Semiconductors Center Stage

Market Movers

Alpha & Omega Semiconductor (AOSL) reported in-line results with revenue of $165 million vs. consensus of $165 million and an EPS of $0.24 vs. consensus of $0.15. March guidance calls for revenue of $150 million at the mid-point, down with typical seasonality in the consumer electronics industry and the impact of the Lunar New Year. Areas of strength include graphics cards and AI accelerators for data centers, along with smartphones from Chinese suppliers. AOSL is still experiencing weakness in gaming, quick chargers and solar.

Cirrus Logic (CRUS) jumped after hours after crushing consensus revenue and EPS estimates. The company reported revenue of $619 million, at the high end of its guided range vs. consensus of $540 million and EPS of $2.89 vs. an estimated $2.01. March revenue guidance of $320 million is a bit shy of the $331 million analysts were expecting, but will likely have little bearing on the strong December report. Of note, the company stated that it has secured its first wins in Intel’s new “client processor” Lunar Lake with amplifiers, codecs and a new power converter announced last night on the call. The company is currently shipping in two high-end laptops with amplifiers, haptic drivers and a codec. This diversification outside of the smartphone market, and Apple in particular, is a great sign that the company can continue to branch out beyond its largest customer and beyond cameras.

Diodes Incorporated (DIOD) reported mixed results after the close last night with revenue of $323 million vs. consensus of $325 million and EPS of $0.51 vs. consensus of $0.49. For the March quarter, top-line guidance is $305 million plus-or-minus three percent vs. consensus of $324 million. Highlights for the year combined new products with operational improvements, offset by weak end markets including consumer, computing and communications. The company plans to continue to shift towards the automotive and industrial markets despite pockets of weakness in the second half of CY23 driven by excess channel inventory. Additionally, the company expects to drive a higher quality mix of its product portfolio by leveraging its recently introduced SiC (silicon carbide) product family.

AI Highlights:

Elizabeth Kelly, economic advisor to President Biden, has been named director of the new US Artificial Intelligence Safety Institute (USAISI). Instrumental in developing Biden’s AI Executive Order, which was created to take on threats inherent in the developing technology.

The establishment of the USAISI by the White House last year demonstrates the approach taken by policymakers in the U.S. to address the potential risks associated with the rapid advancement of AI. The Biden Administration's AI Executive Order hopes to tackle various AI-related concerns, such as its impact on civil rights and the government's limited adoption of AI. Notably, the executive order mandates that AI companies developing the most substantial and influential AI models must disclose what safety precautions they are putting in place.

Samsung Galaxy S24

The new Samsung flagship(s) are out, the first platform to incorporate AI at the edge for real-time translation, webpage summaries, circle-to-search, photo editing, chat and much more. Most of the AI features are powered by the third generation Snapdragon 8 chipset made by Qualcomm and include:

Live Translation: Samsung's new live translation tool is one of the most compelling AI feature. As the name suggests, the tool can translate a live phone call in real-time voice and text between two different languages. Live translation supports 13 languages and 17 dialects.

Interpreter: Samsung’s AI technology takes Live Translation to the next level by providing a seamless conversation-to-text translation experience. With a split-screen display, individuals engaged in a conversation can read a text transcription of what the other person is saying while maintaining face-to-face interaction. Being an edge application, the new solution works flawlessly even without a cellular data or Wi-Fi connectivity.

Circle to Search: Say goodbye to tedious manual searches. With a simple circle gesture using your finger or Samsung's S Pen stylus, you can instantly launch a Google search for any item displayed on your screen. Whether it's an image, video, or text, our intuitive feature allows you to effortlessly explore further information. From discovering the historical significance of a landmark in a friend's travel photo to finding the perfect pair of shoes, Circle to Search empowers you with instant knowledge and convenience.

Chat Assist: Elevate your writing game with our integrated keyboard feature, Chat Assist. Perfect for composing messages, emails, and social media posts, this intelligent tool analyzes your text and adjusts its tone to match your intended message. Looking for a catchy social media caption? Simply select #social, and your phone will generate a text that captures the desired style. to send a professional message to a colleague? Chat Assist offers a polished version of your original text. With Chat Assist, your words will always make the impact you desire.

Note Assist: Simplify your note-taking experience with our AI-powered Note Assist. This remarkable feature not only generates concise summaries of your notes but also offers translation and formatting capabilities within Samsung's Notes app. Additionally, Note Assist creates eye-catching digital covers for your notes, making them easily identifiable with a brief preview. With Note Assist, organizing and accessing your notes has never been more effortless.

Generative Edit: Similar to the Google Pixel 8's Magic Editor, this cutting-edge tool allows you to make reality-bending edits to your photos. Remove unwanted objects, and watch as Generative Edit seamlessly fills in the background. For your convenience, any image that undergoes significant AI alterations will be watermarked in the metadata, ensuring transparency. Minor edits, such as removing reflections, remain watermark-free, providing you with the freedom to enhance your photos without compromise.

Criminalizing AI-Generated Porn & Deepfakes

Mariella Moon of Engadget has written an interesting article on the EU wanting to ban AI porn and deep fakes that we thought would be interesting to you. It highlights a number of issues that are emerging with the new technology, and relates well to Meta’s decision to tag images as AI generated across its social platforms that we wrote about yesterday after its announcement. Click on the link below to learn more about the proposal:

“The EU wants to criminalize AI-generated porn images and deepfakes”

Chart of the Day

SiTime has had a rough go of it since falling after its meteoric rise in 2020/2021. The stock has been range-bound between $95 and $143 since September of 2022, and could make an excellent candidate for a rebound in 2024 given that it plays across several markets that are showing signs of life. Its market-leading timing solutions are everywhere, used in communications, data centers, automotive applications, aerospace and defense, IoT, etc.

From a technical perspective, it looks like the stock has been making a series go higher lows and lower highs for over a year, forming a nice pennant pattern. The company reports next week on the 13th, so it may be worth exploring as a strong report could generate a strong move to the upside.

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