TSMC(US:TSM) Shenwan Hongyuan Securities·2025-08-16 15:17Investment Rating - The report maintains a positive outlook on the electronic sector in Taiwan, particularly driven by the AI industry and its expansion [2][3]. Core Insights - The AI sector continues to show strong growth, with TSMC's revenue in July 2025 increasing by 25.8% year-on-year, indicating stable revenue growth and diminishing foreign exchange losses [6]. - The report highlights a divergence in the mature process segment, with companies like UMC, World Advanced, and PSMC showing varied revenue growth, emphasizing the importance of capacity expansion and transformation strategies [16]. - The storage market is experiencing a recovery driven by tight supply and demand for DDR4, with Nanya Technology reporting a 95% year-on-year revenue increase in July 2025 [16]. - Demand for end-side chips is mixed, with MediaTek's revenue declining by 5% year-on-year, while PC semiconductor companies like Silex and Synnex show varied performance [17]. - AI-related demand is a key support for passive components, with Yageo reporting a slight decline of 3% year-on-year in July 2025, while Walsin Technology shows a marginal increase of 0.1% [17]. Summary by Sections AI Sector - TSMC's revenue for July 2025 reached NT$3,231.7 billion, with a year-on-year growth of 25.8%, indicating a stable revenue trend [6]. - The demand for AI servers continues to drive growth in the EMS sector, with companies like Wistron and Wiwynn reporting significant revenue increases of 122.4% and 171.6% respectively [13]. Mature Process - UMC, World Advanced, and PSMC reported revenue changes of -4%, 2%, and 3% respectively in July 2025, highlighting the need for strategic adjustments in production [16]. Storage - Nanya Technology's revenue surged by 95% year-on-year, while Winbond and Macronix reported changes of -3% and 14% respectively, reflecting a mixed recovery in the storage market [16]. End-Side Chips - MediaTek's revenue fell by 5% year-on-year, while Silex and Synnex reported varied performances, indicating a seasonal decline in mobile chip demand [17]. Passive Components - Yageo's revenue decreased by 3% year-on-year, while Walsin Technology's revenue remained stable with a slight increase of 0.1%, showing resilience in AI-related applications [17].