Group 1 - The Shenzhen Component Index has surpassed the 12,100-point mark, increasing by 1.51% [1] - Sectors such as AI chips, Chiplet concepts, and high-bandwidth memory have shown significant gains [1]

Core Viewpoint - The Shanghai Composite Index has surpassed the 3,800-point mark, increasing by 0.77%, with notable gains in sectors such as AI chips, Chiplet concepts, and high-bandwidth memory [3]. Group 1 - The Shanghai Composite Index reached a significant milestone by breaking through the 3,800-point threshold [3]. - The index experienced a rise of 0.77%, indicating positive market sentiment [3]. - Key sectors that showed strong performance include AI chips, Chiplet concepts, and high-bandwidth memory, suggesting a growing interest and investment in these technologies [3].

Core Insights - HBM has evolved from a niche product to a core component of the AI revolution, effectively breaking through traditional memory bottlenecks and significantly enhancing bandwidth and data transfer efficiency [1][2] - The competitive landscape of the HBM market is dominated by SK Hynix and Samsung, which together hold over 90% market share, while Micron is positioned as a follower [1][2] - The race for the next generation of HBM, specifically HBM4, is intensifying among these major players, with each company showcasing their advancements at the Flash Memory Summit [1][2] HBM Market Dynamics - SK Hynix emphasizes the balance between performance and efficiency in HBM, positioning it as "near-memory" technology that offers higher bandwidth and faster response times compared to traditional DRAM [2] - The transition from HBM3E to HBM4 represents a significant leap, with bandwidth increasing by 200%, showcasing HBM4's potential for high-performance applications [2][3] - Samsung's HBM roadmap indicates a steady increase in bandwidth from HBM2 (307 GB/s) to HBM4 (projected 2.048 TB/s by 2026), highlighting the ongoing advancements in memory technology [4][6] Technological Advancements - HBM4 features a maximum capacity of 36GB and bandwidth exceeding 2TB/s, with a 60% overall improvement in performance metrics compared to previous generations [3][4] - Samsung's innovative packaging technology, HCB, allows for increased stacking layers and improved thermal management, which is crucial for high-performance applications [7][8] - Micron is also making strides in HBM technology, planning to launch HBM4 with a focus on higher bandwidth and energy efficiency, despite entering the market later than its competitors [8][9] Market Growth Projections - The global HBM market is expected to grow from $17 billion in 2024 to $98 billion by 2030, with a compound annual growth rate (CAGR) of 33% [16][17] - HBM's revenue share in the DRAM market is projected to increase from 18% in 2024 to 50% by 2030, indicating its rising importance and value [16][17] - Despite the anticipated growth, the market may face cyclical adjustments, with potential oversupply issues as major suppliers ramp up production [18][20] Manufacturing Complexity - The manufacturing process for HBM is intricate, involving multiple steps that require advancements in both front-end and back-end processes to enhance bandwidth and die density [10][11] - Different companies employ various stacking technologies, with SK Hynix utilizing MR-MUF and Samsung and Micron primarily using TC-NCF [10][11] - Future HBM generations may adopt new bonding technologies, with a shift towards customized HBM architectures to improve system performance and reduce total cost of ownership [12][13]

Core Viewpoint - Zhejiang Liqi Storage Technology Co., Ltd. (Liqi Storage) has submitted its listing application to the Hong Kong Stock Exchange, with CITIC Securities as the sole sponsor [1]. Company Overview - Liqi Storage is a leading memory chip design company and AI computing solution provider in China, with projected sales of over 100 million memory chips and revenue of 646 million RMB in 2024 [4]. - The company has experienced significant growth in product sales, with total storage capacity sold increasing from approximately 13.8 million GB in 2022 to about 34.2 million GB in 2024, representing a compound annual growth rate (CAGR) of 57.4% [4]. Market Position - According to Frost & Sullivan, Liqi Storage ranks fourth among domestic companies in the global niche DRAM market based on revenue in 2024 [4]. - The company is recognized as a pioneer in the AI computing industry in China, possessing core technology in WoW3D heterogeneous integration and striving to be one of the first domestic companies to achieve mass production of high-bandwidth memory products [4]. Product Strategy - Liqi Storage focuses on developing high-bandwidth, low-power, and highly reliable storage solutions, offering a comprehensive range of DRAM memory types for various applications, including consumer electronics, network communications, automotive electronics, energy, and industrial control systems [5]. - The company has established long-term partnerships with global foundries and two of the top ten memory module manufacturers, ensuring a stable supply chain [5]. Financial Performance - For the fiscal years 2022, 2023, and 2024, Liqi Storage reported revenues of approximately 610 million RMB, 580 million RMB, and 646 million RMB, respectively, with net losses of about 139 million RMB, 244 million RMB, and 109 million RMB during the same periods [6][8].

