Group 1 - SMIC (688981) is the largest and most advanced wafer foundry in mainland China, mastering 14nm FinFET technology and maintaining the highest capacity in 28nm mature process domestically, providing foundry services for storage chips [1][40] - The company has received multiple rounds of funding from the National Integrated Circuit Industry Investment Fund, playing a key role in breaking overseas dependence in the domestic storage chip manufacturing sector [1][41] - SMIC also participates in setting multiple industry standards in the domestic semiconductor manufacturing field, consolidating its core voice in the industry chain [1][41] Group 2 - North Huachuang (002371) is a leading semiconductor equipment company in Beijing, providing a full range of equipment for storage chip manufacturing, including etching machines and cleaning machines [2][40] - The company has successfully entered the supply chains of domestic storage manufacturers like Yangtze Memory Technologies and Changxin Memory Technologies, breaking the monopoly of foreign manufacturers [2][41] - With the accelerated expansion of domestic storage chip capacity, North Huachuang's equipment orders continue to grow, and it is establishing new production bases in Tianjin and Yixing [2][41] Group 3 - Hua Hong Semiconductor (688347) focuses on specialty process wafer foundry and is a key player in the domestic storage chip sector, specializing in mature processes like 90nm and 55nm [3][40] - The company provides stable foundry services for domestic storage chip design companies and is expanding its specialty process production lines with support from the National Integrated Circuit Industry Investment Fund [3][41] - Hua Hong has also achieved IATF16949 certification for automotive-grade storage chip processes, enhancing its capabilities in the automotive sector [3][41] Group 4 - Zhongwei (688012) is a global leader in semiconductor etching equipment, with its 5nm etching equipment already in commercial application [4][40] - The company has entered the supply chains of major domestic storage manufacturers and has also penetrated the supply chains of international giants like TSMC and Micron [4][41] - Zhongwei's R&D team comprises over 70% of its workforce, and it holds more than a thousand patents, continuously increasing its market share in the etching equipment sector [4][41] Group 5 - Zhaoyi Innovation (603986) is a leading domestic NOR Flash company, ranking among the top three globally, and is one of the few domestic companies involved in DRAM chip design [5][40] - The company has achieved mass production of 19nm DRAM chips, filling a technology gap in the domestic market, and has established deep cooperation with Changxin Memory Technologies [5][41] - Zhaoyi Innovation has received support from the National Integrated Circuit Industry Investment Fund, focusing its R&D investments on high-end storage chips [5][41] Group 6 - Shengyi Technology (600183) is a leading domestic copper-clad laminate manufacturer, playing a crucial role in the localization of basic materials for the storage chip industry [6][40] - The company has entered the supply chains of major domestic storage packaging companies and provides raw materials to international giants like Samsung and SK Hynix [6][41] - Shengyi is expanding its production capacity in Shaanxi and Jiangsu, with its performance steadily growing alongside the increasing demand for domestic storage chips [6][41] Group 7 - Lanke Technology (688008) is a global leader in memory interface chips, with a market share exceeding 40% for DDR4/DDR5 memory interface chips [7][40] - The company has developed solutions for DDR5 memory interfaces in collaboration with Changxin Memory Technologies, promoting the commercialization of domestic storage modules [7][41] - Lanke's R&D investments focus on cutting-edge fields, extending