at PA design houses, (2) unfavorable order momentum from both US and China design house customers, and (3) PA foundries' ...

Asia Pacific Equity Research 02 December 2024 J P M O R G A N Asian Tech Key takeaways (and transcript) from expert call on AI ASIC development | --- | --- | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------- ...

KLA Corporation Conference Call Summary Company Overview - **Company**: KLA Corporation (NASDAQ: KLAC) - **Event**: UBS Global Technology and AI Conference - **Date**: December 4, 2024 Key Points Industry Dynamics - **Export Controls Impact**: KLA anticipates a $500 million incremental impact from new export restrictions for 2025, with 70% affecting systems and 30% affecting services [3][4] - **China Business Decline**: KLA expects its China business to decrease by approximately 20% in 2025, down from about 40% in 2024 [4] - **WFE Growth Expectations**: Despite challenges, KLA expects modest growth in wafer fabrication equipment (WFE) spending in 2025, driven by leading-edge investments [7][8] Financial Performance - **Service Growth**: Service revenue growth is projected to be in the high single digits to low double digits, down from a trend of 12% to 14% due to headwinds [5] - **Market Share**: KLA's market share in WFE is expected to increase by approximately 75 basis points, with a potential gain of 20 basis points in 2025 despite challenges in China [8][9] - **Revenue Growth Projections**: KLA anticipates a revenue growth rate of 9% to 11% over time, with operating margins between 40% and 50% [27] Product and Technology Insights - **Advanced Packaging Demand**: KLA's revenue from advanced packaging is projected to grow from $300 million in 2023 to $750 million in 2025, driven by high-performance computing [14] - **Software Integration**: KLA emphasizes the importance of software in its value proposition, with standalone software revenue doubling to $175 million over the past four to five years [42] - **AI Utilization**: KLA is leveraging AI to enhance its systems and improve yield learning cycles, collaborating with NVIDIA on advanced computing architectures [45][46] Market Trends and Customer Behavior - **Backlog and RPO**: KLA's backlog has increased to approximately 10-11 months, reflecting both cyclical and secular changes in customer ordering behavior [47][52] - **Regionalization Effects**: The emergence of government stimulus in Japan and other regions is expected to create opportunities for KLA, particularly in service and support for new foundries [54][56] Challenges and Considerations - **Gross Margin Stability**: KLA's gross margins have been stable around 61% to 62%, with challenges in pushing margins higher due to pricing discipline and market dynamics [28][31] - **China Market Rationalization**: There is a potential for forced consolidation in the Chinese market, which could impact KLA's long-term outlook [20][24] Conclusion - KLA Corporation is navigating a complex landscape with export controls and a shifting market in China, while also capitalizing on growth opportunities in advanced packaging and software integration. The company maintains a positive long-term outlook with expected revenue growth and stable margins, despite short-term challenges.

Company and Industry Overview * **Company**: Intel Corporation (NASDAQ: INTC) * **Industry**: Semiconductor and Technology * **Event**: UBS Global Technology and AI Conference, December 4, 2024 Key Points Foundry Strategy and Execution 1. **Foundry Focus**: Intel remains committed to being a world-class foundry and the western provider of leading-edge silicon to customers [7]. 2. **Customer Engagement**: Intel is actively engaged with customers and working through RFPs, aiming to add more customers to their foundry business [9]. 3. **Investment and ROIC**: The board emphasizes the need for incremental Return on Invested Capital (ROIC) on foundry investments [10]. 4. **CEO Role**: The incoming CEO is expected to have capabilities in both foundry and product sides [11]. Product Strategy and Leadership 1. **Product Focus**: The board wants to build out the products business while standing up the foundry business [14]. 2. **MJ's Promotion**: MJ's promotion to Head of Intel Products and Co-Interim CEO highlights the board's emphasis on the product side [15]. 3. **MJ's Role**: MJ's experience and understanding of customers make her the perfect person for the product CEO role [16]. Manufacturing and Operations 1. **Cultural Change**: A significant cultural change is needed within Intel to transition from IDM 1.0 to a foundry [27]. 2. **Demand Uncertainty**: Intel is moving from a build-to-inventory mindset to a build-to-order mindset [28]. 3. **Customer Focus**: A mindset of customer focus is crucial for success in the semiconductor industry [29]. Technology Development and Nodes 1. **18A Node**: The 18A node is progressing as expected, with several milestones met and many ahead [31]. 2. **14A Node**: The 14A node will address a broader market, including compute, mobile, and other applications [35]. Capital Expenditure (CapEx) 1. **CapEx Planning**: Intel is planning CapEx more conservatively, focusing on high-confidence demand [42]. 2. **Investment Focus**: The focus is on technology development, shell ahead, and capacity level CapEx [53]. 3. **CHIPS Act Grants**: The CHIPS Act grants are not at risk, and Intel is already a third of the way through the milestones [57]. Margins and Financials 1. **Margins**: The biggest challenge for margins next year is Lunar Lake, which is largely fabbed outside [66]. 2. **Foundry Margins**: Foundry margins are expected to improve in 2025 due to cost-reduction improvements and higher mix of EUV wafers [68]. 3. **Product Margins**: Product margins are expected to remain in the low 50s for a couple of years before improving with new product generations [70].

