Core Viewpoint - Chip leader Chip Origin Co., Ltd. announced a plan to acquire 97.0070% equity of Chip Coming Technology through a combination of issuing shares and cash payment, along with raising supporting funds [1][3] Group 1: Acquisition Details - The company plans to purchase the equity from 31 trading parties, including Chip Coming Co-Creation and Hu Zhenbo, while also raising funds from no more than 35 specific investors at a price of 106.66 yuan per share [3] - The total amount of raised funds will not exceed 100% of the transaction price for the asset acquisition, with the number of shares issued not exceeding 30% of the total share capital post-transaction [3] - The raised funds will be used for cash payment for the transaction, intermediary fees, transaction taxes, and to supplement the working capital of both the listed company and the target company [3] Group 2: Company Performance and Orders - As of the second quarter of 2025, the company reported a record high order backlog of 3.025 billion yuan, with new orders signed from July 1 to September 11 amounting to 1.205 billion yuan, representing a significant year-on-year increase of 85.88% [5] - AI computing-related orders accounted for approximately 64% of the new signed orders, indicating a strong focus on AI technology [5] - The company achieved a revenue of 974 million yuan in the first half of 2025, with a year-on-year growth of 4.49%, although it reported a net loss of 320 million yuan [6] Group 3: Company Background and Market Position - Chip Coming Technology, established in 2018, is one of the first domestic RISC-V CPU IP providers in China, with over 100 employees and a portfolio of dozens of IP products [4] - The company is recognized as a leader in AI ASIC and aims to enhance its market competitiveness through the acquisition, which will complete its full-stack heterogeneous computing layout [5]

Core Viewpoint - Chip Origin Co., Ltd. plans to acquire 97.01% of Chip Lai Technology, marking a significant asset restructuring and enhancing its position in the semiconductor industry [1] Group 1: Acquisition Details - The acquisition will make Chip Lai Technology a wholly-owned subsidiary of Chip Origin, which currently holds 2.99% of its shares [1] - The transaction is expected to be completed by September 12, 2025, when trading will resume [1] Group 2: Company Background - Chip Origin is recognized as the "first stock of China's semiconductor IP" and is regarded as a leader in AI ASIC technology [1] - The company holds the top market share in China's semiconductor IP licensing business and ranks eighth globally, with licensing revenue ranking sixth worldwide [1][2] Group 3: AI ASIC and RISC-V Technology - Chip Origin has developed a comprehensive chip customization platform for various AI applications, with AI-related revenue accounting for approximately 52% of its chip design business in the first half of 2025 [2] - Chip Lai Technology, established in 2018, is a leading provider of RISC-V CPU IP in China, with over 300 global clients and applications across multiple sectors [2][3] Group 4: Strategic Importance of the Acquisition - The acquisition will enhance Chip Origin's capabilities in heterogeneous computing and strengthen its market competitiveness in AI ASIC design [3] - The integration of RISC-V technology will allow for more flexible and differentiated chip solutions, leveraging the open RISC-V ecosystem for various AI applications [4] Group 5: Financial Performance - As of the end of Q2 2025, Chip Origin's order backlog reached 3.025 billion yuan, marking a historical high and indicating strong future performance [5] - New orders signed from July 1 to September 11, 2025, amounted to 1.205 billion yuan, representing an 85.88% increase compared to the same period last year, with AI-related orders making up about 64% of the total [5]

Investment Rating - The report assigns a "Buy" rating for the company, indicating that the stock is expected to outperform the benchmark index by more than 15% [11]. Core Insights - The company's revenue for the first half of 2025 reached 974 million yuan, a year-on-year increase of 4.49%, while the net profit attributable to shareholders was a loss of 320 million yuan. In Q2 2025, revenue was approximately 584 million yuan, a quarter-on-quarter increase of 49.90%, with the net loss narrowing by 54.8% compared to Q1 [1][3]. - The significant growth in Q2 performance was driven by increases in intellectual property licensing fees and mass production business revenue, with licensing fees reaching 187 million yuan, up 16.97% year-on-year and 99.63% quarter-on-quarter, and mass production revenue at 261 million yuan, up 11.65% year-on-year and 79.01% quarter-on-quarter [3]. - The demand for AI ASICs is strong, with new and existing orders reaching a historical high. In Q2 2025, the company signed new orders worth 1.182 billion yuan, a nearly 150% increase quarter-on-quarter, and the total order backlog reached 3.025 billion yuan, up 23.17% quarter-on-quarter [3]. - The company has been investing in Chiplet technology and its applications in AIGC and smart driving for five years, establishing a core barrier through high R&D investment. In Q2, the proportion of R&D expenses decreased by 25.76 percentage points [3]. - Future revenue projections are optimistic, with expected revenues of 2.996 billion yuan, 4.621 billion yuan, and 6.077 billion yuan for 2025E, 2026E, and 2027E respectively, reflecting year-on-year growth rates of 29.0%, 54.2%, and 31.5% [3][5]. Summary by Sections Financial Performance - In H1 2025, the company reported total revenue of 974 million yuan, with a net loss of 320 million yuan. Q2 revenue was 584 million yuan, with a significant quarter-on-quarter growth of 49.90% and a reduced net loss of 99 million yuan [1][3]. - The company anticipates revenues of 2.996 billion yuan in 2025E, 4.621 billion yuan in 2026E, and 6.077 billion yuan in 2027E, with corresponding net profits projected to improve significantly over the years [5]. Business Segments - The growth in Q2 was primarily driven by intellectual property licensing and mass production, with licensing fees at 187 million yuan and mass production revenue at 261 million yuan [3]. - The company has a strong order backlog, with 3.025 billion yuan in orders, of which nearly 90% is from ASIC business, providing a solid foundation for future revenue [3]. R&D and Future Outlook - The company is focusing on Chiplet technology and its applications in smart driving, with a strategic shift towards "IP as a Chiplet" [3]. - The expected growth in AI ASIC demand from major internet companies and automotive manufacturers positions the company favorably for future performance [3].

