Tech Portfolio Overview - LO - Falling Into Red - 2025/04/06

Portfolio Overview

04/06

The rout continues, with the fear of global recession and shutdown of global trade triggered by insane reciprocal tariff. On Tech, we have more clarities now - (1) US content does not need to pay tariff, so NVDA chip within AI server is not included. (2) PC and Smartphone from China/Vietnam/Thailand, and vendors do NOT want to shift production base again, so they will push for price hike to address the tariff impact. (3) AI server assembled in Mexico no need for tariff, while components inside the server exported to US from Taiwan/Thailand would be charged with 32%/36%. Now 70% of AI server is assembled in Mexico and 30% in Taiwan. In other words, assembling in Mexico will be much cheaper than assembling in Taiwan, and AI server will face lower tariff than PC/smartphone.

On AUM $150M, Return since inception is $ -10M, falling into red.

Before any clarity on how tariff will evolve, priority for all market participant is (1) to maintain PnL, (2) caution on retaliatory tariff, (3) prepare for pipeline for high quality names. From now on, we believe only the tech companies with pricing power and flexibility can win out.

Portfolio Changes

We are starting to switching some non-performing value names into quality bluechip tech names with lower multiples, including Shin Etsu, Tokyo Electron, TSMC. We might be a bit early, so we are controlling the sizing of this shift.