Company and Industry Overview * **Company**: Applied Materials, Inc. (NASDAQ: AMAT) * **Industry**: Semiconductor Equipment and Materials Key Points China Export Restrictions * **Impact**: China's export restrictions on certain semiconductor equipment were not unexpected and have some positive and negative aspects for Applied Materials. * **Business Impact**: Most of Applied's business in China is in mature nodes, so the impact is limited. However, there is uncertainty around ICAPS investment in China and its potential impact on demand. * **Guidance**: Applied Materials did not change its guidance for the quarter due to the restrictions, but it will take time to evaluate the impact on 2025 guidance. Market Dynamics * **Leading Edge**: Leading edge technologies, such as high-bandwidth memory, DRAM, advanced packaging, and leading logic, are driving the strongest market dynamics. * **ICAPS**: ICAPS investment in China is a significant unknown for 2025. The country aims to be self-sufficient in capacity, but it has not yet reached that level. * **China Market**: There is no evidence of consolidation in the Chinese semiconductor ecosystem, and Applied Materials continues to see growth in its customer base. Business Segments * **Services vs. Systems**: Applied Materials does not expect significant changes in the intensity between its services business and equipment business. * **Display Business**: Applied Materials' display business is more intensive in China compared to other regions. * **Growth**: Applied Materials expects the ICAPS node to grow at a mid-to-high single-digit rate over time, driven by secular trends such as EVs and renewable energy. Gate-All-Around (GAA) * **Opportunity**: Applied Materials sees an opportunity to gain share in the transition to GAA due to its integrated solutions and expertise in complex tooling. * **Addressable Market**: The addressable market for GAA is expected to grow by about 15% compared to FinFET. * **Node Size**: The size of the 2nm node is expected to be large, driven by end markets such as PCs, smartphones, and data centers. DRAM * **Share Gains**: Applied Materials has gained share in the DRAM market due to its integrated tool offerings and the increasing complexity of DRAM architectures. * **HBM**: High-bandwidth memory is a key growth area for DRAM, with revenue expected to continue growing in 2025. * **Conventional DRAM**: The DRAM market is expected to continue adding capacity, driven by secular trends. Gross Margin * **Improvement**: Applied Materials' gross margin has been gradually improving due to cost management and pricing improvements. * **Target**: The company is committed to continuing its efforts to improve gross margin. Services * **Growth**: Applied Materials expects low-double-digit growth in its services business due to secular trends and increased service intensity. * **Recurring Revenue**: Approximately 85% of Applied Materials' service revenues are recurring, providing confidence in the business. Capital Return * **Dividend**: Applied Materials is committed to raising its dividend, supported by its recurring service business. * **Capital Expenditure**: The company is expanding its lab footprint to support collaboration with customers, which will increase capital spending in 2025 and 2026.

