Semiconductors

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

Bain could be third time lucky in Japan

2 May 2024

It's pushing an IPO of Kioxia again after talks to merge the chipmaker collapsed last year. A deal would help pare a $6 bln company loan. Timing is on the sellers' side; demand for chips and Japanese stocks is robust. Rival buyout firms will cheer a successful selldown too.

TSMC’s high-tech stock beset by low-tech problems

18 Apr 2024

Shares of Taiwan's $640 bln tech titan are up 36% this year thanks to its AI chip dominance. Yet they trade at a decade-high valuation discount to peers. Geopolitical risk is one factor, as are sluggish handset sales and over-expansion fears. All look out of TSMC's control.

TSMC’s most complex engineering task is itself

3 Apr 2024

The $625 bln chipmaker has built a monopoly in advanced semiconductors by staying in Taiwan. Now it’s expanding abroad, spurred by subsidies and US-China tensions. Despite higher costs, it can generate decent returns. The bigger challenge will be keeping its technological edge.

Nvidia’s AI stronghold supports $3 trln valuation

21 Feb 2024

The chipmaker’s latest results support the frenzy that tripled its stock price in a year. Unlike other dubious beneficiaries of artificial intelligence hype, the $1.7 trln company’s grip on the market will be hard to wrest. It could soon be worth nearly twice as much again.

Japan’s overseas tech deal crosses financial wires

15 Feb 2024

Electronics design outfit Altium has a smart product and is growing at a decent pace. That doesn't justify Renesas paying $6 bln for the Australian-listed company. Unless the buyer can supercharge revenue, it's another Japanese outbound deal that will generate meagre returns.

Arm’s weirdly high valuation has legs

13 Feb 2024

The $150 bln chip designer’s shares have doubled since last week’s positive outlook. The good news supports a higher valuation, but Arm’s current level is excessive. Yet with a small free float and majority owner SoftBank unlikely to sell any time soon, it may stay in the clouds.

Sam Altman inflates one-man AI bubble

9 Feb 2024

The OpenAI chief wants to boost chip capacity to speed artificial intelligence, possibly raising $7 trln, the Wall Street Journal said. That’s what chipmakers might spend on factories in two decades - and would surpass previous investment booms. It’s mostly a gauge of AI hype.

China tech is running to stand still in AI race

2 Feb 2024

Tencent reckons it's "not too behind" on artificial intelligence. The $340 bln Chinese giant and peers like Baidu made it this far by stockpiling Nvidia chips and devising workarounds to US export curbs. Keeping pace with Western peers will soon be less straightforward, however.  

Capital Calls: China bank privatisation

29 Jan 2024

Concise views on global finance: The troubled regional lender Bank of Jinzhou has received a rare takeover offer from a Chinese province, which could pave the way for similar deals.

Capital Calls: Intel

26 Jan 2024

Concise views on global finance: A 67% rise for the chipmaker’s stock over the past year implied problems have melted away. The company’s warning that first-quarter earnings would fall 60% short of expectations is not the last reality check.

ASML is underplaying its strengths

24 Jan 2024

The semiconductor giant kept its 2024 outlook reined in despite hefty quarterly earnings. US and Dutch export controls that affect chipmaking tools have begun to dip into China sales. But a hefty orders backlog and rising chip demand should help the $330 bln group fly higher.

HPE’s Juniper deal magnifies power of competition

10 Jan 2024

Buying the networking-gear maker for $14 bln is designed to cash in on AI growth. Despite riding the internet boom, however, Juniper has generated less than half the return of the S&P 500 Index since its IPO 24 years ago. It’s a timely lesson on how robust rivalries erode profit.

Samsung is primed to seize AI chipmaking crown

9 Jan 2024

The $390 bln Korean giant could become a one-stop shop for AI semiconductors. Losses in its memory chip unit are probably shrinking, and it is bulking up in logic chips and packaging. Samsung is rapidly moving towards a level of integration that could give it an edge over TSMC.

Intel becomes proxy for Biden’s America Inc

27 Dec 2023

The chip giant’s $3.2 bln subsidy to build a plant in Israel follows similar outlays from the USA and Germany. The investment loop is a unique boon to shareholders: President Biden wants to build an allied semiconductor supply chain to fend off China; he must use Intel to do so.

Capital Calls: ASML’s new CEO

30 Nov 2023

Concise views on global finance: Peter Wennink has delivered a 1,000% shareholder return during his tenure at the Dutch group that is a key player in chip manufacturing. His successor, Christophe Fouquet, faces a more challenging future.

Capital Calls: Arm, Insurers’ climate score

9 Nov 2023

Concise views on global finance: The $56 bln chip group said it can’t be sure when certain customer deals will translate into revenue, undermining its quest for a steadier top line; insurers are still too addicted to dirty energy, a new study shows.

Broadcom deal tempts a treacherously tasty trade

6 Nov 2023

The chipmaker’s $82 bln acquisition of VMware hangs by a Chinese thread. This lingering doubt has created a quirky anomaly on whether a small slug of shares winds up being bought for cash or stock, or not at all. There’s 25% upside to grab, but only for the bravest arbitrageurs.

Biden AI plan is one step in avoiding crypto trap

30 Oct 2023

The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.