Group 1 - AI technology is driving transformation across industries, with AI computing infrastructure evolving from single GPU clusters to integrated AI factories [1][2] - Single GPU clusters have been essential for AI model training but are increasingly inadequate for complex applications, leading to the emergence of comprehensive AI factories that integrate computing, storage, networking, and cooling systems [1] - Integrated AI factories enhance development efficiency and operational performance for various AI tasks through dynamic resource allocation and advanced data management [1] Group 2 - The demand for distributed computing is growing exponentially as AI enters the inference paradigm and multi-agent systems, necessitating innovations in liquid cooling, high-bandwidth memory, and dedicated interconnect networks [2] - The strategic significance of AI infrastructure has transcended technical aspects, becoming crucial for national competitiveness and data sovereignty in the digital age [2] - Countries and large enterprises are actively establishing AI sovereignty capabilities and deploying local AI factories tailored to their unique advantages and needs, such as Indonesia and India focusing on cultural adaptation and Germany on railway automation [2] Group 3 - The global development of AI infrastructure is characterized by specialization, sovereignty, and regional differentiation, presenting a historical opportunity for countries and enterprises to build AI systems that meet their development needs [3] - Leveraging AI technology is essential for driving comprehensive digital transformation and initiating a new chapter in the development of the digital economy [3]

Financial Data and Key Metrics Changes - Revenue for the quarter totaled $167 million, which is above the midpoint of guidance, but down 4% year-over-year and 8% sequentially [5][17] - Non-GAAP operating income was $24 million, and non-GAAP EPS was $0.37, exceeding the high end of guidance [5] - Gross margin was approximately 42%, in line with guidance, while operating expenses were approximately $46 million, below guidance [20][23] Business Line Data and Key Metrics Changes - The Semiconductor business grew 10% sequentially and 3% year-over-year, representing 74% of total revenue [17] - Advanced Packaging saw significant growth, with expectations to double revenue to about $150 million in 2025 [28] - Revenue from the Compound Semiconductor market declined to $14 million, accounting for 9% of total revenue [18] Market Data and Key Metrics Changes - Revenue from China customers was flat in Q1 compared to Q4, increasing their share of total revenue from 39% to 42% [19] - Revenue from the Asia Pacific region (excluding China) increased from 31% to 36%, driven by sales to semiconductor customers in Taiwan [19] - The United States accounted for 15% of revenue, while EMEA contributed 7% [19] Company Strategy and Development Direction - The company aims to capitalize on long-term semiconductor industry growth, focusing on laser annealing and ion beam deposition technologies [10][12] - Strategic wins include being awarded Intel's 2025 EPYC supplier award, which validates the company's position in the semiconductor industry [6] - The company is focused on expanding its served available market (SAM) in laser annealing and advanced packaging due to increasing demand driven by AI and high-performance computing [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term strategy despite uncertainties from recently enacted tariffs, which are causing some customers to delay shipments [9][22] - The company anticipates that gate all around and advanced packaging revenue could double in 2025 compared to 2024 [24] - Management noted that while there are headwinds from the mature node business in China, there are still growth opportunities in leading-edge investments [24] Other Important Information - Cash and short-term investments at the end of the quarter were $353 million, an increase from $345 million [21] - The company is monitoring tariff impacts closely and is working with customers to mitigate potential disruptions [22] Q&A Session Summary Question: Could you elaborate on the advanced packaging orders for your lithography tools? - The company announced $35 million in lithography orders, driven by advanced packaging and AI applications, with expectations for significant year-over-year growth in 2025 [28] Question: What is driving the recent strength in the lithography business? - The growth is primarily due to capacity buys from customers, particularly OSATs and IDMs, driven by demand for AI and high bandwidth memory [31] Question: Can you discuss the impact of tariffs on shipments to China? - Some customers are delaying shipments due to tariffs, with an anticipated $15 million impact on Q2 guidance [32][22] Question: What parts of the semiconductor business are expected to grow in 2025? - The company expects growth in advanced packaging and high bandwidth memory, which could offset declines in other areas [36][64] Question: Are there any updates on GaN power applications? - The company is making progress with a customer for GaN power applications, with plans to start pilot production in 2026 [50] Question: What is the outlook for the second half of the year? - The company anticipates that second half revenue could be flattish, with strength in gate all around and advanced packaging potentially offsetting headwinds from China [56]

