Shawn Burns is Solve the Riddle

  TSMC Q2 RESULT SUMMARY My thoughts Another strong result from TSMC, with the enormous AI spend driving results. TSMC raised capex from US$54B to a midpoint of $62B, as can be seen in the chart below, which is about double the average of the previous 5 years. TSMC expect revenue growth to be substantial on the capex. TSMC guided for a fall in GM as the effects of the dilution of the 2nm investment, as well as the impact of foreign FABs. Having said that, TSMC has a record of doing better as capacity utilisation and cost control have offset the dilutions in the past. TSMC also indicated that non-AI demand is suffering due to the higher costs involved, but AI is more than filling the gap. As can be seen in the chart below, High-Performance Computing, mainly North American clients, is driving demand. TSMC conceded that some judgement is required to estimate true demand a few years out and realise that clients may be too bullish. They do not want TSMC chips going into invent...

  SUMMARY OF ASML RESULTS CALL My thoughts Exceptionally strong results as ASML customers (eg TSMC), responding to huge demand from their customers (GOOG, AMZN, Meta etc). The rate of growth is better than expected as both memory and logic are now dramatically increasing volumes. Litho intensity is also increasing with more advanced nodes coming on, and lastly, installed base upgrades are increasing as customers want more from machines already in use. Installed base revenues as a percentage of the total equalled all-time records this half, and they are high margin.  Not long ago, there was some scepticism that litho intensity would increase and that memory demand would emerge and installed base demand would increase. Now all are firing.   ASML states that their customers are signing longer-term contracts and have visibility that was not there before, giving confidence to expand production that should last several years. ASML plans to add 30% capacity in 2027 for low...