Core Viewpoint - The establishment of Shanghai Huayao Semiconductor Co., Ltd. marks a significant transformation for Huahong Group, transitioning from pure wafer foundry to a full-chain operation model, indicating an entry into the IDM (Integrated Device Manufacturer) sector [1][2]. Group 1: Company Structure and Operations - Huayao Semiconductor has a registered capital of 1 billion yuan, with ownership shared between Huahong Group and its affiliated partnership, establishing a direct relationship with the parent company [1]. - The business scope of Huayao Semiconductor encompasses all core aspects of integrated circuits, including manufacturing, sales, design, and services, achieving comprehensive coverage of the entire industry chain [1][2]. - The move to IDM signifies a shift from traditional foundry services to a model that integrates chip design and manufacturing, enhancing market competitiveness and product value [2][3]. Group 2: Industry Context and Future Prospects - Huahong Group has built a strong differentiation advantage in the mature process foundry sector, focusing on embedded non-volatile memory, power devices, and analog chips, avoiding homogenized competition in advanced processes [2]. - The initial capital of 1 billion yuan is seen as a starting point for Huayao Semiconductor, with expectations for future funding through various channels to expand IDM capabilities and enhance design-manufacturing collaboration [2]. - The national strategy prioritizes integrated circuits as a key emerging industry, promoting a shift towards a fully autonomous and high-quality development phase in the domestic semiconductor sector [2][3].

Core Insights - The global wafer foundry industry is projected to exceed 1 trillion yuan in revenue for the first time in 2025, reaching 11,485 billion yuan, representing a year-on-year growth of 25.46% compared to 2024 [2][5] - The growth is driven by the ongoing digitalization and intelligence wave, highlighting the increasing demand for chips and the value of the foundry model in the semiconductor industry [2] Group 1: Industry Overview - The top ten wafer foundry companies are expected to generate a total revenue of 11,056 billion yuan in 2025, with a year-on-year growth rate of 26.12%, indicating a concentration of market share among leading firms [5] - The overall market share of the top ten foundry companies is projected to increase to 96.27%, reflecting a "Matthew Effect" where larger firms continue to dominate the market [5] - The industry is characterized by structural growth led by top companies, with smaller firms facing increasing challenges in maintaining market share [5][6] Group 2: Regional Dynamics - Taiwanese companies dominate the foundry landscape, holding four positions in the top ten, with a combined market share of 80.68% in 2025, an increase of 2.15 percentage points from 2024 [6] - TSMC is the leading player, with revenue expected to surpass 8,000 billion yuan in 2025, growing by 2,000 billion yuan from 2024, and capturing nearly 75% of the market share [6] - Chinese mainland firms, including SMIC and HuaHong Group, have made it to the top ten but face challenges in increasing their market share, which is projected to be 10.44% in 2025, down 0.44 percentage points from 2024 [6][7] Group 3: Company Strategies and Trends - SMIC is focusing on local substitution and has identified two main trends: deepening localization and a potential reversal in the storage cycle by Q3 2026, which could alleviate supply shortages in consumer storage [10] - HuaHong Group emphasizes the dual drivers of domestic production and AI, with a focus on power management and MCU chips as core growth areas [13][14] - Chip integration companies like Nexchip are leveraging their strengths in mature processes to capture market opportunities, particularly in AI and automotive sectors [18][19] Group 4: Competitive Landscape - TSMC's capital expenditure is set to reach 40.9 billion USD in 2025, with a focus on advanced processes and AI-driven demand, indicating a robust growth trajectory [26][30] - UMC is navigating a challenging environment with declining demand in consumer electronics, while focusing on high-value mature processes to maintain competitiveness [31][33] - World Advanced is experiencing a renaissance in mature processes, driven by AI demand, and is expanding its capacity to meet the growing needs of the market [35][37] Group 5: Future Outlook - The wafer foundry industry is expected to continue evolving with a focus on advanced packaging and silicon photonics as key growth areas, driven by AI and high-performance computing demands [34][41] - Companies are increasingly adopting strategies that emphasize differentiation through technology and specialization in niche markets, rather than competing solely on scale [20][21]