Core Viewpoint - The company, VeriSilicon Limited, is conducting a share transfer at a price of 105.21 CNY per share, which is approximately 70% of the closing price on August 25, 157.9 CNY. The transfer involves 26,285,663 shares, accounting for 5% of the total share capital, due to the shareholders' funding needs [2][7][8]. Group 1: Share Transfer Details - The share transfer was quickly finalized within four days after the announcement, with 37 institutional investors participating, including fund management companies, insurance companies, and private equity firms [5]. - The shareholders involved in the transfer include VeriSilicon Limited, which is the largest shareholder, and several other investment partnerships, all citing funding needs as the reason for the transfer [8][9]. Group 2: Business Performance and Orders - The company has been recognized as a leader in AI ASIC technology, with successful chip tape-outs at advanced process nodes, including 5nm FinFET technology [10]. - In the second quarter, the company reported new orders exceeding 700 million CNY for ASIC design revenue, reflecting a more than 700% quarter-over-quarter increase and over 350% year-over-year growth [11]. - The company has a strong order backlog, reaching 3.025 billion CNY as of the end of the second quarter of 2025, marking a 23.17% increase from the previous quarter [12].

Macro Strategy - The report analyzes three historical cases of capacity adjustment over a century, highlighting the negative feedback loop of capacity imbalance and the importance of government intervention to restore balance [1][12] - It emphasizes that supply-demand rebalancing requires simultaneous efforts in controlling capacity, restoring credit, and stabilizing employment, rather than relying solely on supply or demand policies [1][12] Fixed Income - The new bond value-added tax regulation enhances the relative attractiveness of credit bonds, as their interest income is not subject to the tax, while government bonds lose their tax exemption [2][3][13] - The adjustment in tax rates is expected to narrow the yield spread between credit bonds and other interest rate bonds by approximately 10 basis points, with potential increases in relative value for credit bonds by 5-15 basis points for proprietary trading departments [2][3][14] Industry Analysis - The asset operation and maintenance (O&M) industry is gaining importance post-capital formation peak, with growth driven more by product development than by personnel or capital [4][15] - The report indicates that the O&M market is projected to grow significantly, with the current market size at approximately 2.44 trillion and expected to reach around 5.5 trillion in ten years [4][15] - The report suggests focusing on companies like Borui Data, Rongzhi Rixin, and Xianheng International, as they are positioned to benefit from the increasing demand for high-quality O&M services [4][15] Electronic Industry - The ASIC business model requires service providers to have strong IP design and SoC design capabilities, with major players like Broadcom and Marvell holding significant market shares [5][16][17] - The custom chip market is projected to reach $55.4 billion by 2028, with a compound annual growth rate (CAGR) of 53% from 2023 to 2028, driven by the demand for AI acceleration [5][16][17] - The report highlights the potential for margin pressure in the custom chip business due to increased competition from domestic firms entering the AI ASIC market [5][16][17]

