ab 25 February 2025 Global Research First Read Japan Electric Components Sector Feedback from Asian investor trip We visited investors in Hong Kong and Singapore From 17-20 February, we visited investors in Hong Kong and Singapore and had the opportunity to participate in 28 meetings. Cautious views on the electronic components sector predominated throughout 2024. On this visit, there was still a strong sense of caution, but we could detect expectations, albeit slight, regarding a cyclical recovery and edge ...

Asia Pacific Equity Research 24 February 2025 China Cross-border Ecommerce Takeaways from expert call on the impact from new US tariff policies Andre Chang, CFA AC (86-21) 6106 6362 andre.ch.chang@jpmorgan.com SAC Registration Number: S1730520080002 Alex Yao (86 21) 6106 6505 alex.yao@jpmorgan.com SAC Registration Number: S1730523020001 J.P. Morgan Securities (China) Company Limited See page 3 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and see ...

February 26, 2025 INDUSTRY UPDATE On Jan 27, 2025, DeepSeek released R1, its LLM model that directly competes with OpenAI's o1 model in performance, although at a materially lower cost structure (if press reports are accurate). Like DeepSeek-V3, the R1 model has 671 billion parameters with a context length of 128,000. The release of DeepSeek-R1 resulted in downward pressure on many US tech stocks, owing to: RELEVANT DISCLOSURES BEGIN ON PAGE 346 OF THIS REPORT. Portfolio Strategy Artificial Intelligence Gen ...

24 February 2025 Equity Research Report China Technology Equities Servers: Riding on the wave of DeepSeek DeepSeek is driving Cloud capex in China. AI inferencing workloads have been surging, triggered by the growing popularity of DeepSeek R1 in recent weeks. We see that individual user demand has been growing, and the AI model has been increasingly deployed by enterprises and government entities. DeepSeek R1 model's innovations in algorithm reduce inferencing costs sharply and also lead to much less comput ...

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.

M Foundation February 24, 2025 04:09 AM GMT Investor Presentation | Asia Pacific Taiwan – Industrials We are positive on the power equipment industry because US transformer demand remains strong, Industry View Attractive due to increasing backlog from global suppliers and Fortune in 2024, with order visibility to 2027. Taiwan's government also expects AI power demand to reach 2GW in 2028 up 8x vs 2023. Key stock calls: Fortune (1519.TW; OW) as a pure transformer play in the US market for nearly 30 years wit ...

abc 25 February 2025 Global Research China Resources Microelectronics Solid near-term demand priced in Solid near-term outlook, but likely priced in by the market We lower our 2024-26E earnings to factor in 1) more conservative GP margin (cut assumptions by 0.6-0.8ppt) and 2) the negative impact of two 12-inch fabs' ramp-up on CR Micro's bottom line. Despite the solid near-term outlook of the company's quarterly revenue/earnings YoY growth, we keep our Neutral rating unchanged. This is mainly due to: 1) pri ...

A c t i o n | 24 Feb 2025 03:02:27 ET │ 13 pages Kingnet (002517.SZ) +Ve on Dragon Nest: World and Solid Pipeline; Raise TP to Rmb19.5 CITI'S TAKE Kingnet is likely to announce FY24/1Q25 results around late-Apr. We keep FY24E estimates unchanged which is largely inline with Street expectation. However, we see upside revision potential on 1Q25/FY25E estimates given solid debut of Dragon Nest: World on Feb 20 which ranked top-10 by iOS grossing in first 3 days of launch. With 17 games from Kingnet being appro ...

Trump's call to reshore drug production hurt market sentiment; China CRO exposure to US commercial projects limited Trump's signal to reshore drug production caused market concern China's CRO sector plummeted today as media reported that Trump warned the US pharmaceutical companies to reshore their drug production or face tariffs during a private meeting with several US pharma CEOs on 20 February. Despite the negative impact on sentiment, we do not expect China CROs' revenue and earnings to be meaningfully ...

Summary of Semiconductor Production Equipment Conference Call Industry Overview - The conference call focused on the Semiconductor Production Equipment (SPE) industry in Japan, particularly the market dynamics affecting front-end and back-end equipment manufacturers [1][4][7]. Key Companies Discussed - **Ulvac (6728.T)**: Downgraded price target from ¥9,600 to ¥7,700 due to slowing demand for power semiconductor equipment [4][19]. - **Lasertec (6920.T)**: Price target reduced from ¥20,600 to ¥16,400 amid lower demand forecasts [4][19]. - **Tokyo Electron (8035.T)**: Downgraded from Overweight to Equal-weight due to increased market risks [4][19]. - **SCREEN Holdings (7735.T)**: Upgraded from Equal-weight to Overweight, with expectations of solid earnings growth [4][12]. Market Dynamics - **WFE Market Outlook**: Slightly raised outlook for the Wafer Fabrication Equipment (WFE) market, expecting a contraction of 3% YoY to $99 billion in 2025, followed by a 4% growth to $103 billion in 2026 [9][10]. - **China Market Uncertainty**: Significant decline in sales to China expected, with a forecasted 30% YoY fall in sales for the year [8][10]. Companies are adjusting their forecasts based on varying expectations for the Chinese market [8][10]. - **Capex Trends**: Investment appetite is weakening for power devices and mask shop tools, with DRAM makers showing increased interest in EUV exposure tools [3][7]. Financial Adjustments - **Earnings Forecasts**: Earnings forecasts for Ulvac and Lasertec have been trimmed due to lower demand expectations [3][7]. - **Production Cuts**: Anticipated production cuts for most front-end equipment, with unclear timing for market recovery [7][10]. Investment Recommendations - **Preferred Stocks**: Disco and Advantest are recommended as strong back-end demand continues, with both companies operating at full capacity [13][14]. - **Valuation Adjustments**: The industry is viewed as attractive due to lower valuations, with price target upside for most stocks [14][19]. Risks and Opportunities - **Risks**: The potential for a harsh downturn in the Chinese market due to US restrictions poses a significant risk to recovery projections [10][13]. - **Opportunities**: Recovery in electronic device demand and investments in AI-related technologies are seen as potential growth drivers [42][46]. Conclusion - The Semiconductor Production Equipment industry is facing mixed signals, with some companies showing resilience while others are adjusting to a challenging market environment. The focus remains on navigating uncertainties, particularly in the Chinese market, while capitalizing on emerging opportunities in advanced technologies.