its product layout into storage control chips [7][41] Group 8 - Shennan Circuits (002916) is a leading domestic printed circuit board manufacturer, focusing on high-end PCB and packaging substrate manufacturing [8][40] - The company has developed storage packaging substrates that meet high reliability and density requirements, entering the supply chains of major domestic storage manufacturers [8][41] - Shennan is also expanding its high-end packaging substrate production lines in Wuxi to further meet the needs of the storage industry [8][41] Group 9 - Jiangbolong (301308) is a leading domestic storage module company, focusing on promoting the application of domestic storage chips in various fields [9][40] - The company has established deep cooperation with domestic storage chip manufacturers and has launched products equipped with domestic storage chips [9][41] - Jiangbolong has acquired the global storage brand Lexar to leverage its overseas channels, increasing its international market presence [9][41] Group 10 - Xian Yicai-U (688783) is a key player in the domestic silicon wafer sector, focusing on the production of 12-inch polished wafers and epitaxial wafers [10][40] - The company has achieved mass production of 12-inch wafers, breaking the monopoly of foreign manufacturers [10][41] - Xian Yicai has received multiple rounds of investment from the National Integrated Circuit Industry Investment Fund, continuously releasing production capacity [10][41] Group 11 - Tuo Jing Technology (688072) is a leading domestic thin film deposition equipment manufacturer, with a market share exceeding 60% for PECVD equipment in domestic storage chip manufacturing [11][40] - The company has entered the supply chains of major domestic storage manufacturers and has also supplied equipment to overseas storage companies [11][41] - Tuo Jing's R&D investment exceeds 30%, continuously launching new equipment suitable for advanced 3D NAND processes [11][41] Group 12 - Shengmei Shanghai (688082) is a leading domestic semiconductor cleaning equipment manufacturer, developing advanced cleaning technologies for storage chip manufacturing [12][40] - The company has entered the supply chains of major domestic storage manufacturers and has also penetrated the supply chains of international giants [12][41] - Shengmei is building a new production base in Shanghai to further meet the equipment needs of storage chip manufacturers [12][41] Group 13 - Huarun Micro (688396) is a leading domestic power semiconductor company, providing packaging and testing services for storage chips [13][40] - The company has expanded its production lines for power semiconductors and storage packaging in Chongqing, enhancing its capabilities in the storage sector [13][41] - Huarun Micro's industrial-grade storage chips have achieved AEC-Q100 certification, enabling them to enter the automotive electronics market [13][41] Group 14 - Changchuan Technology (300604) is a leading domestic semiconductor testing equipment manufacturer, focusing on testing equipment for storage chips [14][40] - The company has entered the supply chains of major domestic storage manufacturers and has received investment from the National Integrated Circuit Industry Investment Fund [14][41] - Changchuan has acquired Singapore's STI company to enhance its competitiveness in the storage testing field [14][41] Group 15 - Changdian Technology (600584) is a global leader in semiconductor packaging and testing, providing high-end packaging services for domestic storage chip design companies [15][40] - The company has established R&D centers in Singapore and South Korea, taking on packaging orders from international giants [15][41] - Changdian has received support from the National Integrated Circuit Industry Investment Fund, continuously expanding its advanced packaging capacity [15][41]

