Core Viewpoint - TSMC is expected to report strong financial performance in 2025, with revenue projected at $122 billion, representing a year-on-year increase of 35.9%, and a gross margin of 59.9% [1] Group 1: Financial Projections - The management anticipates Q1 revenue for this year to be between $34.6 billion and $35.8 billion, with a gross margin of 63% to 65% [1] - The revenue growth forecast for 2026 has been raised to approximately 30%, exceeding the 14% growth outlook for the Foundry 2.0 industry [1] Group 2: Capital Expenditure - TSMC has increased its capital expenditure for this year to between $52 billion and $56 billion, which is viewed as a strategic move to address AI demand [1] - The company aims to advance its leading process and packaging capacity to capitalize on a multi-year expansion cycle [1] Group 3: Market Implications - The initiatives taken by TSMC are seen as positive signals for beneficiaries in the AI supply chain, particularly semiconductor equipment manufacturers [1] - The firm maintains an "outperform" rating on TSMC [1]

Summary of Key Points from Conference Call Records Industry Overview - The focus is on the advanced packaging sector, particularly in the semiconductor testing and packaging industry, which is experiencing heightened market attention due to capacity constraints and rising material costs [1][2]. Core Insights and Arguments 1. **CoWoS Capacity Shortage** TSMC's CoWoS (Chip on Wafer on Substrate) is undergoing continuous expansion, yet the capacity remains insufficient. This has led to demand overflow to other packaging and testing companies such as ASE and KYEC, resulting in tight capacity [1]. 2. **Rising Material Costs** The prices of precious metals like gold, silver, and copper are on the rise, with gold prices increasing over 70%, silver prices rising over 170%, and copper prices up approximately 36% from early to late 2025. This surge in material costs is expected to lead to price hikes in metal packaging materials [1]. 3. **Strong Demand for Storage** The demand for storage solutions, particularly from DRAM and NAND Flash manufacturers, is robust. Companies like Powertech, HwaCom, and Nanya are seeing a surge in orders, pushing capacity utilization rates to near full capacity. Recent price adjustments for testing and packaging services have reached increases of up to 30% [2]. 4. **Potential for Further Price Increases** Several packaging companies have indicated that due to overwhelming orders, there may be a second wave of price increases in the near future [3]. 5. **Increased Capital Expenditure (Capex) Projections** - TSMC's capital expenditure for 2026 is expected to exceed initial forecasts. - ASE has continuously raised its capex projections. - KYEC's capex for 2026 is projected to reach a historical high of 39.4 billion New Taiwan Dollars. - Changdian Technology is also increasing investments, with a capex of 8.5 billion for 2025. - Tongfu Microelectronics is planning a total investment of approximately 3.5 billion for storage and computing testing projects. - Yongxi Electronics intends to invest 2.1 billion for a factory in Malaysia. This indicates that 2026 will be a significant year for capital expenditures in both domestic and international packaging companies, benefiting upstream equipment and materials sectors [4]. Other Important Insights - The overall trend in the semiconductor packaging industry suggests a tightening of capacity and increasing costs, which could present both challenges and opportunities for investors in related sectors. The anticipated capital expenditures signal a strong commitment to growth and expansion within the industry [4].

Group 1 - Intel's Ohio One project, initially touted as the largest wafer factory in the U.S., has faced delays and scale reductions but remains active, with recent contractor job postings indicating acceleration in progress [1] - The Ohio One facility is designed to host up to eight wafer fabs, with the first two expected to begin production by 2030-2031, significantly delayed from the original 2025 target [1] - The first wafer fab will be the 1st fab, followed by the 2nd fab expected to start production a year later, coinciding with Intel's development of its next-generation 14A process [1] Group 2 - Intel's latest Panther Lake mobile CPUs are produced in Arizona and Oregon using the new 18A process, marking a significant advancement for domestic chip manufacturing, although there are no large external customers for this process [2] - CEO Pat Gelsinger has shifted from a pessimistic view of the 18A process to a more optimistic stance recently, despite the 14A process now expected to reach mass production in 2027 [2] - The Ohio One site was initially predicted to be the birthplace of the 14A process, but this timeline has shifted, with derivative products already occupying a significant portion of Intel's lineup before the site's official opening [2] Group 3 - The U.S. government allocated $8.9 billion from the CHIPS Act to Intel in exchange for a 10% equity stake, alongside a $5 billion collaboration with NVIDIA, signaling a resurgence in Intel's competitiveness, particularly in the foundry business [3] - Intel is accelerating the construction of the Ohio One facility after years of stagnation, but the timeline for its completion remains uncertain [3] Group 4 - TSMC is facing a "happy dilemma" with its 3nm process capacity fully booked until 2027, prompting significant increases in capital expenditure plans [5] - This capacity constraint is reshaping the market dynamics, leading TSMC's top clients to consider alternatives like Samsung and Intel [5] - TSMC's capital expenditure for 2026 is projected to be between $52 billion and $56 billion, exceeding previous expectations due to the overwhelming demand for advanced nodes [5] Group 5 - The supply-demand imbalance is causing market oversupply, with major clients like Apple, NVIDIA, AMD, Broadcom, Qualcomm, and MediaTek seeking alternative capacities as TSMC's advanced process node market share is expected to drop from 95% to 90% [6] - TSMC's 3nm monthly production capacity is planned to expand to 190,000 wafers by the end of 2026, but this will still fall short of client demand [6] - TSMC is adopting a more aggressive strategy by delaying new 3nm process development and encouraging clients to shift products originally slated for 2027/2028 to the 2nm GAA process [6] Group 6 - Samsung's Taylor wafer fab is seen as a more likely alternative for clients seeking supply options compared to Intel, with Qualcomm and AMD being the most likely to consider Samsung [7] - Discussions have indicated that Apple and Broadcom are evaluating Intel, but significant work remains for Intel's 14A process to be competitive [7]

