Semiconductors

Intel’s cuts will worsen its competitive tailspin

1 Aug 2024

The $120 billion chipmaker plans to stop its investor payout, slash investment and cut 15% of staff in the hope of shoring up its feeble cash flows. Boss Pat Gelsinger had little choice, but these tough measures will make it even harder to catch chief rival TSMC.

Trump lays bare TSMC’s inherent vulnerabilities

17 Jul 2024

The presidential candidate complained Taiwan took America's chip business and is taking subsidies. He wants it to pay for US defence too. For now, the high exposure of the island's $840 bln semiconductor giant to both Washington and Beijing is a dampener on its AI fortunes.

Trillionaire club throws an indulgent theme party

20 Jun 2024

New $3.3 trln leader Nvidia and the five other US members are powered by AI hype. It makes chipmaker Broadcom a good prospect for induction soon. Eli Lilly could easily be the first anti-obesity joiner. Megatrends sparking giddy valuations also make the group much less exclusive.

Intel sketches promising factory blueprints

10 Jun 2024

The chipmaker struck an $11 bln deal with investment shop Apollo to help offset the expense of building a facility in Ireland. By 2040, the cost of such cutting-edge plants could quadruple to $100 bln. Given the solid investment return profile, similar partnerships will abound.

Texas Instruments: don’t mess with Elliott

7 Jun 2024

The $175 bln chipmaker is in a sensible expansion mode, but the pushy hedge fund raises reasonable concerns about cash flow. Even after generous US subsidies, it will take big uplifts in customer orders and market share to justify the investment. There’s scope to scale back.

Trustbusters loom larger for Microsoft than Nvidia

6 Jun 2024

Tech is full of natural monopolies, and artificial intelligence may be no different. Regulators prefer to act quickly to stop abusive actions snuffing out competition. The $3 trln chipmaker’s dominance will be hard to dislodge. The software giant’s AI deals appear more fragile.

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.