Core Viewpoint - Changdian Technology has confirmed that SANDISK CHINA LIMITED and its affiliates will continue to be the main or sole customer for a period of time, indicating a stable customer relationship and potential revenue continuity for the company [2]. Group 1: Company Information - Changdian Technology's Shanghai production includes iNAND flash memory modules, SD, and MicroSD storage devices, which are widely used in mobile communications, industrial IoT, automotive, smart home, and consumer electronics [2]. - The company possesses extensive experience in Flash and DRAM products and maintains close cooperation with global memory manufacturers, enhancing its competitive position in the market [2].

Core Insights - The demand for AI computing power is surging, pushing chip power consumption to its limits, with traditional packaging methods unable to keep up [3][6] - Advanced packaging technologies, particularly the combination of advanced packaging and Silicon Carbide (SiC), are seen as key solutions to these challenges [5][17] Group 1: Industry Trends - AI model training and data center computing power are expected to grow exponentially, with China's intelligent computing scale projected to reach 1037.3 EFLOPS by 2025, increasing by 40% in 2026 [3] - Traditional packaging methods are failing to manage the heat generated by increased power consumption, with silicon interlayers having a thermal conductivity of only 148 W/m·K [3][6] - The global advanced packaging market is predicted to exceed $79 billion by 2030, with 2.5D/3D packaging experiencing a growth rate of 37% [5] Group 2: Technological Innovations - The core upgrade logic of advanced packaging involves breakthroughs in both materials and processes, with SiC emerging as the optimal interlayer material due to its superior thermal conductivity of 490 W/m·K [7][8] - The transition from 2.5D to 3D packaging, utilizing hybrid bonding technology, has reduced interconnect spacing from 20μm to less than 10μm, resulting in a 30% reduction in signal delay [6][7] Group 3: Market Opportunities - Companies are encouraged to focus on four key areas to capitalize on the growth driven by advanced packaging and SiC technologies: SiC materials and equipment, advanced packaging OSAT, critical materials, and hybrid bonding/3D packaging technologies [12][13][14][15][16] - Domestic companies like TianYue Advanced and Sanan Optoelectronics are positioned to benefit from the upcoming production ramp-up of 12-inch SiC substrates [13][17] Group 4: Equipment and Supply Chain - The equipment sector is crucial for mass production, with domestic manufacturers breaking through foreign monopolies in hybrid bonding machines and CMP equipment [11] - The demand for semiconductor packaging equipment is expected to grow significantly, with the market projected to reach 28.27 billion yuan in 2024, a year-on-year increase of 18.9% [11]

Group 1 - The A-share market showed mixed performance on January 19, with the Shanghai Composite Index rising by 0.11%, driven by gains in sectors such as electric equipment, public utilities, and automobiles, while the comprehensive and computer sectors faced declines [1] - The chip technology sector demonstrated strength, with the chip ETF (159995.SZ) increasing by 0.15%, and notable gains in constituent stocks such as Haiguang Information (+3.83%), Chipone Technology (+2.53%), and Zhaoyi Innovation (+2.33%) [1] Group 2 - TSMC held a conference on January 15, providing guidance for capital expenditures in 2026, projected to be between $52 billion and $56 billion, a significant increase of up to 36.9% from the previous year's $40.9 billion [3] - The proportion of capital expenditure allocated to advanced packaging, testing, and mask manufacturing has been revised to 10-20%, up from approximately 10% previously [3] - According to Open Source Securities, TSMC's increased capital expenditure is expected to boost expectations for advanced process capacity expansion, with high-end advanced packaging being essential for AI chips, likely leading to significant demand growth [3]

Summary of JCET Group Co Ltd Conference Call Company Overview - **Company**: JCET Group Co Ltd (600584.SS) - **Industry**: Semiconductor, specifically Outsourced Semiconductor Assembly and Test (OSAT) - **Region**: Asia Pacific, Greater China Key Points and Arguments Market Outlook - **OSAT Market Growth**: The OSAT market is expected to benefit from strong semiconductor sales growth, projected to accelerate from 25% in 2025 to 45% in 2026, driven by AI demand [2][9] - **Revenue Projections**: JCET's revenue is expected to grow by 16% in 2026, up from 8% in 2025, reflecting the overall semiconductor cycle [2][9] Advanced Packaging - **2.5D Packaging**: JCET has launched its XDFOI™ platform, with 2.5D packaging entering volume production in Q3 2025. This segment is expected to contribute approximately US$714 million in revenue, accounting for 10% of total revenue by 2027 [3][11] - **Long-term Profitability**: While near-term profitability is uncertain due to high depreciation and R&D investments, the advanced packaging business is anticipated to be margin-accretive in the long run [3][11] Consumer Business Challenges - **Memory Price Hikes**: The consumer segment, which accounts for 60% of JCET's revenue, is expected to face challenges due to memory price hikes impacting unit growth in the PC and smartphone markets in 2026 [4][17] - **Outsourcing Opportunities**: Despite challenges, increased demand for memory is likely to boost back-end demand, with JCET benefiting from Chinese memory IDMs outsourcing their back-end packaging business [4][17] Financial Performance and Valuation - **Stock Rating Change**: The stock rating has been adjusted from Underweight to Equal-weight, with a price target raised from Rmb23.50 to Rmb48.50 [1][5] - **Current Stock Performance**: JCET's stock has increased by 26% year-to-date, outperforming the Shanghai Composite Index, which rose by 2% during the same period [5] - **Valuation Comparison**: JCET trades at a 2026 P/E of 32x, higher than ASE's 21x, indicating that current prices may reflect the positives of advanced packaging [5][19] Risks and Considerations - **Profitability Uncertainty**: There are concerns regarding the profitability of 2.5D/3D packaging due to high depreciation and R&D costs, which may weigh on near-term earnings [19] - **Policy Risks**: JCET has significant exposure to overseas markets (81% in 2024) and has been affected by US OSAT regulations, creating uncertainty regarding future operations [19] Earnings Estimates - **Revised Estimates**: The 2025 EPS estimate has been lowered by 12%, while 2026 and 2027 EPS estimates have been raised by 7% and 19%, respectively, reflecting expectations of improved margins and revenue from advanced packaging and memory outsourcing [23][24] Conclusion - **Investment Thesis**: The outlook for JCET is cautiously optimistic, with expected revenue growth driven by advanced packaging and AI demand, despite challenges in the consumer segment and potential risks from policy changes and profitability uncertainties [37][19]

