SMIC(SH:688981) GOLDEN SUN SECURITIES·2025-11-16 06:42Investment Rating - The report maintains a "Buy" rating for the industry [6] Core Insights - The semiconductor industry is experiencing strong demand driven by AI computing power, leading to a supply-demand imbalance and price increases in storage components [2][30] - SMIC's revenue is expected to exceed $9 billion for the first time, with Q3 2025 revenue reaching $2.38 billion, a year-on-year increase of 9.7% [11][30] - The storage market is facing a short-term supply gap, with NAND flash prices increasing by up to 50% due to manufacturers' price hikes and supply control strategies [2][32] Summary by Sections SMIC Performance - SMIC's Q3 2025 revenue reached $2.38 billion, with a gross profit of $522.81 million and a gross margin of 22.0%, reflecting continuous improvement in profitability [11][12] - The company's monthly production capacity increased from 991,300 wafers in Q2 to 1,022,800 wafers in Q3, with a capacity utilization rate of 95.8% [11][12] - The company expects Q4 2025 revenue to remain flat or grow by 2%, with a gross margin guidance of 18%-20% [30][31] Storage Market Dynamics - The storage market is experiencing widespread price increases, with NAND flash prices rising significantly due to supply constraints and manufacturers' price adjustments [2][32] - Major manufacturers like SanDisk and SK Hynix are implementing supply control strategies, leading to a forecasted price increase of 20%-30% [2][32] - The SSD market is also seeing price increases, with high-capacity products experiencing notable price hikes [38][40] Hon Hai Precision Industry - Hon Hai's Q3 2025 revenue reached NT$2.06 trillion, with a net profit of NT$57.67 billion, benefiting from strong AI computing demand [3] - The company anticipates a high double-digit growth in AI cabinet shipments for Q4 2025, driven by robust demand from major cloud service providers [3] Key Investment Targets - The report highlights several stocks with a "Buy" rating, including SMIC, with projected earnings per share (EPS) growth from 0.51 in 2024 to 0.67 in 2025 [8]