Group 1: TSMC's Investment and Pricing Strategy - TSMC plans to invest $165 billion in capacity expansion in the U.S., which may increase its chances of tariff exemptions [1] - TSMC's management indicated that potential semiconductor tariffs could suppress electronic product demand and reduce company revenue [1] - Due to inflation and potential tariff costs, TSMC expects profit margins from overseas factories to erode by 3-4 percentage points in the later years of the next five years [1] Group 2: Wafer Pricing and Currency Impact - TSMC is expected to increase wafer prices by 3%-5% globally due to strong demand for advanced processes and structural currency trends [2] - U.S. customers are reportedly locking in higher quotes for 4nm capacity at TSMC's U.S. factories, with plans to raise wafer prices by at least 10% [2] Group 3: 2nm Capacity Expansion - TSMC plans to start mass production of 2nm technology in the second half of 2025, with significant demand anticipated [5] - The projected capacity for 2nm will be 10k wafers per month (kwpm) in 2024, increasing to 40-50 kwpm in 2025, and reaching 90 kwpm by the end of 2026 [5] - Major clients for 2nm technology will include Apple, AMD, and Intel, with Apple expected to adopt the technology in Q4 2025 [5][6] Group 4: AI and Cryptocurrency Demand - By the end of 2026, AI ASICs will begin utilizing 2nm capacity, with increased usage expected in 2027 [6] - The contribution of cloud AI semiconductor business to TSMC's revenue is projected to rise from 13% in 2024 to 25% in 2025, and further to 34% by 2027 [12] Group 5: B30 GPU and Market Demand - TSMC's Blackwell chip production is expected to align with the demand from NVL72 server rack shipments, with a projected shipment of 30,000 racks in 2025 [10] - The design of the Chinese version of the B30 GPU is anticipated to be similar to the RTX PRO 6000, with demand continuing to grow [12] - If the B30 can be sold in China, it could account for 20% of TSMC's revenue growth in 2026 [12]

Investment Rating - The industry investment rating is classified as In-Line [8]. Core Insights - The report addresses the mismatch in AWS Trainium2/2.5 chip shipments attributed to unstable PCB yield rates, with an expectation of approximately 1.1 million chip shipments in 2025 [1][3]. - Supply chain checks estimate total shipments for the Trainium2/2.5 life cycle (2H24 to 1H26) at 1.9 million units, with a focus on production and consumption in 2025 [2][11]. - The report highlights a significant gap between upstream chip production and downstream consumption, suggesting improvements in yield rates may reduce this gap by 2H25 [6][11]. Upstream - Chip Output Perspective - As of late 2024, 0.3 million units of Trainium2 chips were produced, with a projected total of 1.1 million shipments in 2025, primarily packaged by TSMC (70%) and ASE (30%) [3][11]. - An additional 0.5 million Trainium2.5 chips are expected to be produced in 1H26, bringing the total life cycle shipments to 1.9 million units [3]. Midstream - PCB Perspective - Downstream checks indicate potential shipments exceeding 1.8 million units of Trainium chips, averaging around 200K per month since April [4][11]. - Key suppliers for PCB boards include Gold Circuit and King Slide, which provide essential components for Trainium computing trays [4]. Downstream - Server Rack System Perspective - Wiwynn is identified as a key supplier for server rack assembly, with revenue from AWS Trainium2 servers increasing in 1Q25, aligning with the upstream chip production estimates [5][11]. - The report notes that each server rack can accommodate 32 chips, supporting the projected consumption figures [5]. Component Suppliers - Major suppliers for Trainium2 AI ASIC servers include AVC for thermal solutions, Lite-On Tech for power supply, and Samsung for memory components [10][18]. - Other notable suppliers include King Slide for rail kits and Bizlink for interconnect solutions [10][18]. Future Projections - For Trainium3, shipments are estimated at 650K for 2026, with production managed by Alchip [12][13]. - The report anticipates that Trainium4 will enter small production by late 2027, with a rapid ramp-up expected in 2028 [14].

Investment Rating - The report maintains an "Overweight" investment rating for the industry [1] Core Insights - Marvell has raised its 2028 potential market size (TAM) for data centers from $75 billion to $94 billion, with custom acceleration chips expected to reach $55.4 billion, growing at a CAGR of 53% from 2023 to 2028 [2] - The report emphasizes the importance of the "XPU attachment market," which includes various components such as NICs and power management ICs, projected to grow significantly [2] - The trend towards using copper cables for short-distance interconnections in CSP ASIC server solutions is becoming clear, with major companies like AWS and Microsoft adopting AEC copper cables [3] Summary by Sections Market Size and Growth - Marvell's updated TAM includes $55.4 billion for custom acceleration chips, $19 billion for interconnect chips, and $13.2 billion for switching chips, with respective CAGRs of 53%, 35%, and 17% from 2023 to 2028 [2] Industry Trends - The report highlights a clear trend towards AI ASIC chips, with increasing demand for copper cables among major CSPs, indicating a robust growth opportunity for related suppliers [3] Key Companies in the Supply Chain - Companies involved in the copper cable and connector market include Bochuang Technology, Zhaolong Interconnect, and Huafeng Technology, which are expected to benefit from the growing demand for AI ASIC chips and related components [4]

