Investment Rating - The report provides an "In-Line" investment rating for the automotive sensing equipment market, indicating a balanced outlook for the sector [9]. Core Insights - The automotive CMOS image sensor (CIS) market is experiencing a significant growth phase driven by advancements in automotive electronic control unit (ECU) integration and the increasing demand for high-resolution CMOS image sensors, particularly for advanced driver assistance systems (ADAS) [2][3][14]. - The report forecasts a compound annual growth rate (CAGR) of 21% for the high-resolution image sensor market (over 5MP) from 2025 to 2030, compared to a 5% CAGR for the overall automotive image sensor market [3][16]. - Major players in the high-res CIS market include Sony Group, Samsung Electronics, and Will Semiconductor, with Will Semiconductor expected to expand its market share significantly by 2025 [5][30]. Summary by Sections I. Summary and Investment Conclusions - The automotive imaging sensor market is at an inflection point, with a forecasted increase in camera module content per vehicle from 3.8 units in 2024 to over 10 units by 2030, driven by the integration of high-resolution CMOS sensors in ADAS [15][56]. II. Automotive Sensing Equipment Market - The demand for automotive sensing equipment is steadily growing, with a focus on enhancing ADAS performance through improved sensor integration and technology [42][48]. III. Tech Trend in ADAS Camera - The report highlights the transition to integrated ECUs using system-on-chip (SoC) technology, which is expected to reduce costs and increase the number of sensing modules installed per vehicle [61][65]. IV. Road to Humanoids - The sensing technologies developed for ADAS are anticipated to form the foundation for future humanoid applications, with CMOS image sensors playing a crucial role in visual information acquisition [6][40]. V. Automotive CMOS Image Sensor Market - The report projects that high-resolution CIS will account for over 30% of total automotive CIS shipments by FY28, significantly impacting industry revenue [16][25]. VI. Main CIS Makers - Key players in the automotive CIS market include Sony, onsemi, Will Semiconductor, and Samsung Electronics, with varying strategies and market positions influencing their growth potential [30][35][36]. VII. CIS Process Technology and Capacity - The report discusses the technological barriers in high-res CIS production, which limit the number of suppliers and highlight the competitive landscape among existing manufacturers [4][23].

Investment Rating - The report indicates a strong performance in the Asia EM equity strategy, particularly highlighting Japan's earnings as a standout with a net beat ratio of +25 percentage points [2][7]. Core Insights - The earnings results for 1Q25 showed a strong performance across the Asia EM region, with Japan leading at +23.3%, followed by Korea (+20.3%), Singapore (+11.9%), and Thailand (+10.5%) [2][3][26]. - Emerging Markets (EM) overall reported a moderate earnings beat of +4.7%, while Asia Pacific ex-Japan (APxJ) saw a slightly higher beat of +6.0% [2][12]. - The report notes that the strong earnings in Japan are attributed to corporate and consumer activities that were brought forward ahead of tariff announcements in early April [1]. Summary by Region - Japan reported a remarkable earnings surprise of +23.3% with a net beat ratio of 25%, marking the second consecutive quarter of strong performance [7][26]. - Korea and Singapore also performed well, with earnings surprises of +20.3% and +11.9% respectively, while Thailand reported +10.5% [3][26]. - In contrast, Brazil experienced significant misses with an earnings surprise of -7.8%, and Turkey reported a substantial decline of -29.1% [3][26]. Summary by Sector - Major sectors showing strong earnings beats include Industrials (+16.6%), Communication Services (+11.6%), and Health Care (+10.3%) [4][32]. - Consumer Staples and Materials sectors reported slight misses, with Consumer Staples at -1.6% and Materials at -1.1% [4][32]. - The Capital Goods and Telecom Services industries were particularly strong, with earnings surprises of +24.4% and +21.5% respectively [4][32]. Stock-Level Surprises - The report highlights key stock-level surprises, focusing on companies rated Overweight (OW) that are expected to see increases in 12-month consensus estimates following strong earnings beats [5]. - Conversely, Underweight (UW) rated companies are anticipated to experience downgrades due to earnings misses [5]. Revenue Surprises - Revenue results across the region showed slight beats, with EM at +1.3%, APxJ at +1.1%, and Japan slightly missing at -0.1% [2][3]. - The report emphasizes that revenue surprises were generally positive, contributing to the overall strong earnings performance in the region [2][3].

Asia Memory Equities Memory prices continue to hover higher Korea Soaring memory prices: We reiterate our positive view on the memory sector. Previously, we highlighted a faster memory turnaround from April (see: Asia Memory report, 10 March). We now see that memory prices are hovering higher throughout 2Q, with a higher level of blended ASPs of +3-8% q-o-q due to 1) earlier phase-out of DDR4 products leading to aggressive purchases on the fear of shortages while solid demand for DDR4 is supported by the le ...

