Core Viewpoint - The integrated circuit ETF (562820) opened with a decline of 2.89%, indicating a bearish trend in the sector [1] Group 1: ETF Performance - The integrated circuit ETF (562820) opened at 2.083 yuan [1] - Since its establishment on April 12, 2024, the fund has achieved a return of 114.57% [1] - The fund has experienced a return of -4.65% over the past month [1] Group 2: Major Holdings Performance - Major stocks within the ETF showed significant declines, including: - Cambrian (寒武纪) down 2.42% - SMIC (中芯国际) down 2.50% - Haiguang Information (海光信息) down 2.25% - Lattice Technology (澜起科技) down 2.66% - GigaDevice (兆易创新) down 5.07% - Haowei Group (豪威集团) down 1.31% - Chipone (芯原股份) down 4.01% - JCET (长电科技) down 1.44% - Unisoc (紫光国微) down 2.00% - Tongfu Microelectronics (通富微电) down 2.07% [1] Group 3: Management Information - The ETF is managed by Harvest Fund Management Co., Ltd. [1] - The fund manager is Tian Guangyuan [1] - The performance benchmark for the ETF is the CSI All-Share Integrated Circuit Index [1]

Core Viewpoint - The company is actively developing advanced packaging technologies and expanding its production capacity to seize market opportunities and enhance its competitive edge in the semiconductor industry [1] Group 1: Technology Development - The company is focusing on high value-added products and market hotspots by developing advanced packaging technologies such as fan-out, wafer-level, and flip-chip packaging [1] - The company is also strategically positioning itself in cutting-edge packaging technologies like Chiplet and 2D+ to create a differentiated competitive advantage [1] Group 2: Market Strategy - The company is aligning its development efforts with industry technology trends to capture future market opportunities [1] - The emphasis on long-term planning and capacity expansion indicates a commitment to sustaining growth in a competitive landscape [1]

Core Viewpoint - The company is experiencing continuous growth in its memory business, with its production lines entering mass production and significantly increasing its market share in the relevant field [2]. Group 1: Company Performance - The company's memory chip technology is maturing, leading to a stable entry into mass production for its long-planned memory production lines [2]. - The company's capacity utilization is currently quite full, indicating a strong alignment with market demand and customer structure [2]. Group 2: Market Dynamics - The company's capacity utilization will fluctuate based on changes in market supply and demand, as well as customer structure [2].

Core Viewpoint - The integrated circuit ETF (159546) opened with a decline of 1.81%, indicating a bearish trend in the sector [1] Group 1: ETF Performance - The integrated circuit ETF (159546) opened at 1.795 yuan [1] - Since its establishment on October 11, 2023, the fund has achieved a return of 82.90% [1] - The fund's performance over the past month has decreased by 6.56% [1] Group 2: Major Holdings Performance - Major holdings in the ETF include: - SMIC (中芯国际) opened down 0.08% [1] - Cambricon (寒武纪) fell by 2.52% [1] - Haiguang Information (海光信息) decreased by 2.13% [1] - Lattice Technology (澜起科技) dropped by 2.97% [1] - GigaDevice (兆易创新) declined by 5.05% [1] - Haowei Group (豪威集团) fell by 1.18% [1] - Chipone (芯原股份) decreased by 2.10% [1] - JCET (长电科技) dropped by 1.15% [1] - Unisoc (紫光国微) fell by 1.81% [1] - Tongfu Microelectronics (通富微电) decreased by 2.47% [1]

