Investment Rating - Industry Rating: Outperform the Market (maintained rating) [8] Core Insights - The semiconductor industry continues to show optimistic growth trends driven by AI and high-performance computing, with strong demand for HBM, AI chips, and edge AI hardware [2][19] - The storage market is expected to see sustained price increases in the second half of the year, with strong demand for HBM and DDR5, while DDR4 supply remains tight [2][19] - Foundry services are optimistic, with expectations of price increases and capacity expansion, particularly for companies like Huahong and SMIC [2][19] Summary by Sections 1. Overseas Leaders and Domestic Foundry Performance - AI and high-performance computing remain core growth drivers, with strong demand for HBM and AI chips [2] - NAND Flash market is expected to see price increases due to production cuts and strong AI demand [2][19] - Foundry sector shows optimism with price increases and capacity expansion, particularly for Huahong and SMIC [2][19] 2. Wafer Manufacturing - SMIC's Q2 capacity utilization was 92.5%, with a revenue of $2.209 billion, expected to grow by 5%-7% in Q3 [3][20] - Huahong's Q2 revenue was $566.1 million, with a capacity utilization of 108.3% and a strong demand for power devices [3][20] - TSMC's revenue in July reached NT$323.166 billion, with strong AI chip demand and advanced process capacity remaining tight [3][20] 3. IDM and Advanced Logic Chips - Intel's Q2 revenue was $12.9 billion, with a net loss of $2.92 billion, while Qualcomm's Q3 net profit was $2.666 billion, driven by automotive and IoT business [4][30] - AMD's Q2 net profit surged to $872 million, with strong client segment performance, while MediaTek's Q2 revenue was NT$150.336 billion [4][30] 4. Storage Chips - Samsung's Q2 storage revenue was 21.2 trillion KRW, with HBM3E sales increasing to over 80% of total HBM sales [5][50] - SK Hynix's Q2 revenue was 22.232 trillion KRW, with a net profit of 6.996 trillion KRW, driven by strong NAND and DRAM demand [5][56] 5. Analog Chips - Texas Instruments reported Q2 revenue of $4.45 billion, with a net profit of $1.3 billion, driven by stable industrial and automotive demand [5][18] 6. IP Licensing and Design Services - Arm's FY2026 Q1 revenue was $1.053 billion, driven by demand from AI and data centers [5][18] 7. Overall Industry Outlook - The global semiconductor market is expected to maintain optimistic growth in 2025, driven by AI and domestic substitution efforts [6][19] - The storage sector is projected to see significant price increases in Q3 2025, with strong quarterly performance from leading companies [6][19]