Core Viewpoint - Semiconductor stocks experienced a decline due to potential U.S. measures that may end waivers allowing certain chipmakers to transfer American technology to China [1][2]. Group 1: Industry Impact - The U.S. Commerce Department is considering canceling waivers for companies like Samsung Electronics, SK Hynix, and Taiwan Semiconductor, which permit the transfer of U.S. chipmaking technology to their factories in China [2]. - Following the news, the VanEck Semiconductor ETF fell approximately 1%, indicating a negative market reaction [2]. Group 2: Company Performance - Major semiconductor companies such as Nvidia, Qualcomm, and Marvell Technology saw their stock prices decrease by about 1% [2]. - Taiwan Semiconductor's stock declined by around 2%, reflecting the broader trend in the semiconductor sector [2].

Investment Rating - The investment rating for the Semiconductor Production Equipment industry is Attractive [1]. Core Insights - The semiconductor production equipment industry is experiencing a shift in the silicon cycle, driven by advancements in generative AI and significant capital expenditures from major tech companies [4][5]. - Companies like Microsoft and Google are making substantial investments in AI, which is expected to boost demand for semiconductor production equipment, particularly for high-bandwidth memory (HBM) and advanced packaging technologies [5]. - The report highlights the increasing need for GPUs in AI servers, which in turn drives demand for HBM and advanced packaging solutions [5]. Industry Drivers and Equipment Impact - The report identifies key investment themes such as EUV (Extreme Ultraviolet Lithography), GAA (Gate-All-Around), and advanced packaging technologies that are expected to drive growth in the semiconductor production equipment sector [13]. - Specific equipment types are categorized based on their relevance to these investment themes, indicating a positive outlook for steppers and coater/developers in the context of generative AI and HBM [13]. Market Size and Share - The report provides detailed market size and share data for various segments within the semiconductor production equipment industry, including lithography, etching systems, and cleaning equipment, with notable market leaders identified [72][78][80][83]. - For instance, ASML holds a dominant market share of 94% in the lithography equipment segment, while Tokyo Electron leads in coater/developer equipment with a 93% market share [72][78]. Future Outlook - The report anticipates a ramp-up in capital expenditures directed at HBM4 starting from the second half of 2025, indicating a bullish outlook for the semiconductor production equipment market [5]. - The introduction of new technologies such as glass substrates and photoelectric fusion is also expected to enhance the capabilities and efficiency of semiconductor production processes [5].

Investment Rating - The report reiterates a Buy rating on SK Hynix and Samsung Electronics due to expected demand growth in the DRAM market driven by GDDR7 and LPDDR5X [1][6]. Core Insights - The global memory supply shortage is anticipated to intensify in the second half of 2025, primarily due to rising demand for GDDR7 driven by advancements in AI inference models and edge AI devices [1][5]. - GDDR7 is expected to significantly enhance performance with a 2x increase in data rates, reaching 4.8Gbps per pin, and doubling bandwidth capacity to 192GB/s per device [2]. - The demand for GDDR7 is projected to contribute an additional 4.03 billion Gb to global DRAM demand in 2H25, representing a 24% increase in graphic DRAM demand and a 2.4% increase in overall global DRAM demand [4][7]. Summary by Sections GDDR7 Technology - GDDR7 features advanced PAM3 technology, improving data density by 50% per clock cycle compared to GDDR6, while operating at a lower voltage of 1.1-1.2V [2]. - The architecture of GDDR7 utilizes four 8-bit channels, enhancing parallel processing capabilities and reducing latency for AI workloads [2]. AI Inference Demand - The emergence of AI distillation technology is expected to drive significant memory demand for AI inference, leading to increased adoption of GDDR7 as an alternative to HBM [3]. Market Projections - The report projects GPU demand from DeepSeek to reach 2 million units in 2H25, with each GPU requiring 96GB of DRAM, contributing to the overall demand increase [4]. - The anticipated DRAM content upgrade in Apple's iPhone 17 series is expected to add an additional 3.2% to global DRAM demand in 2H25 [4].

