Summary of Conference Call on Greater China Semiconductors Industry Overview - The semiconductor industry, particularly memory segments (DRAM, NAND, NOR Flash), is experiencing an unprecedented supercycle driven by AI demand [1][2][3] - Chinese memory players are aggressively expanding capacity to meet rising demand [1][2] Key Points on DRAM - **DDR4 Shortage**: Expected to continue until at least Q4 2026, with a projected 10-15% undersupply over the next three quarters [2][10][12] - **Price Increases**: Nanya Tech reported a preliminary revenue increase of 79% Q/Q, with average selling prices (ASPs) expected to rise at least 20% Q/Q as market dynamics favor sellers [2][11] - **Market Dynamics**: Mainstream memory vendors have ceased providing pricing quotes to enterprise customers, indicating potential for further price increases [2] Key Points on NAND - **Divergent Demand**: NAND demand is increasing significantly in AI applications, with CSPs doubling their NL eSSD orders for 2026 [3][48] - **Projected Shortages**: Anticipated 2% NAND shortage in 2026, with a bull case projecting shortages widening to 8% by year-end [3][48] - **Price Expectations**: NAND pricing is expected to rise by at least mid-teens percentage in 2026, benefiting companies like Phison [3][48] Key Points on NOR Flash - **Pricing Support**: NOR pricing is expected to remain strong due to capped supply growth and potential demand from IoT applications [4] - **Market Share**: AirPods could account for 5-10% of global NOR demand by 2026, indicating sustained price hikes [4] Company-Specific Insights - **Price Target Adjustments**: Price targets raised for Nanya Tech (from NT$90 to NT$110), Phison (from NT$800 to NT$1,000), and Silicon Motion (from US$88 to US$100) [7] - **Investment Recommendations**: Companies like Nanya Tech, Winbond, and GigaDevice are favored due to expected price hikes in DRAM [5][16] - **Long-term Outlook**: Phison's earnings estimates revised upwards by 3% for 2026 and 6% for 2027, reflecting strong NAND pricing trends [68] Additional Insights - **Localization Trends**: Ongoing localization of wafer fab equipment in China is expected to strengthen the domestic semiconductor industry [59][61] - **Capacity Expansion**: CXMT and YMTC are set to expand their capacities significantly, with CXMT potentially exceeding 300k wpm by 2026 [61][62] - **Market Sentiment**: The overall sentiment in the semiconductor industry remains attractive, with strong growth prospects driven by AI and memory demand [7][59] This summary encapsulates the key insights from the conference call regarding the semiconductor industry, particularly focusing on memory segments and specific companies within the Greater China region.

Summary of Conference Call on Greater China Semiconductors Industry Overview - The semiconductor industry, particularly memory segments (DRAM, NAND, NOR Flash), is experiencing an unprecedented supercycle driven by AI demand [1][2][3] - Chinese memory players are aggressively expanding capacity to meet rising demand [1][2] Key Points on DRAM - **DDR4 Shortage**: Expected to continue until at least Q4 2026, with a projected 10-15% undersupply over the next three quarters, potentially worsened by back-end constraints [2][10][12] - **Price Increases**: Nanya Tech reported a preliminary revenue increase of 79% Q/Q, with average selling prices (ASPs) expected to rise at least 20% Q/Q as market dynamics favor sellers [2][11] - **Long-term Outlook**: Mainstream DRAM players are likely to focus on DDR5 and HBM, providing minimal support for DDR4, which is expected to see a significant decline in demand [14][15] Key Points on NAND - **Demand Divergence**: NAND demand is increasing significantly in AI applications, with CSPs doubling their NL eSSD orders for 2026 [3][48] - **Projected Shortages**: Anticipated 2% NAND shortage in 2026, with a bull case projecting up to an 8% shortage by year-end [3][48] - **Price Expectations**: NAND pricing is expected to rise by at least mid-teens percentage in 2026, benefiting companies like Phison [3][48] Key Points on NOR Flash - **Pricing Support**: NOR pricing is expected to remain well-supported due to capped supply growth and potential demand from IoT applications [4] - **Market Dynamics**: AirPods could account for 5-10% of global NOR demand by 2026, indicating sustained price hikes into 2026 [4] Company-Specific Insights - **Price Target Adjustments**: Price targets raised for Nanya Tech (from NT$90 to NT$110), Phison (from NT$800 to NT$1,000), and Silicon Motion (from US$88 to US$100) [7] - **Investment Recommendations**: Companies like Nanya Tech, Winbond, and GigaDevice are favored due to their positioning in the memory upcycle [5][16] - **Earnings Forecasts**: Phison's EPS forecasts have been revised upward by 3% for 2026 and 6% for 2027, reflecting strong NAND pricing trends [68] Additional Insights - **Localization Trends**: Ongoing localization of wafer fab equipment in China is expected to strengthen the domestic semiconductor industry [59][60] - **Capacity Expansion**: CXMT and YMTC are set to expand their capacities significantly, with CXMT potentially exceeding 300k wpm in the long term [61][62] Conclusion - The semiconductor industry, particularly in memory segments, is poised for significant growth driven by AI demand and capacity expansions from Chinese players. Companies like Nanya Tech, Phison, and SIMO are well-positioned to benefit from these trends, with favorable pricing dynamics expected to continue into 2026 and beyond.