Summary of 3Q25 Results Wrap and Inventory Tracker for China Hardware and Semiconductors Industry Overview - **Industry**: China Hardware and Semiconductors - **Quarter**: 3Q25 Key Points 1. Performance of Tech Hardware and Semiconductors - 21% of companies reported better-than-expected results in 2Q25, down from 35% in the previous quarter, primarily from non-operational sources, Apple casing suppliers, and OSAT [1][2] - Among 29 tech hardware and semiconductor stocks, 6 beat expectations, 4 were in-line, and 19 missed in 3Q25 [2] 2. Inventory Levels - The China tech inventory tracker indicates healthy inventory levels for consumer electronics hardware in 3Q25, while AI hardware remains high due to strategic stocking [1][3] - DIO (Days Inventory Outstanding) for passive components and distributors was low, while DIO for TV, optical communications, and networking reached a 5-year high [3] 3. Apple and Android Supply Chains - The Apple supply chain is expected to experience profit-taking following an upward revision in iPhone build plans, with a projected 95 million iPhone 17 builds in 2H25 [7] - Android supply chains are under pressure due to anticipated profit squeezes from rising memory prices [2][8] 4. AI Hardware Growth - AI supply chains are expected to show high growth visibility in 2026, with upstream material lock-in, capacity expansion, and margin delivery as key themes [1][2][9] - The AI sector may face a slowdown from November to February due to a lack of catalysts, but long-term growth remains promising [9] 5. Localization Trends - Strong localization demand is noted among Chinese mature semiconductors, driven by uncertainties in supply from US vendors [2][11] - The "China-for-China" trend is gaining traction, with international semiconductor vendors increasingly partnering with local firms [11] 6. Company-Specific Insights - **Lens Tech**: Expected to benefit from iPhone cover glass upgrades and AI edge devices, with a target price of Rmb38 [10] - **Victory Giant (VGT)**: Anticipated to see robust growth due to AI-related PCB demand, with a target price of Rmb407 [10] - **Sunny Optical**: Likely to benefit from multiple growth engines in 2026, including automotive and AI smart glasses, with a target price of HK$103 [10] 7. Semiconductor Market Dynamics - Chinese semiconductor makers are experiencing rising inventory levels due to softer consumer demand and seasonal stocking [11] - The automotive sector showed signs of stabilization in 4Q25, ahead of new EV purchase tax incentives starting January 2026 [11] 8. Revenue and Growth Projections - Global smartphone shipments grew by 2.6% YoY in 3Q25, while TV shipments declined by 4.9% YoY [6][8] - Revenue growth for smartphone components suppliers was reported at 9% YoY, with net profits increasing by 35% YoY [6] 9. Challenges and Risks - Concerns over memory price hikes are expected to pressure profit margins for smartphone manufacturers [8] - The semiconductor industry faces oversupply issues, particularly in power discrete components, which may hinder recovery [2][11] 10. Analyst Recommendations - Analysts have downgraded certain stocks, such as Sanan, to Sell due to lack of recovery signs, while maintaining Buy ratings on companies like ASMPT and Chroma due to their strong market positions and growth potential [2][11] This summary encapsulates the key insights and trends from the 3Q25 results wrap and inventory tracker for the China hardware and semiconductor industry, highlighting performance metrics, inventory levels, supply chain dynamics, and company-specific forecasts.

Market Overview - The semiconductor sector experienced a decline of 1.13% on November 7, with Daway Technology leading the drop [1] - The Shanghai Composite Index closed at 3997.56, down 0.25%, while the Shenzhen Component Index closed at 13404.06, down 0.36% [1] Top Gainers in Semiconductor Sector - Kangqiang Electronics (002119) saw a significant increase of 10.02%, closing at 21.08 with a trading volume of 745,900 shares [1] - Wentai Technology (600745) rose by 9.70%, closing at 45.00 with a trading volume of 902,200 shares [1] - Changguang Huaxin (688048) increased by 9.01%, closing at 87.50 with a trading volume of 268,200 shares [1] Top Losers in Semiconductor Sector - Daway Technology (002213) fell by 5.66%, closing at 26.48 with a trading volume of 604,100 shares [2] - Canxin Technology (688691) decreased by 5.28%, closing at 115.73 with a trading volume of 67,900 shares [2] - Fudan Microelectronics (688385) dropped by 4.85%, closing at 57.90 with a trading volume of 136,600 shares [2] Capital Flow Analysis - The semiconductor sector experienced a net outflow of 4.338 billion yuan from institutional investors, while retail investors saw a net inflow of 2.454 billion yuan [2][3] - Notable net inflows from retail investors were observed in Kangqiang Electronics and New Clean Energy, with net inflows of 1.41 billion yuan and 1.15 billion yuan respectively [3] Summary of Trading Data - The trading data indicates a mixed performance among semiconductor stocks, with significant volatility in both gains and losses across various companies [1][2][3]

