Summary of the Investor Presentation on Greater China Tech Semiconductor Industry Overview - Industry Focus: Greater China Tech Semiconductor, specifically the AI semiconductor sector - Key Drivers: Positive outlook on cloud AI demand remains unchanged, with expectations of similar AI capital expenditure intensity from US Cloud Service Providers (CSPs) [1][2] Core Insights - China AI Market: A more constructive view on the China AI market, 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 across various sectors [5] - DeepSeek Impact: The introduction of DeepSeek may trigger an edge AI replacement cycle, as it demonstrates cheaper inferencing capabilities [5] - Supply Chain Dynamics: The ramp-up of China’s foundry supply is becoming stronger and more sustainable, leading to a slower recovery in mature node foundry utilization [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] - MediaTek (Ticker: 2454.TW) has a current price of 1,500.0 TWD with a target price of 1,688.0 TWD, indicating a 13% upside [7] - P/E Ratios: - TSMC's P/E ratio is projected to decrease from 33.4 in 2023 to 17.7 in 2025, reflecting expected earnings growth [6] - MediaTek's P/E ratio is expected to improve from -35% in 2023 to 24% in 2025 [7] Market Trends - AI vs. Non-AI Semiconductor Growth: Non-AI semiconductor growth is projected at only 10% year-over-year in 2024, excluding NVIDIA's AI GPU revenue [9] - Inventory Levels: A decrease in semiconductor supply chain days of inventory is noted, which historically correlates with an increase in semiconductor stock prices [10][11] Long-term Demand Drivers - Tech Diffusion: The reacceleration of AI semiconductor demand is driven by the proliferation of generative AI across various industries [5] - Tech Deflation: Anticipated "price elasticity" is expected to stimulate demand for technology products [5] Additional Insights - AI Computing Wafer Consumption: Expected to reach up to $15.3 billion in 2025, with NVIDIA being the primary consumer [26] - HBM Consumption: Projected to reach up to 20.5 billion gigabits in 2025, with NVIDIA consuming the majority of the supply [29] This summary encapsulates the key points from the investor presentation, highlighting the positive outlook for the AI semiconductor sector in Greater China, the financial metrics of key players, and the broader market trends influencing the industry.
Investor Presentation_ Greater China Tech Semiconductor_ Refreshed AI semi outlook amid DeepSeek impact