Summary of the Conference Call on Greater China Tech Semiconductor Industry Overview - The focus is on the Greater China Tech Semiconductor industry, particularly in the context of AI and non-AI opportunities [1][2]. Core Insights - **Top Investment Ideas**: - Key Overweight (OW) recommendations include FOCI, Novatek, Asmedia, Nuvoton, Espressif, Montage, and Yangjie [5]. - Key Equal Weight (EW) recommendations include Aspeed and ASMPT [5]. - Key Underweight (UW) recommendations include Realtek, Winbond, and Macronix [5]. - **Market Dynamics**: - The broader semiconductor cycle recovery is slow, with AI cannibalization impacting general computing, consumer, and automotive sectors as enterprises prioritize AI investments [5]. - The value of AI semiconductors is increasingly tied to software rather than just semiconductor technology [5]. - China's capital expenditure (capex) is strengthening, leading to a slower recovery in mature node foundry utilization [5]. - An increase in semiconductor inventory days historically signals a negative trend for semiconductor stock price appreciation [5]. - **Long-term Demand Drivers**: - Tech diffusion is expected to drive a reacceleration in AI semiconductor demand, particularly due to generative AI applications across various sectors [5]. - Tech deflation is anticipated to stimulate demand for technology products through "price elasticity" [5]. Financial Metrics and Valuation - **Valuation Comparisons**: - TSMC (Ticker: 2330.TW) has a current price of 1,080.0 TWD with a target price of 1,388.0 TWD, indicating a 29% upside [6]. - UMC (Ticker: 2303.TW) has a current price of 43.0 TWD with a target price of 48.0 TWD, indicating a 12% upside [6]. - SMIC (Ticker: 0981.HK) shows a current price of 50.8 HKD with a target price of 38.0 HKD, indicating a 25% downside [6]. - **Performance Metrics**: - TSMC's P/E ratio is projected to decrease from 33.4 in 2023 to 17.7 in 2025, with EPS growth expected to rebound from -18% to 35% [6]. - UMC's P/E ratio is expected to decline from 8.8 in 2023 to 13.9 in 2025, with EPS growth projected to be negative [6]. Additional Insights - **AI Semiconductor Growth**: - Excluding NVIDIA's AI GPU revenue, non-AI semiconductor growth is projected at only 10% year-over-year in 2024 [11]. - The semiconductor supply chain is seeing a slight decrease in inventory days, which historically correlates with an increase in the semiconductor stock index [11]. - **Technological Advancements**: - TSMC's CoWoS (Chip on Wafers on Substrate) technology is becoming mainstream for 2.5D packaging, with plans for rapid expansion of advanced package plants in Taiwan [14][15]. - The global market for CoWoS is expected to grow significantly, with a projected CAGR of 172% from 2023 to 2030, reaching an estimated market size of US$9 billion by 2030 [36]. - **CPO Technology**: - CPO (Chip on Photonic Integrated Circuit) is highlighted as a power-saving solution that enhances data transmission speeds [26][36]. - FOCI is expected to see significant revenue growth from CPO-related business, primarily driven by partnerships with NVIDIA [38][41]. Conclusion - The Greater China Tech Semiconductor industry is navigating a complex landscape with both challenges and opportunities, particularly in AI and advanced packaging technologies. The focus on long-term demand drivers and strategic investments in key companies will be crucial for navigating this evolving market.

Deutsche Bank Research Asia Economics Asia Macro Insight 22 February 2025 Date Calm before the storm Despite US tariff threats, which prompted many of Asia's authorities to seek a deal with the US (with the exception of China), local markets remained relatively resilient, especially in the absence of aggressive follow-up actions against China. That said, we strike a note of caution, given that the US's comprehensive review and remedial action plan is not scheduled to be completed until April 1. While there ...

+1-212-816-8830 veronica1.clark@citi.com US Economics Weekly Freezing temperatures, frozen markets CITI'S TAKE As Fed officials and markets are in a holding pattern awaiting more data and policy clarity, the limited data that was released this week if anything reinforced our expectation for slowing growth this year. Housing construction and sales fell, and weaker homebuilder sentiment suggests limited upside. Manufacturing PMI remains modestly expansionary, but services PMI surprisingly fell into contractio ...