Core Viewpoint - TSMC plans to build four advanced packaging (AP) factories to address capacity shortages and maintain its competitive edge in the semiconductor industry, particularly in advanced packaging technologies like CoWoS [1][4][11] Group 1: TSMC's Expansion Plans - TSMC will announce the expansion of four advanced packaging factories in Tainan, including locations in Chiayi Science Park and Southern Science Park [1] - The company aims to start mass production at its AP factory 1 in the Ziyi Technology Park in the first half of this year [1] - TSMC's expansion is a response to concerns about its potential transformation into "American TSMC" due to recent factory expansions in the U.S. [1] Group 2: Industry Trends and Challenges - The global tech industry is facing intense competition for advanced packaging technology, particularly TSMC's CoWoS, which is critical for connecting high-performance chips with ultra-fast memory [4][9] - By 2026, the bottleneck in AI GPU supply will shift from chip shortages to the complex assembly processes required for advanced packaging [4][9] - The transition from wafer-level packaging (WLP) to fan-out panel-level packaging (FOPLP) is expected to increase processing capacity significantly [11] Group 3: Strategic Implications - NVIDIA has secured nearly 60% of TSMC's CoWoS capacity for 2026, influencing competitors like AMD and Broadcom to vie for the remaining capacity [7] - The advanced packaging secondary market is rapidly maturing, with companies like Intel positioning their packaging technologies as alternatives to TSMC [8] - The industry's reliance on TSMC for advanced packaging creates vulnerabilities, as geopolitical stability in the Taiwan Strait remains a critical factor for the global AI economy [8][12] Group 4: Future Outlook - The industry's focus is shifting towards the physical realities of AI hardware, with advanced packaging becoming a crucial factor in the growth of AI capabilities [9][10] - Upcoming challenges include the transition to glass substrates for improved interconnect density and thermal management, which could disrupt TSMC's current dominance [11] - The success of HBM4 chip yields and the ramp-up of TSMC's AP7 capacity will be closely monitored, as delays could impact the release of next-generation AI models [12]

16 January 2026 Asia Quant Strategy & Asia Semis & Internet Asia Tech in 2026: Near-term momentum intact but broaden the exposure Rupal Agarwal +65 6326 7641 rupal.agarwal@bernsteinsg.com Mark Li +852 2123 2645 mark.li@bernsteinsg.com Robin Zhu +852 2123 2659 robin.zhu@bernsteinsg.com Cheng Zhang, CFA, CQF +852 2123 2636 cheng.zhang@bernsteinsg.com Edward Hou, CFA +852 2123 2623 edward.hou@bernsteinsg.com Charles Gou +852 2123 2618 charles.gou@bernsteinsg.com Min-Joo Kang +852 2123 2644 minjoo.kang@bernstei ...

本周(2026/1/12-1/18)SW电子行业指数(+3.77%)，涨跌幅排名2/31位，沪深300指数(-0.57%)。SW一级行 业指数涨跌幅前五分别为：计算机(+3.82%)，电子(+3.77%)，有色金属(+3.03%)，传媒(+2.04%)，机械 设备(+1.91%)，涨跌幅后五分别为:国防军工(-4.92%)，房地产(-3.52%)，农林牧渔(-3.27%)，煤炭 (-3.11%)，银行(-3.03%)。本周SW电子三级行业指数涨跌幅前三分别是：集成电路封测(+14.47%)，半导 体设备(+9.31%)，集成电路制造(+8.68%)，涨跌幅后三分别是：LED(-0.10%)，印制电路板(+0.22%)，分 立器件(+0.80%)。 本周SW电子行业涨跌幅排名前五的股票分别是：臻镭科技(+48.18%)，珂玛科技（301611） (+42.68%)，可川科技（603052）(+41.14%)，普冉股份(+39.75%)，和林微纳(+39.39%)。涨跌幅排名后 五的股票分别是：得润电子(-15.88%)，思泉新材（301489）(-9.74%)，安克创新（300866）(-7.16%)， 睿能科 ...