Summary of Seagate Technology Holdings plc Conference Call Company Overview - **Company**: Seagate Technology Holdings plc (NASDAQ: STX) - **Event**: Wells Fargo 8th Annual TMT Summit Conference - **Date**: December 4, 2024 - **Participants**: Gianluca Romano (CFO), Aaron Rakers (Wells Fargo Analyst) Key Points Discussed Industry and Product Developments - Seagate announced the qualification of its HAMR (Heat-Assisted Magnetic Recording) product for the cloud segment, which is a significant milestone for the company [3] - The qualification process took longer than anticipated, but the current configuration is described as "very, very strong" for cloud applications [3] - The company plans to qualify additional customers for the HAMR product in the upcoming quarters, aiming for a ramp-up in volume by mid-calendar year 2025 [3] Financial Outlook and Market Dynamics - There was a mention of some trepidation regarding market dynamics for the next quarter, indicating potential challenges ahead [2] - The CFO emphasized the importance of understanding the risks associated with forward-looking statements, suggesting a cautious approach to future projections [2] Additional Considerations - The conference call included a focus on investor inquiries regarding recent announcements, highlighting the company's commitment to transparency and communication with stakeholders [2] - The emphasis on cloud segment developments indicates a strategic focus on expanding Seagate's presence in a growing market, which could present future investment opportunities [3]

Company and Industry Overview * **Company**: Fastly, Inc. (NYSE:FSLY) * **Industry**: Cloud Computing, Content Delivery Network (CDN), Edge Computing, Security Key Points and Arguments 1. **Platform Evolution**: Fastly has focused on broadening its platform functionality, unifying solutions, and offering a complete edge solution including content delivery, security, observability, and edge compute [5]. 2. **Customer Diversification**: Fastly aims to diversify its business beyond large media customers, targeting verticals like e-commerce, high tech, transportation, retail, healthcare, and hospitality [10]. 3. **Growth Dynamics**: Outside the top 10 customers, the segment grew 20% year-over-year in Q3, driven by share gains and higher attach rates of various products [9]. 4. **Media Customer Challenges**: Fastly faced volatility in large media customers, but implemented a high-touch customer success motion to address their needs and improve profitability [11]. 5. **Edgio Bankruptcy**: The bankruptcy of Edgio presents an opportunity for Fastly to capture traffic and contracts, potentially accelerating growth in the large media sector [15]. 6. **New Chief Revenue Officer**: Scott Lovett, with experience from Imperva, Akamai, and Cisco, has been instrumental in driving customer acquisition and focusing on security [19]. 7. **Security Focus**: Fastly has invested in security offerings, including DDoS protection, bot mitigation, and web application firewalls, aiming to become a one-stop solution for edge security [26]. 8. **Compute Opportunities**: Fastly's compute architecture focuses on serverless solutions using WebAssembly, offering high performance and developer flexibility [47]. 9. **AI Accelerator**: Fastly launched the AI Accelerator, a product designed to improve user experience for chatbots by reducing latency and costs [50]. Other Important Content * **Financials**: Fastly has repurchased a significant portion of its debt, resulting in a net cash position of over $100 million for the 2024 maturity [37]. * **Operating Margin**: Fastly aims to achieve 35% to 40% incremental operating margin on incremental revenue, driven by organizational efficiency and strategic investments [40]. * **Gross Margin**: Fastly targets 75% to 80% incremental gross margin, supported by scale and revenue from security and compute [41]. * **Free Cash Flow**: Fastly expects to achieve free cash flow breakeven in 2025, despite taking on additional interest expense [43].

Gilead Sciences, Inc. (NASDAQ:GILD) Annual Evercore ISI HealthCONx Healthcare Conference December 4, 2024 11:40 AM ET Company Participants Andrew Dickinson - Chief Financial Officer Conference Call Participants Umer Raffat - Evercore Umer Raffat Excellent. Well, thank you guys for joining us. Really excited to have Gilead management again in Miami. I think the conference is not complete without you being here, Andy. So, thank you for being here. Andrew Dickinson I'm thrilled to be here again. Thank you. Ume ...