Summary of Unity Software Inc Conference Call Company Overview - **Company**: Unity Software Inc (U.N) - **Industry**: Internet and Gaming - **Market Cap**: $11.345 billion as of February 20, 2025 - **Current Stock Price**: $28.00 - **Price Target**: Raised from $26.00 to $32.00, with a bull case of $45.00 [1][2][13] Key Points and Arguments 1. **Introduction of Vector**: Unity announced an earlier-than-expected rollout of its new GPU-enabled ad algorithm, Vector, at the end of Q1 2025, which is expected to significantly enhance its advertising business and drive competitive return on ad spend (ROAS) for advertisers [4][9]. 2. **Impact on Financials**: The transition to Vector may create short-term challenges in Q1 as legacy ad products are phased out, but it is anticipated to lead to growth against easier comparisons in 2025 [4][12]. 3. **Growth in Ad Business**: The company is expected to leverage unique data from its Create game engine, which powers 70% of the market, to enhance the effectiveness of its ad campaigns [10][9]. 4. **Competitive Landscape**: Unity is viewed as a minimal competitive threat to AppLovin (APP), as it only needs to defend its market share to achieve growth, particularly in the gaming ads market [9][11]. 5. **4Q Results**: Unity reported strong 4Q results, with revenue and EBITDA exceeding prior estimates by 2% and 20%, respectively. Strategic portfolio revenue grew 4% year-over-year, with the Create segment growing 9% year-over-year [12][13]. 6. **Cost Management**: Stock-based compensation (SBC) decreased by 39% year-over-year, contributing to improved margins. The company also executed layoffs of approximately 300 employees in the Grow segment [12][13]. 7. **Future Guidance**: The company is shifting to quarterly guidance, which disappointed some analysts due to a 6% revenue and 19% EBITDA miss for Q1 estimates. However, this is attributed to the rapid rollout of Vector [12][13]. 8. **Long-term Outlook**: Analysts remain optimistic about Unity's strategy, raising revenue forecasts for 2025 and 2026 by 1%. The long-term estimates are largely unchanged as the company awaits results in the coming quarters [13][12]. Additional Important Insights - **Revenue Projections**: For FY 2025, Unity's revenue is estimated at $1.858 billion, with an EBITDA of $401 million and an EBITDA margin of 21.6% [31]. - **Valuation Methodology**: The price target is based on an enterprise value/sales (EV/Sales) methodology, applying different multiples for the Create and Grow businesses [13][19]. - **Market Positioning**: Unity's unified game engine and ad network are positioned as leading offerings in the gaming and interactive content space, with a consensus rating distribution showing 43% overweight, 50% equal-weight, and 7% underweight [25][26]. Risks and Considerations - **Market Competition**: The competitive landscape remains a concern, particularly with the strong performance of APP's advertising business [11]. - **Execution Risks**: Successful deployment and scaling of the Vector algorithm are critical for achieving projected growth and maintaining competitive advantages [10][9]. This summary encapsulates the key takeaways from the conference call, highlighting Unity Software Inc's strategic initiatives, financial performance, and market outlook.

Nick Maciunas AC (1-212) 834-5671 nicholas.m.maciunas@jpmorgan.com J.P. Morgan Securities LLC Alex Kraus (1-212) 834-5954 alexander.d.kraus@jpmorgan.com J.P. Morgan Securities LLC Sanjana Prasad (1-212) 834-5720 sanjana.t.prasad@jpmchase.com J.P. Morgan Securities LLC David Kaminsky (1-212) 834-5116 david.kaminsky@jpmchase.com J.P. Morgan Securities LLC North America Securitized Products Research J P M O R G A N 21 February 2025 Agency MBS There's a first time for everything Views • Mortgages are on the tig ...

21 February 2025 Big tech builds AGI Disruptive Technologies Global AI infrastructure accelerates The "compute" economy It has been a whirlwind start to 2025 in the race for big tech to build AGI (artificial general intelligence). The Trump administration announced Project Stargate, which promised to fund American AI infrastructure. Then a few weeks ago, the highly market disruptive Chinese AI model DeepSeek was released, sending investors and corporate stakeholders to take stock of the AI boom. What else? ...

February 21, 2025 09:03 PM GMT European Economics Weekly | Europe How Investors See Europe This week, Jens Eisenschmidt and Chiara Zangarelli discuss recent investor debates from marketing in the US and Europe. The focus next week will be on the outcome of the German election and February inflation prints in some countries. In the UK, we will follow a range of BoE speeches. This week in Europe: Key debates with investors across US and Europe We spent the last two weeks travelling, meeting investors in Berli ...

FICC Research Economics 21 February 2025 Emerging Asia Outlook Caution is the mantra against uncertainty Facing certain uncertainty, policymakers in the region are turning more cautious. BI surprised with a hold, following the BSP. Next week, we expect the BoT to also hold, but for the BoK to likely cut with more neutral guidance. Risk sentiment turned modestly positive with Russia-US ceasefire discussions, even as US President Trump continued to provide more details about his tariff plans. With President T ...

