원문 보기
The semiconductor market is never boring. And today we're going to learn about three semiconductor updates dealing with TSMC, Broadcom, and AMD. Now, I am going to say for TSMC and AMD is kind of a little bit on the bearish side for Broadcom. I do believe it's going to be more of a bullish sentiment, not just for Broadcom, but the overall AI market in general.
the first thing we're going to take a closer look at is TSMC. So, there are reports by Reuters that TSMC could face about a $1 billion fine because their chips actually ended up to a company that couldn't have their chips, and that's Huawei. So, Huawei is a Chinese company and earlier in late late of 2024, early 2025, we did see there were reports that Huawei's new AI chips included tech made by TSMC.
And like I mentioned, this is a huge red flag as TSMC couldn't be sending chips to Huawei due to export restrictions made by the United States. Now, we're getting kind of closer and just about uh about a month ago in March, we saw that Huawei obtained about 2 million dyes for this 910B AI accelerator chip.
Now, at once kind of the news came out, we heard around January, maybe a few months after the announcement that TSMC cut supplier after chip found in Huawei's chip. So, what ended up happening is there was kind of like a middle company that wasn't on the list um and was ordering the chips for Huawei and then sending it over to Huawei.
And obviously TSMC could say, "Hey, look, we didn't know." And it was just some other company. We can't kind of understand what this other company is doing. But when it comes to chips like this, especially ones that have to deal with things like national security, the AI market and export restrictions, it is under TSMC's kind of they have to do their due diligence.
If someone is ordering kind of this chip that is super small and can kind of be used for advanced solutions, TSMC has to do the digging of where exactly this product is going to end up. Uh so this kind of pro probed a lot of things from the United States. One of the things was TSMC can no longer send any 7 nanometer chips to anybody in China.
Uh so it kind of forced TSMC to be even more and more strict. Uh now obviously it sucks. Um $1 billion it does kind of take a quick hit. Um but I just wanted to kind of show the total cash and short-term investments of TSMC. In their most recent quarter they mentioned about $73 billion in cash and short-term investments.
So $1 billion would suck, but it's not something that would kind of destroy the company. Also, TSMC is making a lot of kind of investments here in the United States. I wonder if those investments will be able to maybe somehow sugar uh should get get kind of a great treatment um by the United States government on this probe, right?
Because we've heard that TSMC is expected to invest an extra $100 billion in the United States. So, not necessarily something crazy in my opinion. And I do believe more of the price action right now is just happening with everything in the stock market. I mean, we can see Nvidia down 1% after being over a hundred earlier throughout the day.
So, that's the first topic. The second topic I want to take a closer look at is Broadcom. So, Broadcom did announce a $10 billion share repurchase authorization. Um and uh the CEO mentions that this reflects the board's confidence in the strength of Broadcom's diversify semiconductor and infrastructure software product franchises.
The new share repurchase program reflects the confidence in their strong cash flow generation and allows to deliver value to their stockholders. Now these repurchase doesn't really have kind of like a time frame and they don't have to spend it all at once. They don't even have to spend it all um at all, right?
Um, but I think this does kind of show some bullish sentiment in my opinion. The stock is still a little bit green after being much higher throughout the day. And the reason is this. Right now, we're hearing a lot of talks about tariffs. We're also hearing a lot of discussions about slowdowns in AI data centers and AI investments.
Things like this, in my opinion, are what I would consider um a boost of confidence to investors to showcase, hey, look, we are putting our money where our mouth is. We're going to invest more into our overall uh stock. This means that we're bullish in this sentiment. And in my opinion, that can also be seen bullish to other AI plays as again is showcasing that they see the market is still pretty pretty strong.
Uh I'm going to make a bold prediction that I believe other big tech players are also going to be spending a nice amount of money in buybacks either accelerating their normal tren and and and this is what I mean. So we can see kind of broadcom in the past four quarters to spend roughly between$1 to2 billion in buybacks.
