Asia Semiconductors & Hardware_ Tech tour takeaways - All Quiet on the Eastern Front_

Summary of Key Takeaways from Asia Semiconductors and Hardware Tech Tour Industry Overview - The report focuses on the Asia Semiconductors and Hardware industry, highlighting insights from a tech tour conducted from February 24 to March 5, 2025, involving over 40 companies across Taiwan, Japan, China, and Korea [2][3]. Core Insights 1. AI Demand and Market Sentiment - Despite prevailing market noise, companies reported no slowdown in data center AI demand, with some positive signals emerging from China. However, the overall bearish sentiment remains [3][4]. - Edge AI is expected to take time to develop, but supply constraints may positively impact conventional memory in the second half of 2025 [3]. 2. Company-Specific Developments - TSMC: No interest in acquiring IDM fabs; expects 1Q25 revenue at the lower end of guidance due to earthquake impacts. TSMC anticipates a 40% CAGR in AI revenue from 2024 to 2029 [4][22]. - MediaTek: Growth driven by mix and ASP rather than volume; anticipates "billion-size" revenue from AI projects in 2026 [4][24][26]. - Novatek: Sees growth from Apple orders but faces risks from potential technology shifts to FinFET and foldable screens [4][27]. - SK hynix and Samsung: Both companies expect a rebound in mainstream memory prices in 2H25, with SK hynix maintaining a cautious outlook on Edge AI [6][13]. 3. Regional Insights - Japan: Companies like TEL and DISCO expect growth in non-China capex to offset declines in China. TEL anticipates top-line growth and stable margins despite challenges [5]. - China: Increased expectations for advanced logic capacity expansion driven by AI demand, with companies like AMEC expecting stronger orders in 2025 [7]. Financial Performance and Ratings - TSMC: Rated Outperform with a target price of NT$1,430 [10]. - **MediaTek**: Rated Outperform with a target price of NT$1,680 [10]. - Samsung: Rated Outperform with a target price of KRW82,000 [12]. - SK hynix: Rated Outperform with a target price of KRW240,000 [13]. - Novatek: Rated Market-Perform with a target price of NT$500 [11]. Additional Considerations - Supply Chain Dynamics: Companies are navigating supply chain challenges, with a notable shift towards local sourcing and production to mitigate risks associated with geopolitical tensions [22]. - Investment in Technology: Firms are focusing on advanced technologies and collaborations, such as MediaTek's engagement with NVIDIA and ARM for AI and datacenter solutions [24][26]. - Market Trends: The report highlights a gradual shift in demand towards AI-related products and services, with companies preparing for long-term growth in this sector [30]. This summary encapsulates the key points from the tech tour, providing insights into the current state and future outlook of the Asia Semiconductors and Hardware industry.