Semi’s Investing Resources for Newbies
Semi’s Resources
Semi’s Investing Resources for Newbies: A Thread 🧵
📈Like some of you, earlier this year I was kindly asked by my PM to expand coverage further in TMT into Semiconductors. Probably to my own fault, I was always so focused on my core sector, that I had zero idea how Semis value chain worked other than knowing what NVDA/AMD were doing and how that fed into MSFT, OpenAI, etc.
✅Below I’ve consolidated a series of resources including books, blogs, podcasts, some of which have been recommended to me and others that I found along the way. This list is what I wish someone had given me as a starting point to dip my toes in the sector. It’s by no means meant to be an exhaustive list and please let me know if there’s anything you would add!
🚩These resources are NOT about stocks or if Semi’s are a long now, but a very quick way to learn the businesses themselves including how they make money, margin/pricing power, understanding supply chains, technical aspects of chips, design vs production, etc. I avoided sellside primers as I found these resources to be easier to learn at my own pace (especially podcasts) and also for the benefit of sharing here as not all have access to every brokers research. That being said Stacy Rasgon “Head of Chips” @ Bernstein has done great work and his background in the industry allows him to explain things in a much more distilled way. I’ll be bothering him at some point in the future :)
💭What should you start with? Chips Wars (Book) & NZS Capital Semis 101 on The Knowledge Project (Podcast, but highly recommend reading the transcript)
📱A short few months into this process and it’s amazing how much goes into the semi industry which include but not limited to (not in any specific order):
1) Chemical companies/material companies that provide raw materials needed for production (Entegris)
2) Equipment companies that provide very specific equipment needed to produce different parts of chip and is used by Foundries like TSMC (ASML, AMAT)
3) Memory providers which store data, potentially interesting upcycle with AI due to High Bandwidth Memory (MU, SK Hynix)
4) Logic chip makers that produce the chips that are doing the complex mathematical equations that power our devices & AI models today (NVDA/AMD/INTC)
5)Software used by the chip makers to actually design chips during the R&D process and also allow for simulations to be done on different scenarios before going to production (CDNS/SNPS/ANSS)
6)Companies tasked with the actual production/manufacturing of the chips after receiving the designs sent from the Chip makers. These are often referred to as Foundries or Fabs (TSMC, Samsung)
7)Assembly of all of these components, admittedly have not gotten to this part of the process yet
🔑 If there’s ONE company that I think every aspiring newbie Semi investor needs to learn about FIRST, it’s Intel (INTC) not NVDA. Understanding how involved INTC is in every step of the process, disadvantages of being tied to a Foundry, some of the decisions they made that kept them alive (moving from memory to CPU) and others that led to them missing out on industry changes (like not believing in 2017 that ARM compute in Apple iPhones was high enough margin business to get into) …gives a lot of perspective on the industry. Of course NVDA is incredibly important, especially understanding their evolution through various computing cycles (almost went bankrupt 3 times) and why specifically they are so well positioned for AI.
📕 Books
Chip Wars (To me this is the #1 starting point. As someone that didn’t know a lick about Semi’s, the book goes into the history, product/architecture cycles, geopolitics, different decisions made by countries and corporates alike on different trends)
The Qualcomm Equation (Written in 2004 so misses the QCOM/Apple battle, but very interesting to see how QCOM bet everything on mobile and ended up being right)
Understanding Semi Conductors - A Technical Guide for Non Technical People (Title says it all. Admittedly haven’t gone through it in entirety but it’s a great resource to have and can come back to)
Fabless: The Transformation of the Semiconductor Industry (Explains the shift industry went in separating the R&D/ Design of chips with the manufacturing/production or what is called Fabless model that today is best represented by NVDA and TSMC)
📝 Blogs/Substacks Many of these are much better resources than sellside especially for those that want to actually understand the technical aspect, new launches, performance, and even breaking news on new developments/initiatives. Semi Analysis today is the standard for any real Semi investor and is well worth the money.
Semi Analysis - $500/year
Fabricated Knowledge - $400/year
Techfund.one - Free
Asionometry - Free (YouTube videos that help explain concepts)
Bits and bites - Free
The Global Semi Conductor Value Chain (PDF, not a podcast but very good overview) https://www.stiftung-nv.de/sites/default/files/the_global_semiconductor_value_chain.pdf
🎧 Podcasts: To me this was the easiest way to learn as I personally found it much easier listening to something for an hour than reading something for an hour.
Would definitely start off with NZS Capital episode on The Knowledge Project Podcast/transcript.
For those that don’t know the Acquired podcasts, these guys usually do 2+ hour podcasts diving deep into a business. They are very good at giving historical context, explaining what the company does, and simplifying technical terms as both are VC’s with a tech/comp sci background. Their NVDA 3 part series is ~10 hours long but is a GREAT way to learn about the different computing paradigms/era’s.
Business Breakdowns are shorter, more concise podcasts of about an hour long, that bring buyside investors in as guests to explain and simplify what the company does/the market they operate in, how they make money, and lastly a current view of the business/stock
NZS Capital on Semiconductors: Everything You Wanted to Know (The Knowledge Project). -Podcastlink here. Transcript link (worth printing out and reading)
AMAT (Business Breakdowns):
ASML (Business Breakdowns):
ARM
(Acquired):
(Decoder):
AMD (Business Breakdowns):
CDNS (Business Breakdowns):
Entegris (Business Breakdowns):
INTC
(Business Breakdowns):
(Acquired) -
NVDA (Acquired)
Part 1 (Acquired):
Part 2 (Acquired):
Part 3 (Acquired):
PA Semi (Acquired):
QCOM
(Business Breakdowns):
(Acquired):
AVGO/QCOM Merger (Acquired):
(Decoder):
Samsung (Business Breakdowns):
TSMC (Acquired):