Investment Rating - The industry rating is "Outperform the Market" (maintained rating) [7] Core Viewpoints - The semiconductor industry is experiencing robust growth driven by AI and domestic substitution, with significant performance improvements across various segments [5][17] - The A-share semiconductor sector achieved total revenue of 1570.74 billion RMB in Q3 2025, with a net profit of 180.60 billion RMB, reflecting a year-on-year increase of 59.91% and a quarter-on-quarter growth of 25.92% [2][28] - The report highlights a structural growth trend, with digital chip design revenue increasing by 35.01% year-on-year and analog chip design net profit soaring by 1422.73% [2][28] Summary by Sections 1. Q3 2025 Semiconductor Performance Summary - The A-share semiconductor sector's revenue reached 1570.74 billion RMB, with a net profit of 180.60 billion RMB, marking a year-on-year increase of 59.91% and a quarter-on-quarter increase of 25.92% [2][28] - The digital chip design segment saw a revenue increase of 35.01% year-on-year, while the analog chip design segment's net profit surged by 1422.73% [2][28] 2. Foundry, Testing, and Equipment Materials - The wafer foundry sector showed a steady recovery with high capacity utilization rates, with SMIC's Q3 utilization rate between 85%-95% and Huahong Semiconductor exceeding 100% [3][15] - The testing segment benefited from demand in AI and automotive electronics, with notable revenue growth from Longi Technology and Tongfu Microelectronics [3][15] 3. IC Design Sector - The SoC sector performed well due to increased penetration of AI hardware, with companies like Rockchip and Amlogic reporting significant profit growth [4][16] - The storage segment is entering a "super cycle," with DRAM prices rising significantly, leading to substantial profit increases for companies like Jiangbolong [4][16] 4. Overall Market Outlook - The global semiconductor market is expected to maintain an optimistic growth trajectory in 2025, driven by AI and domestic substitution efforts [5][17] - The report suggests focusing on storage, power, foundry, ASIC, and SoC segments for performance elasticity, as well as the ongoing domestic substitution in equipment materials and computing chips [5][17]

Investment Rating - The report rates the advanced packaging industry as "stronger than the market" [1] Core Viewpoints - The advanced packaging technology is positioned as a key path to overcome the limitations of Moore's Law, driven by the exponential growth in computing power required for AI and large model training [2][14] - The global advanced packaging market is projected to exceed $79 billion by 2030, highlighting its role as a core growth engine in the semiconductor industry [2][23] - The demand for advanced packaging is surging due to the increasing need for high-performance AI chips, with TSMC's CoWoS technology becoming a critical support process for high-performance AI chips [2][17] Summary by Sections Chapter 1: Growing Demand for Intelligent Computing - The demand for intelligent computing is rapidly increasing, with significant growth in enterprise-level markets [5][9] - China's intelligent computing scale is expected to reach 725.3 EFLOPS in 2024, a year-on-year increase of 74.1% [9][10] Chapter 2: Diverse Packaging Paths - Advanced packaging technologies are evolving rapidly, with a focus on 2.5D/3D packaging solutions that are gaining popularity [2][18] - The global advanced packaging market is expected to grow from $46.1 billion in 2024 to $79.1 billion by 2030, with a compound annual growth rate (CAGR) of 21.71% for 2.5D/3D packaging [23][24] Chapter 3: Investment Recommendations - The report suggests focusing on key players in the advanced packaging sector, such as Changdian Technology, Tongfu Microelectronics, and JCET [2][24]

Core Viewpoint - The integrated circuit ETF (159546) opened with a decline of 2.02%, indicating a bearish trend in the sector [1] Group 1: ETF Performance - The integrated circuit ETF (159546) opened at 1.795 yuan [1] - Since its establishment on October 11, 2023, the fund has achieved a return of 82.41% [1] - The fund has experienced a decline of 9.04% over the past month [1] Group 2: Major Holdings Performance - Major stocks within the ETF showed significant declines, including: - SMIC down 2.49% [1] - Cambricon down 3.33% [1] - Haiguang Information down 2.54% [1] - Lattice Semiconductor down 3.74% [1] - GigaDevice down 5.33% [1] - OmniVision down 2.07% [1] - Chipone down 1.41% [1] - JCET down 3.16% [1] - Unisoc down 2.46% [1] - Tongfu Microelectronics down 3.35% [1]

Market Performance - The AI PC concept index declined by 2.49%, ranking among the top declines in the concept sector as of the market close on November 4 [1] - Within the AI PC sector, companies such as Baiwei Storage, Xinghuan Technology, and Demingli experienced significant declines, while Wen Tai Technology, Haopeng Technology, and China Great Wall saw slight increases of 1.38%, 0.32%, and 0.18% respectively [1] Capital Flow - The AI PC concept sector experienced a net outflow of 3.877 billion yuan, with 37 stocks seeing net outflows, and 12 stocks having outflows exceeding 100 million yuan [2] - Shenghong Technology led the outflow with a net withdrawal of 622 million yuan, followed by Changying Precision, Lingyi Technology, and Tongfu Microelectronics with outflows of 495 million yuan, 294 million yuan, and 278 million yuan respectively [2] - The stocks with the highest net inflows included Pengding Holdings, Haopeng Technology, and Aohai Technology, with inflows of 65.96 million yuan, 23.06 million yuan, and 8.61 million yuan respectively [3] Stock Performance - The top decliners in the AI PC concept included Shenghong Technology (-1.22%), Changying Precision (-5.33%), and Lingyi Technology (-2.30%) [2] - Notable gainers in the sector were Wen Tai Technology (+1.38%) and Haopeng Technology (+0.32%) despite the overall decline [1][3]