Investment Rating - The report provides a cautious outlook on the technology sector in Asia Pacific, particularly focusing on the developments surrounding DeepSeek's R2 model [7]. Core Insights - DeepSeek's R2 model is anticipated to redefine AI development, pricing, and reliance on domestic AI chip supply chains in China, serving as a potential catalyst for accelerating AI application deployment [1][2]. - The R2 model is expected to achieve significant advancements in multilingual reasoning and code generation, offering a hybrid model with lower power consumption and smaller parameter scale, while being cost-effective compared to its predecessor R1 [2][9]. - The model's efficiency is projected to lower computational requirements, facilitating AI commercialization and expanding total demand, potentially disrupting the AI market [2][10]. Summary by Sections R2 Model Overview - R2 represents the second major iteration of DeepSeek's reasoning model, promising improvements in multilingual reasoning and code generation, with a focus on efficiency and cost reduction [2][9]. - The model is designed to be multimodal, featuring enhanced visual capabilities and a significant reduction in operational costs compared to R1 [2][13]. Supply Chain Developments - The R2 model is supported by a robust ecosystem of Chinese companies, leveraging Huawei's Ascend 910B chip cluster for training, which signifies a shift towards a localized supply chain [3][17]. - DeepSeek aims to reduce dependency on external chip manufacturers, contrasting with the previous reliance on NVIDIA GPUs for training the R1 model [17][20]. Market Impact - The report suggests that DeepSeek's advancements will benefit local GPU, GDDR, and China's HBM sectors, indicating a positive outlook for these industries amidst a broader AI market recovery [20][22]. - The performance of DeepSeek's models, particularly in the context of increasing computational demands during inference, is expected to drive further innovation and resource allocation within the AI ecosystem [20][23]. Competitive Landscape - DeepSeek's approach emphasizes software-driven resource optimization rather than hardware dependency, which could lead to significant cost reductions and efficient training of large models [23][24]. - The report highlights the competitive pressure on NVIDIA from Huawei's Ascend chips, which are designed to match NVIDIA's performance while being domestically produced [17][20].

2025 Semiconductor Outlook Tech (Overweight) Jongwook Lee jwstar.lee@samsung.com Tech Team | Jan, 2025 ※ All material presented in this report, unless specifically indicated otherwise, is under copyright to Samsung Securities. None of the material, nor its content, nor any copy of it, may be altered in any form or by any means, transmitted, copied, or distributed to any other party, without the prior express written permission of Samsung Securities. This memorandum is based upon information available to the ...

Group 1 - Apple Inc's iPhone sales in China topped the charts in May, indicating a rebound in growth in its key markets, China and the U.S. [1] - Global sales for Apple increased by 15% during April and May, marking the highest growth since the pandemic began in 2020 [1]. - Discounts of up to 2,530 yuan ($351) were offered on Apple's latest iPhone 16 models in May through Chinese e-commerce platforms [1]. Group 2 - The rebound in iPhone sales was partly driven by tariff evaders and double-digit growth in Japan, India, and the Middle Eastern markets [2]. - The U.S. and Chinese markets are crucial for the iPhone's future prospects, as highlighted by Ivan Lam of Counterpoint [2]. Group 3 - Counterpoint Research revised its growth expectations for global smartphone shipments in 2025 down to 1.9% from 4.2%, citing uncertainties related to tariffs [3]. - Shipment growth from China is expected to be nearly flat, with Apple and Samsung's shipments anticipated to slow due to increased consumer costs [3]. - IDC also lowered its 2025 global smartphone shipment growth outlook to 0.6% from 2.3% [3]. Group 4 - IDC forecasts a 3% growth in smartphone shipments in China for 2025, driven by government subsidies, while Apple is expected to decline by 1.9% due to competition from Huawei and economic slowdown [4]. - U.S. smartphone shipment growth is projected to slow to 1.9% in 2025, down from 3.3% in 2017, primarily due to tariff-related price increases [4]. - As of the last check, Apple stock was down 0.82% to $197.57 [4].

Core Insights - Verizon Communications, Inc. is experiencing significant growth in 5G adoption and fixed wireless broadband, with 2.4 million wireless retail postpaid gross ads and 3.6 million wireless postpaid upgrades in Q1 2025 [1] - The company has a total of 2,035 MHz of spectrum, particularly benefiting from the C-band spectrum, which enhances coverage and speeds for 5G networks [2] - Strategic partnerships with companies like Ericsson, Qualcomm, Samsung, and MediaTek are enhancing Verizon's 5G capabilities, achieving uplink speeds of 480 Mbps and download speeds of 5.5 Gbps [3] Competitive Landscape - Verizon faces competition from T-Mobile and AT&T in the wireless industry [4] - T-Mobile's 5G network covers 98% of the U.S. population, utilizing mid-band 2.5 GHz spectrum for extensive coverage and fast speeds [5] - AT&T's 5G network currently covers 295 million people, employing millimeter wave spectrum in dense areas and mid/low-band spectrum in suburban and rural regions [6] Financial Performance and Valuation - Verizon's stock has gained 8.8% over the past year, while the Wireless National industry has grown by 28.3% [7] - The company is advancing its 5G footprint through spectrum depth and collaborations, but its earnings outlook has softened, with valuation below sector averages [8] - Verizon's shares currently trade at a price/earnings ratio of 9.05, lower than the industry average of 13.34 but above its historical mean of 8.95 [9] - Earnings estimates for 2025 have declined by 0.21% to $4.69, while estimates for 2026 remain unchanged at $4.86 [10]