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Windows Phone 8 Review - The Elixir of Delight
February 21, 2013
The market is greatly underestimating Windows 8, which is fresh, fun, stable, well thought-out, innovative, and falls short of Android and iOS in very few areas, while surpassing them in many. Most of all, it has the secret ability every product desires, the ability to delight.

Rethinking the Technology Sector - Silos, Platforms, Clusters & Pipes
July 10, 2012
One key to investing in the technology sector is understanding the relationships among companies along the value chain. Traditional sector classifications are based on hardware, their constituent components, and software. However, these say nothing of how companies relate to one another. Rather than focus strictly on products, four constructs which better illustrate the relationship between companies are Silos, Platforms, Clusters & Pipes.

Investment Letter – Big Data Times

Delta Flies Over Peaks

October 29, 2014
Delta guided for revenue in 4Q14 to decline across the board, and lowered its outlook for industrial automation in 2014. With passives peaking in the near term post the launch of the iPhone 6 and growth for IA moderating, in-line with China, Delta's lofty valuation is likely to be tested.… More

SPIL Navigates Overhang

October 27, 2014
SPIL beat slightly for 3Q14 but warned of a small inventory overhang for 4Q14. With a weak growth outlook and rich valuation, near term prospects for counter look limited.… More

ARM’s Phone is Losing its Charge

October 22, 2014
ARM's smartphone royalty growth continues to disappoint, and although guidance calls for it to improve in 4Q14, the longer term trend points to continued deceleration. With growth now in question, so too is the valuation.… More

Apple’s Worm has Turned

October 21, 2014
Apple has returned to growth, not only by reinvigorating demand for the iPhone, but by arresting the gradual decline in its ASP. With iPhones selling as fast as they can be made, margins secure for the foreseeable future, and growth having returned, the counter deserves to once again trade in line with its peers.… More

Sunny’s Wolf Finally Appears

October 20, 2014
Sunny 's lens production broke out in September, surpassing 15mn units and proving to investors that internal usage for modules and external shipments to customers are finally growing as promised. The increased lens production, rising resolutions, and the coming of OIS, all spell good news for margins.… More

TSMC Sounds the All-Clear, Largan Begins Climactic Finale

October 16, 2014
TSMC offered up two positive developments: 16nm is being pulled forward 1-2 quarters and inventory in the channel looks under control. In addition, CFO Lora Ho recommitted to a new five year target of pretax earnings maintaining a CAGR of 10% with ROE above 20%. Largan's margins disappointed slightly in 3Q14 due to rising pass-through revenue for Apple, but with the iPhone and iPad ramping in 4Q14 revenue and earnings momentum will be sustained through year-end.… More

Intel’s Best Shot is to Lose Less

October 15, 2014
Signs are emerging of a PC inventory bubble heading into 4Q14. Whether Intel's 4Q14 growth gets shaved by an inventory correction or not, outside of servers, its best hope for long term growth is cutting losses in mobile, where its turnaround strategy remains unproven.… More

Compal’s Boxes Fly out Door, Largan Rides 6 Train

October 9, 2014
Compal posted stronger than expected September revenue bringing 3Q14 in above guidance. Although the market has concerns about the short term impact to earnings from the iPad Mini, the longer term growth trajectory remains in tact. Largan posted a huge September on the back of the iPhone 6.… More

Delta Grows Where it Counts

October 8, 2014
Delta posted slightly disappointing September revenue, although the main engines of its earnings growth, Cyntec and IA, continue to deliver.… More

Samsung Settles on Ocean Floor, Mediatek Outs Old, Novatek Looks Good on TV

October 7, 2014
Samsung's 3Q14 earnings collapsed on a rapid deterioration of its handset business. Unfortunately, the worst is not over. Mediatek posted weak September revenue, but the channel could simply be clearing in advance of new products. Novatek blew past guidance on continued strength from 4K2K TVs.… More

HTC Earns More but Not from Phones

October 3, 2014
HTC reported higher than expected net income but lower than expected operating profits due to rapid margin deterioration. With competition set to intensify in 4Q14 with the arrival of the iPhone 6, the earnings outlook is bleak.… More

Largan Puts Lens on Future, Compal Out of Box, HTC Visits Eye Doc, Apple Watch Count Down

October 2, 2014
Largan purchased some land in the Taichung Science Park which is purportedly earmarked for an expensive new plant. Compal took a bite out of the internet-of-things through an investment in Avalue. HTC finally gave up on its push that less is  more when it comes to cameras. The Apple Watch is now expected to arrive just after Xmas.… More

Company/Strategy Reports

TSMC Meets the Fruit Ninja
July 18, 2014
Comments out of TSMC and ASML have clouded the outlook for foundry growth and brought into question TSMC's Apple business beyond the A8. With utilization set to peak in 3Q14, and inventory at or above seasonal levels, 2014 will be a hard act to follow next year.
2Q14 Strategy: The Road to One
April 21, 2014
The tech food chain is gearing up for Apple's latest bushel of new products, which according to whisperings out of Asia have the potential to reorganize both the mobile and PC market. At the same time, the smartphone market is grappling with its new slow growth reality.
Model Portfolio - 1Q14
April 19, 2014
ARM Sells More of Less
February 7, 2014
ARM's end markets continue to grow quickly in unit terms, but the average value of semiconductor content per unit is falling causing ARM's royalty growth to decelerate rapidly. Although solid earnings growth awaits driven by the continued growth of mobile and non-mobile devices, including the internet of things, the counter warrants a lower valuation more suitable for its slowing growth prospects.
GTI’s 2013 Year in Review – Smartphones Jump the Shark
January 3, 2014
21 longs were up 30.1% since initiation with an average holding period of 316 days and an annualized return of 41.5%, and 18 shorts were down 6.9% since initiation with an average holding period of 358 days and an annualized return of up 10%.
CES 2013 – Six Major Trends Emerge
January 17, 2013
The show had a noticeably sleepier feel than last year, with seemingly less attendees and exhibitors. Even so, six major trends for 2013 emerged including rising resolutions, touch everywhere, W8’s latent potential, the return of integrated mfrs, Intel’s challenges, and HTC’s absence.
More Inside …

Model Updates

Delta Model Update
October 29, 2014
Lowering 2014 and 2015 EPS by 6% and 7%.
ARM Model Update
October 22, 2014
Lowering 2014 and 2015 EPS by 1.7% and 3.1%.
Apple Model Update
October 21, 2014
Raising FY15 EPS by 6.2%.
Sunny Model Update
October 20, 2014
Raising 2014 and 2015 EPS by 4.5% and 22.0%.
TSMC Model Update
October 16, 2014
Raising 2014-2016 EPS 1.4%, 3.0%, and 5.0%.
Intel Model Update
October 15, 2014
Raising 2014 and 2015 to US$2.29 and US$2.44.
More Inside …