Financial Data and Key Metrics Changes - Revenue totaled $167 million, above the midpoint of guidance, down 4% year-over-year and 8% sequentially [16] - Non-GAAP operating income was $24 million, and non-GAAP EPS was $0.37, exceeding the high end of guidance [4] - Gross margin was approximately 42%, in line with guidance, while operating expenses were approximately $46 million, below guidance [19] Business Line Data and Key Metrics Changes - The Semiconductor business grew 10% sequentially and 3% year-over-year, representing 74% of total revenue [16] - Advanced Packaging saw significant growth, with expectations to double revenue to about $150 million in 2025 [28] - Compound Semiconductor revenue declined to $14 million, accounting for 9% of total revenue [17] Market Data and Key Metrics Changes - Revenue from China customers was flat in Q1, increasing their share from 39% to 42% of total revenue [18] - Revenue from the Asia Pacific region (excluding China) increased from 31% to 36%, driven by sales to semiconductor customers in Taiwan [18] - The United States accounted for 15% of revenue, while EMEA represented 7% [18] Company Strategy and Development Direction - The company aims to capitalize on long-term semiconductor industry growth, focusing on laser annealing and ion beam deposition technologies [8] - Strategic wins include being awarded Intel's 2025 EPYC supplier award, validating the company's position in the semiconductor industry [5] - The company is expanding its served available market (SAM) in laser annealing and advanced packaging, driven by demand for AI and high-performance computing [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term strategy despite uncertainties from recently enacted tariffs affecting customer shipments and costs [7][21] - The company anticipates growth in 2025, particularly in gate all around and advanced packaging, potentially doubling revenue in these areas [23][24] - Management noted that while there are headwinds in the mature node business in China, opportunities exist in GaN power and scientific research areas [24] Other Important Information - Cash and short-term investments at the end of the quarter were $353 million, with cash flow from operations totaling $20 million [20] - The company is monitoring tariff impacts closely and is working with customers to mitigate potential disruptions [21] Q&A Session Summary Question: Could you elaborate on the advanced packaging orders for lithography tools? - The company announced $35 million in lithography orders, driven by advanced packaging and AI applications, expecting significant year-over-year growth in 2025 [28][29] Question: What is the impact of tariffs on shipments to China? - Some customers are delaying shipments due to tariffs, with an anticipated $15 million impact on Q2 guidance [33][34] Question: What parts of the semiconductor business are expected to grow in 2025? - The company expects growth in advanced packaging and high bandwidth memory, potentially offsetting declines in other areas [36][65] Question: Are there any updates on GaN power applications? - The company is making progress with a customer for GaN power, with plans to start pilot production in 2026 [51] Question: What is the outlook for second-half revenue? - The company anticipates second-half revenue to be flattish, with strengths in advanced packaging and gate all around potentially offsetting challenges in China [56][57]