国盛证券研报指出，香农芯创为半导体分销领军企业，"分销+产品"双轮驱动公司成长。分销：在2021 年完成对联合创泰的收购切入半导体分销领域并于同年正式更名为香农芯创，拥有SK海力士、联发科 及AMD（24年5月获得经销商资格）等全球龙头半导体厂商代理权，以及国产芯片头部厂商 GigaDevice、大唐存储、寒武纪等品牌代理资格。公司在2024年全球半导体元器件分销商中排名第14， 中国大陆分销商中排名第3；2）产品：2023年，公司与SK海力士及大普微电子等合作方联合设立控股 子公司深圳海普存储，进军企业级SSD领域，三者在2024年共同设立子公司无锡海普存储，填补企业级 DRAM空白。看好公司电子元器件业务起量及AI驱动下存储产品需求提升带来的营收业绩增长机遇， 公司相较于可比公司具备估值优势，首次覆盖，给予"买入"评级。 ...

Investment Rating - The report assigns an "In-Line" investment rating for the Greater China Tech Semiconductors industry [5]. Core Insights - The report emphasizes a positive outlook for auto semiconductor localization in China, driven by the dominance of Chinese EVs in the global market, government support, and sufficient mature node foundry supply [1][19]. - Three key investment themes are identified within the China auto semiconductor supply chain, focusing on power semiconductors, autonomous driving chips, and microcontroller units (MCUs) [20][21]. Summary by Sections Investment Themes - The report identifies three main investment themes in the China auto semiconductor supply chain: 1. **Power Semiconductors**: Companies like Yangjie Technology and Starpower are highlighted for their strong positions in the market, with Yangjie showing a stable net margin of approximately 18% over the last three years [2][20]. 2. **Autonomous Driving Chips**: Companies such as Horizon Robotics and Alchip are noted for their roles in the growing ADAS market, with increasing adoption in more affordable EVs [21][23]. 3. **Microcontroller Units (MCUs)**: GigaDevice is recognized for its potential to benefit from localization trends, despite the current low self-sufficiency ratio of 3% in auto MCUs [21][40]. Market Dynamics - The report discusses the competitive landscape, noting that global auto semiconductor vendors from Europe, Japan, and the US dominate the market, with Greater China's share accounting for less than 5% [8][22]. - The growth of the electric vehicle (EV) market in China is highlighted, with expectations for EV production to nearly triple by 2030, leading to increased semiconductor content per vehicle [22][36]. Self-Sufficiency and Growth Potential - The report projects that China's auto semiconductor self-sufficiency will reach 28% by 2027, with significant growth opportunities in power discretes and MCUs due to their current low self-sufficiency ratios [10][46]. - The report indicates that local power semiconductor companies are willing to sacrifice margins for market share, which may lead to increased competitiveness against global players [26]. Export Opportunities - The potential for direct exports of auto semiconductors from China is deemed low, with the focus instead on leveraging EV exports, which are expected to grow by 31% in 2025 [4][19]. Stock Recommendations - The report provides a list of recommended stocks, with Yangjie Technology and OmniVision favored for their growth prospects in the auto segment, while Horizon Robotics faces challenges due to heavy R&D investments [2][18].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies [1]. Core Insights - The report highlights a tentative US-China détente following a call between Trump and Xi, with discussions on trade and potential sanctions [1]. - The HSCEI index increased by 2.5% and the CSI 300 by 0.9% during the week [1]. - China is considering a RMB500 billion investment to accelerate infrastructure projects in AI, digital economy, and consumption [1]. - The report notes that the IT, Communication Services, and Broadline Retail sectors outperformed, while Industrials, Consumer Staples, and Energy sectors underperformed [1]. Key Themes Update - The report identifies key themes in the China market, focusing on index-heavy stocks with high dividend yields and local champions expanding globally [12]. - High yield stocks listed include CCB, ICBC, and PetroChina, with dividend yields ranging from 5.1% to 7.1% [12]. - Local champions going global include companies like BYD and Great Wall Motor, which are less impacted by US/EU tariffs [12]. Market Movements and Capital Flows - The report indicates that the A-share market saw a 22.9% year-over-year increase in new account openings in May [3]. - Preliminary data shows that May passenger vehicle wholesales increased by 14% year-over-year, with NEV sales up by 38% [3]. Earnings Revisions - The report does not provide specific details on earnings revisions for the industry or companies [1]. Recovery Trends - The report notes that the top 100 developers' home sales decreased by 8.6% year-over-year in May [3]. - Average new home prices in 100 cities increased by 0.3% month-over-month in May, while secondary home prices decreased by 0.7% [3]. Key Events - The report mentions that the US made tough requests to Vietnam in trade talks, including reducing reliance on Chinese industrial goods [2]. - The PBOC is set to inject RMB1 trillion via outright reverse repos in June [2]. Key News - The report highlights that the EU voted to limit China's access to its medical device procurement [1]. - China is reportedly considering a major deal to order hundreds of Airbus jets during EU leaders' visit [1].

Investment Rating - The report maintains a bullish outlook on stocks related to Reliability of Power/Water/Energy, Efficiency of Energy/Resources/Land, and solutions for Aging Populations/labor strains [1][15][38] Core Insights - Sustainable funds with broader APAC regional mandates have outperformed non-ESG peers for six consecutive quarters, while those with individual country mandates have struggled [1][35] - Performance is deemed more critical than policy for the growth of Sustainable Investing's AUM penetration, with a focus on quality and governance [1][13] - The report highlights a notable increase in AUM penetration for ANZ-focused Sustainable funds, reaching 4.8% by 1Q25, up 23 basis points year-over-year [12] APAC Fund Performance and Flows - APAC-focused Sustainable equity AUM remained flat at US$212 billion, with minor outflows of -US$0.9 billion in 1Q25, primarily from Japan and Emerging Markets-focused funds [9][19] - Passive Sustainable strategies now represent 52% of total APAC-focused Sustainable AUM, attracting US$1.0 billion of inflows in 1Q25 [9][19] - Sustainable funds in the top two quintiles based on 3-year risk-adjusted returns saw cumulative inflows of +US$6.0 billion in 2024, contrasting with -US$16 billion outflows in the bottom cohort [10][12] Stock Ideas - New entrants into the E&S Leaders screen include companies like JYP Entertainment, Kweichow Moutai, and Tata Consultancy, all rated as Buy by Goldman Sachs [6][7] - Thematic stock in focus includes Harmonic Drive Systems, which aligns with Green Capex and Aging Populations Solutions themes [6] Sustainable Fund Trends - The report notes that the median performance of APAC-focused Sustainable funds was at the 45th percentile in 1Q25, indicating underperformance relative to peers [35][42] - Greater China-focused Sustainable funds have shown significant impact on median performance, comprising approximately 50% of the funds tracked [36][44] - The report emphasizes a less-is-more approach to Sustainable integration strategies, focusing on measurable metrics [38]