Summary of the Conference Call on Asian Industrial Technology - Humanoid Robots Industry Overview - The focus of the conference call is on the humanoid robotics sector, specifically the advancements made by Figure AI with their new product, Helix. Key Points and Arguments 1. Breakthrough in Humanoid Robots - Figure AI has made significant progress with the unveiling of Helix, which is rated 2+ based on a three-score framework: - Perfection in "pet movement" was disappointing - Genuine progress in single task training and performance met high expectations - Breakthrough in multi-task generalization was a big surprise [1][2][3] 2. Technical Aspects of Helix - **Full-upper-body control**: Helix can control movements in the torso, arms, wrists, head, and fingers with up to 35 degrees of freedom (DoF). This end-to-end training is crucial for performing sophisticated humanoid tasks in the future [2][3] - **Object generalization**: Helix can pick up various items, including those it has never encountered before, which is essential for household tasks in unstructured environments. This capability is attributed to the integration of visual and language understanding with precise motor commands [3][4] - **Multi-robot collaboration**: The demonstration of cross-robot interaction using the same Vision-Language-Action (VLA) model was noted as particularly elegant [4] 3. Limitations and Challenges - Helix is not yet capable of "multi-task generalization." The distinction between object generalization and task generalization was emphasized, indicating that while Helix can perform pick-and-place tasks, it has not yet mastered more complex tasks [5][6] - Clarification was sought regarding whether the robots' coordination was fully autonomous or if it relied on human prompts, which could mislead perceptions of their capabilities [7][8] 4. Future Challenges and Expectations - The company is challenged to achieve: - True autonomy in strategizing and planning without human prompts - Scene generalization, allowing Helix to operate in novel environments - Success in more complex single tasks beyond pick-and-place [9][10] 5. Competitive Landscape - Comparison with other players in the market: - Google DeepMind is focusing on robotic policy generalization, while Figure AI is tackling practical challenges with advanced hardware. - Tesla's Optimus has not yet demonstrated significant technological advancements compared to Figure AI, which is focusing on household and service applications [10] Investment Implications - The report recommends an "Outperform" rating for several companies in the robotics and automation sector, including FANUC, Keyence, Inovance, Cognex, Han's Laser, Hikvision, and Harmonic Drive, while suggesting a "Market Perform" rating for Estun [9][11] Additional Important Information - The report includes a detailed analysis of the financial performance and projections for various companies, highlighting the expected earnings per share (EPS) and price-to-earnings (P/E) ratios for 2023 to 2025 [11] This summary encapsulates the key insights and discussions from the conference call regarding advancements in humanoid robotics, particularly focusing on Figure AI's Helix, its capabilities, limitations, and the competitive landscape within the industry.

Summary of the Conference Call Transcript Industry Overview - The focus is on the **China Electric Vehicle (EV)** sector, particularly the advancements in **autonomous driving (AD)** technology and its implications for mass market adoption [1][2][3]. Key Points and Arguments 1. **Autonomous Driving Penetration**: The penetration of higher-level AD functions in EVs is currently at **17%**, with expectations to surpass the **10% inflection point** by July 2025. BYD is leading this charge by making advanced AD features standard in its mass-market models priced below **RMB200K** [2][3]. 2. **Catalyst for EV Consolidation**: The EV market is becoming commoditized post **50% penetration**, and AD is seen as a potential catalyst for further consolidation. The introduction of higher-level autonomy in budget models is expected to enhance competition among OEMs [3]. 3. **Sector Catalysts**: Anticipated developments around the **April Shanghai Autoshow** include more OEMs unveiling AD technologies, potential localization of Tesla's Full Self-Driving (FSD) in China, and increased consumer feedback on smart EV models [4]. 4. **Stock Recommendations**: Preference is given to OEMs transitioning to AD, such as **Geely**, which is expected to gain market share with its autonomous driving strategy launched in March. Battery manufacturers like **CATL** and **REPT** are also highlighted for their resilience amid market fluctuations [5][9]. 5. **Market Risks**: Key risks include slower consumer adoption of higher-level autonomy, pricing pressures in the EV market, unfavorable global trade policies, and weaker domestic consumption sentiment [5]. Additional Important Insights - **Retail and Wholesale Volumes**: In January 2025, the overall auto retail sales decreased by **12% year-on-year** and **32% month-on-month**. The EV penetration rate fell to **41.4%** [13][15]. - **Discount Levels**: The discount level for EVs increased to **9.4% month-on-month** in January 2025, while the discount for internal combustion engine (ICE) vehicles remained stable at **21.9%** [42][45]. - **Battery Market Dynamics**: Lithium carbonate prices have remained largely flat, and LFP batteries hold a **78%** market share in China's EV battery sector as of January 2025 [28][30]. - **Valuation Metrics**: Current valuations for key players include Geely with a target price of **HKD19.30**, CATL at **RMB319.00**, and REPT at **HKD18.50**, indicating potential upsides of **8%**, **17%**, and **58%** respectively [54]. Conclusion The conference call highlights the significant role of autonomous driving in shaping the future of the EV market in China, with key players like BYD and Geely leading the charge. The sector faces both opportunities and risks, particularly in consumer adoption and pricing strategies. The insights provided are crucial for understanding the evolving landscape of the automotive industry in China.