Core Viewpoint - The latest research from TrendForce indicates that TSMC continues to benefit from advanced processes driven by demand for AI server GPUs, Google's TPUs, and ASICs, achieving a global market share of 70.1% in the foundry industry, solidifying its position as the leader in the sector [1] Group 1: Industry Overview - The total output value of the top ten foundry companies is projected to reach approximately $169.5 billion in 2025, representing a year-on-year increase of 26.3%, setting a new record [1] - Despite some pre-stockpiling of consumer products in the first half of 2026 stabilizing capacity utilization, there are concerns about order volumes and capacity utilization in the second half due to rising memory prices and shrinking demand [1] Group 2: Company Performance - TSMC's wafer shipments are expected to slightly decrease in Q4 2025, but the launch of flagship products like the iPhone 17 will boost 3nm wafer shipments, leading to a 2% revenue growth to $33.7 billion, maintaining a market share of 70.4% [1] - Samsung Electronics, excluding System LSI performance, is projected to achieve a revenue increase of 6.7% in Q4 2025, reaching nearly $3.4 billion, turning from loss to profit, with a market share increase from 6.8% to 7.1% [2] - SMIC is expected to benefit from local market advantages, with a revenue increase of 4.5% in Q4 2025, reaching nearly $2.49 billion, driven by increased wafer shipments and a slight rise in ASP [2] - UMC's revenue in Q4 2025 is projected to grow by 0.9% to approximately $2 billion, maintaining its fourth position in market share [2] - GlobalFoundries is expected to see an 8.4% revenue increase in Q4 2025, reaching $1.8 billion, driven by demand for data center components [2] - Hua Hong Semiconductor Group's revenue is projected to increase by 3.9% in Q4 2025, reaching nearly $1.22 billion, supported by demand for MCUs and PMICs [3] - Tower's revenue is expected to grow by 11.1% in Q4 2025, reaching $440 million, moving up to seventh place in market share [3] - Vanguard's revenue is projected to decrease by 1.6% in Q4 2025 to $406 million due to reduced DDIC orders [3] - Nexchip's revenue is expected to decline by 5.3% in Q4 2025 to $388 million, as some products are postponed to Q1 2026 [3] - PSMC's revenue is projected to grow by 2% in Q4 2025 to approximately $37 million, ranking tenth [3]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 承董事會命 華虹半導體有限公司 董事會主席兼執行董事 白鵬先生 中國上海，二零二六年三月十二日 HUA HONG SEMICONDUCTOR LIMITED 華虹半導體有限公司 （於香港註冊成立之有限公司） （股份代號：01347） 董事會會議日期通知 華虹半導體有限公司（「本公司」）特此通知，本公司謹訂於二零二六年三月二十六 日（星期四）上午十時三十分舉行董事會會議，以商討下列事項： 非執行董事 葉峻 孫國棟 陳博 熊承艷 獨立非執行董事 張祖同 王桂壎太平紳士 封松林 2 1 1. 考慮及批准刊發本公司及其附屬公司截至二零二五年十二月三十一日止經審 核全年業績； 2. 考慮派付末期股息（如有）； 3. 考慮暫停辦理股份過戶登記手續（如有需要）； 4. 考慮召開本公司下一屆股東週年大會；及 5. 商議任何其他事項。 於本公告日期，本公司董事分別為： 執行董事 白鵬 （董事會主席兼總裁） ...

