Yes. It definitely looks like a value buy. But I am slightly worried about their peak margins. Paper, being a commodity, has very high chances of mean reversion.
My personal opinion
dr.vikas

While looking at the 2022-23 annual results, company has crossed 100% capacity utilisation.
CWIP at the end of H1-2023-24 is only Rs.97 crores. CWIP of Rs.97 crores can only be de-bottle necking. Company has not announced any plans for major capacity increase.

2024 Outlook
Let me first get Non DC market out of the way since I want to look at DC (as was the case with this thread from the start).
Laptop/notebook

1. Laptop/notebook is expected to turn the corner in 2024. Intel’s earnings indicate laptop market has bottomed out.

2. Next year, a lot of hope is on AI to help the laptop market. Windows 12 release with AI features might force users to upgrade their laptop. Windows 12: New features, AI experiences, expected rollout, and everything we know so far | Windows Central. The only caveat is that the features need to be convincing enough.

   • Both AMD and Intel are prepping their laptop processors with higher TOPS (Intel’s Core Ultra Processors Accelerate AI Tasks While Saving You Battery Life – CNET) in anticipation of AI applications.
   • AMD’s phoenix processors (which are very good) had a timid and late penetration into market. It is unclear what the reason was because AMD missed a large window. in 2023 where intel really did not have a great processor that is anywhere near its phoenix processors. Hawk point is incoming in 2024
   • Need to look out for Meteor lake(MTL) and granite rapids processors in 2024. MTL already looks meh compared to phoenix which is last gen. Will not be competitive in front of hawk point. But AMD has been slow with their laptop processors. We can also expect intel to fight tooth and nail in their last bastion. Anything equal to last gen is a win for Intel since OEMs dive if they asked to jump (IMHO). Meteor Lake vs Ryzen 8040 Hawk Point AI battle could be in AMD’s favor as Core Ultra NPU tipped to only match Ryzen 7040 APUs – NotebookCheck.net News and Intel Core Ultra 5 125H “Meteor Lake” CPU Loses To AMD Ryzen 7 7840HS At 65W TDP, Arc iGPU Up To 18% Faster Than Radeon 780M

3. Entry of an qualcomm with its ARM processors for laptop market. –Qualcomm Snapdragon X Elite Performance Preview: A First Look at What’s to Come. Nvidia is also joining the party – https://www.reuters.com/technology/nvidia-make-arm-based-pc-chips-major-new-challenge-intel-2023-10-23/.

4. More entrants expected to join because Microsoft’s Qualcomm exclusivity deal for Windows on Arm reportedly ending soon – The Verge

5. Bottom Line – Laptop/notebook market has bottomed out. There will be market share dilution due to new entrants. Intel is definitely affected… How much is AMD affected? Honestly, anything better than current situation is good. Intel has some special sauce with OEM. Intel asks them to jump they leap (IMHO). The long term handholding really shows.

DC CPU
AMD

1. I expect them to reach 40% revenue share. Current revenue share is 30% according to Forrest Norrod. This is mostly CSPs. Expect enterprise to open up this year following the footsteps of oracle. AMD Lays Out Almost The Entire Data Center Strategy At UBS Event
2. Zen 5 is expected to be launched mid year and most likely in production by 2025

Intel

1. Their “5 nodes in 4 years” plan appears to be a tad late because I recall 2022 was the year for intel 4. Anyway, 2024 end is when they had promised all 5 nodes ready for production – https://www.xda-developers.com/intel-roadmap-2025-explainer/. And as of now, it appears to be on track. https://www.youtube.com/watch?v=SOY0Yh8y-5Q – Anne Kelleher interview. She heads intel fabs.
2. Ready for production is one thing – getting big whales (The QCs/Apples/Amazons/AMDs/NVDAs) to sign up is another. Not to mention Intel CEO keeps throwin shades at its competition (NVDA and AMD) and then keeps saying they will get them as customers. We know how it went with tower acquisition approval from china. The CEO kept talking about Chinese threat to USA for having local fab while also asking for tower acquisition.
3. A single slip and they are gone. The fixed costs are going to eat them up.
4. Even if they get big customers the processors are expected only in 2025 with these nodes. Because the time from supplying PDKs to customers to when the finally get the design takes time.
5. As far as 2024 is concerned, we are looking out for granite rapids. I am expecting delay considering intel track record. Sierra forest goes against bergamo. But then, zen 5 is already sampling to customers. I expect it to be not competitive w.r.t. turing. Let us see.

DC GPU – The real deal from here on
What a gold rush looks like?
A company is using NVDA GPUs as collateral for 2.3B$ loan In Silicon Valley, GPUs are now as good as gold – The Verge

Hardware

1. NVDA has reportedly pulled in schedule to bring in Blackwell B100 in 2024. Most likely H2 2024. This, it appears is because MI300 is competitive w.r.t. the large HBM memory. Good GPU perf is one thing but to be able to feed data to it is another. MI300 does really well here with its 128GB stacked memory. B100 comes with HBM3e. This is also NVDA’s first chiplet architecture. Wondering how NVDA does chiplet while navigating patent landmine laid out by AMD. Example: AMD’s new chiplet GPU patent could finally do for graphics cards what Ryzen did for its CPUs | PC Gamer
2. B100 could give NVDA the one two punch. H100/200 at reduced cost and B100 the latest and greatest. But does nvda have fab space to supply all volume? It appears not. Rumour is

AMD’s AI chip shipments are expected to significantly reach 30% or more of Nvidia’s (CoWoS-based) in 2025… “

3. The order backlog of NVDA gives AMD the window with its MI300X GPUs starting to ship Q124. More on projected sales for AMD later.
4. Currently training is the main driver for GPU sales. Expected to switch to inference with a long tail at some point.
5. Intel – Gaudi – Majority sales is being driven by Xinese market. We need to see how much intel is able to go past US restrictions and sell. Gaudi3 is coming next year.
6. AMD – Theoretical performance is better than H100 for MI300X but what matters is how well software extracts this perf. Some colour here – AMD MI300 Performance – Faster Than H100, But How Much?. Not to mention CUDA reduces precision when required to get perf advantage etc. Optimization

Software

1. Intel – Unsure where exactly they are. Because I do not see any real customers coming in and promising adoption. The comparisons looked fine. I don’t know. Need to work here considering gaudi3 is coming next year.
2. NVDA – everyone knows the CUDA story. NVDA has even gone ahead and started an investment fund to fund CSP startups like coreweave. Not to mention nvidia partner program. Full stack… from software platform to hardware. Like Apple.
3. AMD – ROCm has seen heightened effort from AMD and it is showing in order wins. One thought I missed earlier when comparing ROCm to CUDA was that ROCm or any competitor software does not have to do everything that cuda does. It has to focus on what is the most used in AI world for CSPs right now. They can optimize for the most used case. So achieving competing position against cuda in current large AI market may not be as difficult as I thought. They completely shunned ML perf benchmarks here. Nvidia responded with this. Then AMD responded back with some latest numbers with this. So while NVDA software will make its way into every nook and corner of AI applications, others only have to target the current on demand areas medium term.

My investment is in AMD So I will try to guess AMD price next year based on current expectations based on expected deliveries of MI300x. I did once earlier here. That will be next post.

If the CD ratio needs adjustment due to 75% limit, then the most likely solution would be an extra push by bank for more deposits to get the ratio within limits.