I think maybe for these upcoming quarters it'll be a little bit on the higher end of that. I think other companies are going to do the same. And this is Broadcom right they had about 9.6 6 um $9.3 billion in cash and they had about $6 billion in free cash flow. I believe there's a lot of other companies out there that have better balance sheets than this and will be following suit with this buying back shares of their overall companies.
I do believe in the long term the volatility is creating some opportunities for those that are able to handle the ride. Um but yeah, so so overall bullish in my opinion for Broadcom and the overall industry. Now the final topic we have here is one of them one of the companies that's extremely extremely taking a hit today is advanced micro devices.
So AMT we can see is down nearly 6% today and from its overall peak right from its overall peak the stock is down nearly 11% for the day. U actually over the main reason is the company did get hit with downgrades by key bank. Uh so first their price target I believe still stayed at around 140. Um but they downgraded AMD to sector weight from overweight.
Um the analyst is questioning a few things. First the possibility of US adding additional export restrictions to China in the AI accelerator space could hit AMD's AI chip revenue which has the MI300 has been their Chinese variant has been doing great in China. Um the second thing is the company is uh analysts are expecting um highlighted risk to AMD's gross margins giving a potential pricing war with Intel and limited opportunities to snack up market share.
Uh so AMD right definitely a big player in the CPU space for the laptop, the desktop and the server CPU market. One thing that A&I has been doing was is kind of cutting down prices. Um, and obviously now with things like tariffs and tariffs impacting things like laptops, um, margins are going to take a hit because of that, which is a pro a consumer market that AMD is very strong in.
And then with Intel releasing kind of the next generation of solutions as well, which tend to be doing a little bit better, it adds even more competitive pressure. And that competitive pressure can add even more to the pricing war. So there's so about two different headwinds impacting the margins in my opinion.
first the tariffs and then we have kind of the competit competition and it doesn't look good for AMD in the short term of things. Uh with Intel, right, one of the biggest things that they can say is Intel um because they are a huge manufacturer player and they just started to kind of do that risk um manufacturing production on their uh United States plans that can help them a little bit with tariffs um discussions in the future.
Uh so Intel does have a little bit more tailwinds in my opinion. Now, some of you might be saying, Jose, I thought semiconductors were not impacted by tariffs. Why is this kind of a big headwind for AMD? So, first two things. Obviously, tariffs can create kind of a macroeconomic environment where maybe consumers can go down.
But while semiconductors themselves aren't tariffs, the finished good is and the finished product is usually uh kind of that that final technology and that is laptops. And I kind of asked artificial intelligence perplexity here and they told me that uh between 2024 I believe here. Yes. So laptop market global industry but that in 2024 China was the top exporter of laptops with about 2 million shipments far exceeding second place which was Vietnam which was nearly 10% the size of that and third place was the United States.
So, if the finished product, this laptop in the consumer market is very crucial for AMD and they're coming mainly from China, a big portion of it. These are companies that are going to definitely get hit with the pricing war, which can kind of add a lot of questions. If things get more expensive, are laptops going to be purchased?
How is consumer sentiments going to go? So, in the short term, I definitely see some headwinds for AMD. Now in the long terms looking at valuations I think these stocks look pretty attractive. I mean AMD right now sitting at about 16.7 maybe a little bit lower a little bit higher right now about 16.8.
U I think in the long term this is trading pretty cheap on forward PE ratios. TSM is sitting at 15.6 and Broadcom sitting at 23.73. Uh so uh our Broadcom obviously a little bit higher right now because they are definitely benefiting from the AI data center from their networking and their custom chip solutions.
But TSM um looking pretty attractive. I'm not going to lie. AMD in my opinion is that one player that has massive growth opportunities but definitely has a lot more risk maybe compared to these other two players. Uh so yeah, that was today's episode taking a closer look at what investors should know about .
Comments 0