Summary of Hua Hong Semiconductor Ltd Conference Call Company Overview - **Company**: Hua Hong Semiconductor Ltd (1347.HK) - **Industry**: Semiconductors, specifically focusing on power management ICs (PMICs) and specialty technologies Key Points Rating and Price Target Changes - **Rating Upgrade**: From Underweight (UW) to Equal-weight (EW) [1] - **Price Target Increase**: From HK$60.00 to HK$88.00 [1] Demand and Utilization - **AI-Driven Demand**: Strong demand for AI-driven PMICs is supporting specialty node utilization [2][5] - **Domestic AI Chip Production**: Increasing shift towards local wafer manufacturing for AI chips, enhancing demand for companion chips like PMICs [3][10] Specialty Technology Positioning - **BCD Platform**: Hua Hong is a leading provider of BCD (Bipolar-CMOS-DMOS) platforms, crucial for power management and analog applications [3][12] - **Power Consumption Trends**: Domestic AI chips exhibit higher power consumption due to technology gaps and dual-die packaging, driving demand for PMICs [11][12] Capacity and Consolidation - **HLMC Acquisition**: Planned acquisition of HLMC Fab 5 strengthens Hua Hong's specialty technology capacity, but broader consolidation of HLMC assets remains uncertain [4][5] - **Fab 9 Ramp-Up**: The ramp-up of Fab 9 is on track, contributing to improved utilization [1][5] Financial Performance and Estimates - **Earnings Estimates**: EPS estimates for 2026 and 2027 raised by 8% and 12% respectively, with a new 2028 EPS forecast introduced [27] - **Revenue Growth**: Expected revenue growth from US$2,402 million in 2025 to US$3,700 million by 2028 [7][28] - **Gross Margin**: Anticipated gradual improvement in gross margin, although it remains low compared to peers [22][25] Risk Factors - **Visibility on Consolidation**: Limited visibility on broader HLMC consolidation may cap valuation upside [1][5] - **Depreciation Impact**: Rising depreciation from new capacity may pressure gross margins [45][46] Market Position and Valuation - **Market Capitalization**: Approximately US$20.15 billion [7] - **Valuation Methodology**: Price target derived from a residual income model, reflecting a cost of equity of 9.2% and a terminal growth rate of 5.0% [29][39] Investment Drivers - **Growth in Power Semiconductors**: Driven by trends such as electric vehicles, 5G, and the Internet of Things [53] - **Localization Strategy**: Increased localization of AI semiconductors in China expected to drive demand for related PMICs [31] Consensus and Risk-Reward Analysis - **Consensus Rating Distribution**: 57% Overweight, 30% Equal-weight, 13% Underweight [48] - **Risk-Reward Themes**: Positive disruption potential but negative pricing power [49] Conclusion - **Overall Outlook**: The upgrade to Equal-weight reflects a more balanced risk-reward profile, supported by strong demand for AI-related components and improving fundamentals, despite uncertainties regarding consolidation and margin pressures [5][45]

董事會會議日期通知 華虹半導體有限公司（「本公司」）特此通知，本公司謹訂於二零二六年三月二十六 日（星期四）上午十時三十分舉行董事會會議，以商討下列事項： 承董事會命 華虹半導體有限公司 董事會主席兼執行董事 白鵬先生 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 HUA HONG SEMICONDUCTOR LIMITED 華虹半導體有限公司 （於香港註冊成立之有限公司） （股份代號：01347） 執行董事 白鵬 （董事會主席兼總裁） 非執行董事 葉峻 孫國棟 陳博 熊承艷 中國上海，二零二六年三月十二日 1 1. 考慮及批准刊發本公司及其附屬公司截至二零二五年十二月三十一日止經審 核全年業績； 2. 考慮派付末期股息（如有）； 3. 考慮暫停辦理股份過戶登記手續（如有需要）； 4. 考慮召開本公司下一屆股東週年大會；及 5. 商議任何其他事項。 於本公告日期，本公司董事分別為： 獨立非執行董事 張祖同 王桂壎太平紳士 封松林 2 ...