We recently published 10 Stock Winners Shocking Wall Street. CoreWeave Inc. (NASDAQ:CRWV) was one of the top performers last week. CoreWeave surged by 26.3 percent week-on-week to claw back to the $101 level—a two-month high—as investors loaded positions in stocks riding the artificial intelligence wave, buoyed by a semiconductor giant’s strong earnings performance last year and news that it would increase its capital expenditures (capex) for 2026. In its earnings call last week, semiconductor giant Tai ...

Group 1: Macroeconomic Trends - The U.S. initial jobless claims fell to 198,000, the second-lowest level in two years, indicating a strong labor market and increasing the probability of the Federal Reserve maintaining interest rates at 3.50%-3.75% on January 28 [3][4] - The strong employment data has led to a stronger U.S. dollar, while gold prices have retreated from a high of $4,630, and oil prices have dropped over 4.8% due to a combination of geopolitical easing and a strong dollar [3][4] Group 2: AI Investment Insights - TSMC announced a capital expenditure plan of $56 billion, signaling confidence in AI's integration into daily life, which has shifted market sentiment regarding AI investments [4][5] - The narrative around AI investments has evolved from speculative storytelling to a focus on actual orders and demand [4] Group 3: Sector Performance - Financial stocks and traditional sectors are experiencing a resurgence, with notable gains in hardware and infrastructure companies like Applied Materials (AMAT) and ASML, which saw stock prices rise over 5% [5][6] - Nvidia (NVDA) maintains a market capitalization of $4.5 trillion, while storage chip giant SanDisk (SNDK) has achieved a cumulative increase of 72.4% this year, outperforming the S&P 500 [5][6] Group 4: Market Dynamics - The capital markets are witnessing a revival in trading activity, as evidenced by strong earnings reports from Morgan Stanley and Goldman Sachs, driven by a surge in M&A and trading business [9] - Broader sectors such as industrials, energy, and consumer staples have outperformed the market, with gains exceeding 5.5%, and the Russell 2000 index has risen 8% year-to-date [9]

Group 1 - SK Hynix announced a record performance bonus of over 1.36 million KRW (approximately 640,000 RMB) per employee, benefiting from the AI boom, with stock prices increasing by 275% in 2025 [1] - The company has sold out all chip production capacity for 2026, indicating strong demand [1] Group 2 - Bubble Mart announced a share buyback plan, investing 251 million HKD to repurchase 1.4 million shares at prices ranging from 177.7 to 181.2 HKD per share [11] - Tencent and Taobao have invested in Zhijia Power Technology, a smart driving technology developer, indicating growing interest in AI and smart driving sectors [9] Group 3 - Tea Yan Yue Se is expanding its workforce in major cities, leading to speculation about market expansion, although the company clarified that this is part of regular personnel reserves [2][3] - The company currently operates 758 stores across four provinces and is known for its cautious expansion strategy [2] Group 4 - Vanke has been ordered to pay over 1.089 billion RMB due to enforcement actions, highlighting potential financial challenges [4] - The company is facing scrutiny as it navigates legal and financial obligations [4] Group 5 - The price of gold and silver has risen, with new investment copper bars being introduced in Shenzhen, although concerns about copper's investment viability were raised [2] - The market is reacting to rising commodity prices, which may influence consumer behavior and investment strategies [2]

Group 1 - SK Hynix announced a record performance bonus of over 136 million KRW (approximately 640,000 RMB) per employee, the highest in the company's history [3][4] - The company offers an option for employees to receive up to 50% of their year-end bonus in company stock, which can yield an additional cash reward of 15% after holding the stock for one year [3][4] - SK Hynix's stock price surged by 275% in 2025, driven by the AI boom, and the company reported that its entire chip production capacity for 2026 is already sold out [4] Group 2 - The performance bonus distribution is part of SK Hynix's strategy to enhance employee engagement and align their interests with shareholders [3] - The stock option plan is designed to incentivize long-term commitment from employees, potentially increasing their investment in the company's future [3][4] - The strong demand for SK Hynix's products reflects the ongoing growth in the semiconductor industry, particularly in memory chips, fueled by advancements in AI technology [4]