Summary of Conference Call on Advanced Packaging in the Semiconductor Industry Industry Overview - The global advanced packaging market is projected to exceed $79.4 billion by 2029, with significant contributions from leading companies like TSMC, which is expected to increase its revenue share to around 10% [3][1] - The advanced packaging sector is experiencing a shift from traditional processes to high-performance engines, driven by technological upgrades [1][5] Key Insights and Arguments - **Technological Advancements**: New technologies such as multi-chip integration are enhancing AI chip performance, with the value of a single COS L chip reaching $15,000 to $17,000, significantly higher than traditional packaging [1][5] - **Price Increases**: The packaging industry has seen substantial price hikes, with companies like ASE announcing a 5% to 20% increase in backend wafer packaging service prices starting Q1 2026, driven by high-end demand and rising raw material costs [1][6] - **Domestic Chip Development**: The domestic computing chip market is expected to see a surge in shipments in 2026-2027, which will accelerate the development of the localized supply chain and create significant investment opportunities in the new packaging sector [1][7] Company-Specific Developments - **Changdian Technology**: The company has achieved mass production of its XDFOI product line, covering advanced fields such as 2.5D/3D heterogeneous integration. Its FOY technology supports multi-chip integration at the 4nm node, with a monthly production capacity expected to reach nearly 3,000 units this year [1][9] - **Tongfu Microelectronics**: The company is deepening its collaboration with AMD and expanding its production lines in various locations to drive technological upgrades and capacity expansion [4][10] - **Yongxi Electronics**: The company has made early investments in 2.5D packaging technology and is actively advancing its projects in Ningbo and Malaysia [11][1] Market Trends and Opportunities - **Testing Equipment Market**: The demand for testing equipment is rapidly increasing due to the AI era, with potential for domestic companies to emerge as billion-dollar enterprises in this sector [4][19] - **Third-Party Testing Companies**: Companies like Weicai Technology are gaining traction as high-end chip testing needs rise, indicating a significant growth potential for third-party testing firms [12][1] - **Investment Recommendations**: Companies such as Huicheng Co. and Changdian Technology are highlighted for their strong positions in the AI chip, storage chip, and automotive electronics sectors, making them attractive investment opportunities [8][1] Additional Insights - The advanced packaging equipment market is still in its early stages but is expected to grow rapidly, with significant opportunities for differentiation from traditional equipment [15][16] - The packaging materials market is evolving, with companies traditionally focused on wafer materials now entering the packaging materials space, indicating a trend towards diversification and growth potential in this area [17][1]