Group 1 - Southbound funds net purchased Hong Kong stocks amounting to 34.48 billion HKD on March 11 [1][3] - The top net purchases included China National Offshore Oil Corporation (10.39 billion HKD), Alibaba-W (6.98 billion HKD), Geely Automobile (5.31 billion HKD), Xiaomi Group-W (1.59 billion HKD), Hua Hong Semiconductor (1.55 billion HKD), and SMIC (1.37 billion HKD) [1] - Notable net sales were observed in Tencent Holdings (24.35 billion HKD), ending its previous eight-day net buying streak, as well as China Construction Bank (8.26 billion HKD), Industrial and Commercial Bank of China (1.85 billion HKD), and Yangtze Optical Fibre and Cable (1.2 billion HKD) [1][4] Group 2 - Southbound funds have net purchased Alibaba for three consecutive days, totaling 20.3096 billion HKD [1]

Market Overview - The A-share market opened with all three major indices rising, with the Shanghai Composite Index up 0.05%, the Shenzhen Component Index up 1.22%, and the ChiNext Index up 2.29% [4][5]. - The Hong Kong market also saw a positive opening, with the Hang Seng Index rising 1.31% and the Hang Seng Tech Index increasing by 2% [7][8]. Sector Performance - CPO concept stocks experienced a strong opening, with companies like Ruiskanda hitting the daily limit and Tianfu Communication rising over 7% [3]. - The oil and gas sector faced significant declines, with multiple companies such as Intercontinental Oil and Shandong Molong hitting the daily limit down, and others like Keli Co. and Tress dropping over 10% [3]. - The computing hardware industry chain rebounded, with CPO and memory sectors leading the gains, while sectors like coal, shipping, and chemicals saw substantial corrections [5]. AI and Technology Trends - In the Hong Kong market, AI concept stocks opened strongly, with Zhiyu rising 12% and Kingsoft Cloud increasing over 5% [6]. - A new open-source AI assistant named OpenClaw has gained significant traction in China, with daily token consumption of major models skyrocketing from 100 billion in early 2024 to 180 trillion by February 2026, and the number of intelligent agents expected to exceed 350 million by 2031 [6].

第 1 頁 共 10 頁 v 1.2.0 FF301 II. 已發行股份及/或庫存股份變動及足夠公眾持股量的確認 1. 股份分類 普通股 股份類別 不適用 於香港聯交所上市 (註1) 是 證券代號 (如上市) 01347 說明 已發行股份（不包括庫存股份）數目 庫存股份數目 已發行股份總數 上月底結存 1,329,882,193 0 1,329,882,193 增加 / 減少 (-) 本月底結存 1,329,882,193 0 1,329,882,193 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | 截至月份: | 2026年2月28日 | 狀態: 新提交 | | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | 公司名稱: | 華虹半導體有限公司（於香港註冊成立的有限公司） | | | 呈交日期: | 2026年3月5日 | | | I. 法定/註冊股本變動 不適用 | | | FF301 減少庫存股份: 普通股 (AA2) 足夠公眾持股量的確認(註4) | 根據《主板上市規則》第13.32D(1)條或第19A.28D(1)條 / 《 ...

| 截至月份: | 2026年2月28日 | 狀態: 新提交 | | --- | --- | --- | | 致：香港交易及結算所有限公司 | | | | 公司名稱: | 華虹半導體有限公司（於香港註冊成立的有限公司） | | | 呈交日期: | 2026年3月5日 | | | I. 法定/註冊股本變動 不適用 | | | FF301 第 1 頁 共 10 頁 v 1.2.0 FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 II. 已發行股份及/或庫存股份變動及足夠公眾持股量的確認 1. 股份分類 普通股 股份類別 不適用 於香港聯交所上市 (註1) 是 證券代號 (如上市) 01347 說明 已發行股份（不包括庫存股份）數目 庫存股份數目 已發行股份總數 上月底結存 1,329,882,193 0 1,329,882,193 增加 / 減少 (-) 本月底結存 1,329,882,193 0 1,329,882,193 足夠公眾持股量的確認(註4) | 根據《主板上市規則》第13.32D(1)條或第19A.28D(1)條 / 《GEM上市規則》第17.37D(1) ...