SEMI - ETF Securities Semiconductor ETF

[peter2]

Another new ETF offering from ETF Securities focusing on the semiconductor industry.

 

[Malown1]

One of my picks for the 2022 tipping.
Semi-conductor shortage worldwide impacting car OEM's and other industries alike.

Cheers.
Malown1

 

[frugal.rock]

I'm considering this.
Seems the $10 mark is resistance.

 

[Dona Ferentes]

Ukraine produces about 70% of the world’s neon gas exports. While neon signs are now mostly antiques, it is a crucial component in semiconductor production. That kind of neon gas has to be refined to ultra-high purity. Two-thirds of it comes from a single factory in Odesa, Ukraine.

If those neon shipments should stop, analysts say global chipmakers probably have about eight weeks’ supply on hand. Then what? The industry is just now starting to recover from COVID-driven disruptions, which in turn affected production at a long list of downstream companies, especially automakers.

 

[Dona Ferentes]

“The sense of shortages hasn't changed at all. We expect the current tight supply will last until March next year at the earliest”

Hiroyuki Sato, CEO, Toshiba Electronic Devices & Storage Corp.

 

[peter2]

Closed my position in SEMI for a loss. While I still think the sector is a vital one and this ETF valuable, there are increasing risks that I can't control (other than how much I'm prepared to lose).

 

[peter2]

The semiconductor sector has now become a political hot potato. The recent US CHIP legislation banning both semiconductor equipment to China and US workers has added to the turmoil.

I've noticed increased volatility in the chip stocks AMD, MU, NVDA recently. Great for day trading but difficult for swing trading.

 

[peter2]

Wow, no interest in SEMI for ages! My last post in Oct 22 marked the low for SEMI. It's been going up since the head & shoulder reversal.

 

[Dona Ferentes]

yep, interesting.

even the 'spurts that focus can't seem to find concordance.

Platinum Asia PAI doesn't hold Nvidia but it's biggest 3 holdings are chip related;

Top 10 Holdings
COMPANY COUNTRY WEIGHT
Taiwan Semiconductor. Taiwan .. 6.2%
Samsung Electronics. South Korea .. 6.1%
SK Hynix Inc. South Korea.. 5.6%

Recent commentary;

Global smartphone and PC shipments are expected to post a third year of decline in 2023 before recovering in 2024. That’s good news for our longstanding positions in South Korean memory chip makers Samsung Electronics and SK Hynix as well as leading semiconductor foundry Taiwan Semiconductor (TSMC). For memory chip makers, 20-30% production cuts led by Samsung mean PC/smart-phone related inventory is now reaching normal levels. This is likely to continue well into 2024 and further drive down supplier inventory. As a result, memory pricing is now starting to stabilise and increase off a low base.
A recovery in chip markets In November, Korean DRAM exports increased by 28% YoY, after contracting for 16 consecutive months. Future capex is now being directed at leading edge nodes, such as High-Bandwidth Memory (HBM) or DDR5 modules rather than legacy capacity. While memory demand for traditional server markets remains weak, this has been offset by strong generative AI investment by cloud service providers. The race to supply HBM to integrate with graphics processing units for generative AI applications is now on, with supply struggling to keep up with demand. A typical NVIDIA H100 GPU uses 80-100GBs of HBM3 memory. SK Hynix had taken the early lead supplying HBM to NVIDIA but Samsung has now also started supplying the US AI leader.

The opportunity in Generative AI continues to grow. Potential use cases are expanding out from data centres and cloud service providers to include areas such as AI-enabled PCs/smartphones and to embedded AI in automotive andindustrial markets.
.

SK Hynix expects 100-200% HBM growth in 2024 with compound annual growth of 60-80% over the next five years. Given this positive outlook, SK Hynix is doubling capacity and Samsung expects to expand supply by 2.5x times in 2024. All the major players are also developing next generation technologies with even higher peak bandwidth and improved power consumption to match NVIDIA’s ambitious AI roadmap. While Samsung and SK Hynix have performed well this year they are still trading at fair valuations of 1.5x and 1.7x trailing book value, respectively.

TSMC is also a beneficiary from a cyclical recovery in PC/ smartphone shipments given these markets represent around 50% of its revenue base. Growing replacement demand for high-end smartphones and PCs should drive strong demand for leading edge nodes. TSMC is currently ramping up capacity with a sizeable share of this capacity booked by Apple for its next generation of devices. TSMC is also the exclusive foundry for NVIDIA’s high performance GPUs and is doubling its advanced packaging capacity to alleviate this critical bottleneck. Currently, high performance AI-related GPU represents 6% of TSMC revenue, however the company expects revenue in this segment to grow by an extraordinary 50% compound per annum over the next five years. TSMC is trading on just 15x 2024 earnings-per-share, which appears attractive for a business surfing both cyclical and structural tailwinds.

 

[peter2]

Update on the holdings within SEMI (from GBLX).

I'm happy with these as a longer term hold as I think the demand for semiconductors will persist for years.
I've bought the dip (~15) and will initially target the prior highs ($19) but expect more.