Investment Rating - The report maintains an "Overweight" (OW) rating on several companies in the AI ASIC supply chain, including Accton, Wiwynn, Bizlink, and King Slide in downstream systems, as well as TSMC, Broadcom, Alchip, MediaTek, Advantest, KYEC, Aspeed, and ASE in upstream semiconductors [1][11]. Core Insights - The AI ASIC market is expected to grow significantly, with NVIDIA outpacing the ASIC market in 2025, generating enthusiasm for ASIC vendors. Asian design service providers like Alchip and MediaTek are anticipated to gain market share due to their efficient operations and quality services [2][21]. - The global semiconductor market is projected to reach $1 trillion by 2030, with AI semiconductors being a major growth driver, estimated to reach $480 billion, comprising $340 billion from cloud AI semiconductors and $120 billion from edge AI semiconductors [21][22]. Summary by Sections AI ASIC Market Developments - AWS Trainium: Alchip has taped out the Trainium3 design, with wafers already produced. Alchip is expected to have a strong chance of winning the 2nm Trainium4 project [3][15]. - Google TPU: Broadcom is expected to tape out a new 3nm TPU after the Ironwood (TPU v7p) enters mass production in 1H25, while MediaTek is also preparing for a 3nm TPU tape-out [4][18]. - Meta MTIA: Preliminary volume forecasts for MTIAv3 are expected in July, with considerations for larger packaging for MTIAv4 [5]. Downstream and Upstream Suppliers - Downstream suppliers for AWS Trainium2 include Gold Circuit for PCB boards, King Slide for rail kits, and Bizlink for active electrical cables. Wiwynn is expected to see 30-35% of its total revenue from Trainium2 servers in 2025 [6][11]. - Key upstream suppliers include TSMC for foundry services, Broadcom for IP and design services, and Alchip for back-end design services [11][10]. Market Size and Growth Projections - The AI semiconductor market is projected to grow to $50 billion by 2030, representing 15% of cloud AI semiconductors. This indicates a significant opportunity for AI ASIC vendors despite NVIDIA's dominance in the AI GPU market [21][24]. - The report estimates that the global AI capex total addressable market (TAM) for 2025 could reach around $199 billion, driven by major cloud service providers [26][58]. Financial Implications - Alchip's revenue from Trainium3 chips is estimated to be $1.5 billion in 2026, with expectations of continued growth in the AI ASIC market [18][21]. - MediaTek's revenue from TPU projects is projected to grow significantly, with estimates of $1 billion in 2026 and potential growth to $2-3 billion in 2027 [19][21].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies involved in AI ASIC servers. Core Insights - The AI ASIC market is expected to grow significantly, with Meta's MTIA AI servers potentially marking a milestone in 2026. The total AI ASIC volume could exceed nVidia's AI GPU volume by 2026 [1][3][12] - nVidia currently dominates the AI server market with over 80% market value, while ASIC AI servers hold approximately 8-11% market value share. However, unit comparisons suggest that Google and AWS's AI ASICs could reach 40-60% of nVidia's GPU volume by 2025 [1][3] - Meta's MTIA AI server is projected to ramp up significantly, with expectations of 1 to 1.5 million units of MTIA V1 and V1.5 by late 2025 to 2026 [10][12] Summary by Sections AI ASIC Market Dynamics - The AI ASIC market is experiencing aggressive growth, with more cloud service providers (CSPs) developing their own ASIC solutions, including Meta and Microsoft [1][3] - nVidia is responding to competition by unveiling NVLink Fusion, which allows inter-chip connections between its GPUs and third-party CPUs, indicating a proactive approach to maintain its market position [2] Meta's MTIA AI Server Development - Meta's MTIA AI server is set to launch its first ASIC (MTIA T-V1) by late 2025, with subsequent versions (V1.5 and V2) expected in mid-2026 and 2027, respectively [9][10] - The MTIA T-V1.5 is anticipated to be significantly more powerful than V1, with a larger interposer size and complex design [9][10] Supply Chain and Component Insights - Key suppliers for Meta's MTIA projects include Quanta, Unimicron, EMC, WUS, and Bizlink, which are expected to benefit from the growing demand for AI ASICs [12][13][14][15][19] - The report highlights the importance of baseboard management controllers (BMCs) in Meta's ASIC AI server development, with an estimated 23 BMCs per rack [17][18] Competitive Landscape - Despite nVidia's current leadership in AI computing, the report suggests that the gap is narrowing as ASIC solutions improve in specifications and performance [3][7] - The specifications of AI ASICs from companies like Google and AWS are catching up to nVidia's offerings, although nVidia still holds advantages in connectivity and ecosystem [7][8]