Group 1 - The core viewpoint of the report highlights the significant price increases in semiconductor packaging services driven by strong demand for AI chips and rising raw material costs, with price hikes expected to range from 5% to 30% across various companies [1][4] - TSMC has raised its capital expenditure guidance for 2026 to between $52 billion and $56 billion, a substantial increase of up to 36.9% from 2025, with 10-20% of this investment allocated to advanced packaging and testing [2] - Major companies are actively expanding capacity to meet the growing demand for advanced packaging, with significant investments announced by firms such as Changdian Technology and Tongfu Microelectronics for new facilities and production lines [3] Group 2 - The semiconductor packaging industry is experiencing structural demand growth, particularly for AI and storage chips, leading to a tightening of standard storage chip packaging capacity as resources shift towards advanced packaging [4] - The increase in prices for raw materials such as gold, silver, and copper is contributing to higher packaging costs, prompting packaging companies to raise prices to maintain profitability [4] - Investment recommendations focus on domestic companies actively engaging in high-end advanced packaging, such as Changdian Technology and Tongfu Microelectronics, as well as potential beneficiaries in the sector [5]

Group 1 - As of January 16, the margin trading balance in A-shares reached 27,315.37 billion yuan, an increase of 127.86 billion yuan from the previous trading day, accounting for 1.65% of the A-share circulating market value [1] - The trading volume for margin transactions on the same day was 3,364.9 billion yuan, which is an increase of 184.47 billion yuan from the previous trading day, representing 10.99% of the total A-share trading volume [1] - Among the 31 primary industries, 20 experienced net financing inflows, with the electronics sector leading at a net inflow of 10.279 billion yuan [1] Group 2 - The top individual stocks with net financing inflows exceeding 1 billion yuan included China Ping An, which had a net inflow of 1.332 billion yuan, followed by TBEA, Kweichow Moutai, and others [1] - The report from Huawei indicates that by 2035, the total computing power in society is expected to grow by up to 100,000 times, suggesting a significant upward trend in the semiconductor cycle driven by artificial intelligence [2] - The research from Huajin Securities recommends focusing on the entire semiconductor industry chain, from design and manufacturing to packaging testing and upstream equipment materials [2]

Core Viewpoint - The market experienced fluctuations last week, but the overall trend remains positive with a low probability of systemic risks in 2026, driven by favorable macro policies and industry factors [1][4]. Market Performance - The China National Brand Index rose by 0.60% to 2059.78 points last week, while the Shanghai Composite Index fell by 0.45% and the Shenzhen Component Index increased by 1.14% [2]. - Notable performers included Changdian Technology, which surged by 17.51%, and Huazhong Microelectronics, which rose by 17.36% [2]. Year-to-Date Performance - Year-to-date, Anji Technology has increased by 38.85%, leading the gains, followed by Zhongwei Company at 38.29% and Changdian Technology at over 30% [3]. - Other significant gainers include Huazhong Microelectronics and Keda Xunfei, which rose by 29.02% and 26.67%, respectively [3]. Investment Strategy - Market sentiment has shown considerable volatility, but the impact on liquidity is minimal, primarily affecting short-term emotions [4]. - As annual performance forecasts begin to be disclosed, sectors with strong earnings support are expected to attract more attention from investors [4]. - The investment strategy emphasizes structural selection as key, with expectations of more industries entering a performance realization phase due to domestic policy support [4].

Group 1 - The core index of the National Brand Engineering Index rose by 0.60% last week, closing at 2059.78 points, with strong performances from stocks like Changdian Technology, China Resources Microelectronics, and Glodon [1][2] - The market experienced fluctuations, with the Shanghai Composite Index down by 0.45%, while the Shenzhen Component Index and the ChiNext Index rose by 1.14% and 1.00% respectively [1] - Year-to-date, stocks such as Anji Technology and Zhongwei Company have shown significant gains, with Anji Technology up by 38.85% and Zhongwei Company up by 38.29% [2] Group 2 - Market sentiment has been volatile, with regulatory policies leading to a decrease in speculative trading, but the actual impact on market liquidity is minimal [2] - Starstone Investment indicates that there are still many opportunities in the market, particularly as domestic policies drive supply-demand balance and price recovery, leading to more industries entering the performance realization phase [3] - Looking ahead to 2026, the overall market is expected to trend upwards due to positive macroeconomic policies and industry factors, although increased volatility and operational challenges are anticipated [3]