Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Equities** market, particularly the impact of **tariffs** and **artificial intelligence (AI)** on stock performance. [1][2][7] Core Insights - **Tariff Impact**: - Goldman Sachs economists predict the effective tariff rate will rise by **17 percentage points to 19%** by early 2027, which is **3 percentage points higher** than previous forecasts. [2] - Despite this, the equity market remains largely unconcerned, with the S&P 500 reaching new all-time highs and the GS Tariff Risk basket only **4% off its peak**. [2][3] - Tariff revenue continues to increase, with an estimated **$240 billion** increase in annual tariff revenue compared to the previous year. [3] - **AI and Big Tech**: - The focus has shifted towards beneficiaries of President Trump's policies, particularly in AI and Big Tech, with significant investments announced, including a **$92 billion commitment** to AI and energy initiatives. [7][8] - The **Big Beautiful Bill** allows companies to expense all domestic R&D costs in the year they are incurred, benefiting major tech companies that account for approximately **47% of R&D spending** by S&P 500 companies. [10][11] - The performance of AI thematic baskets has been strong, with various AI-related sectors showing significant gains. [10] - **Market Performance**: - The US Tech Select Sector Index and MegaCap tech index have risen approximately **35%** in the last three months, outperforming the S&P 500, which increased by **19%**. [19] - The Information Technology sector now represents about **34%** of the S&P 500 by market cap, matching historical highs. [20][21] Additional Insights - **Valuation Concerns**: There are concerns regarding tech valuations and concentration, but some analysts argue that the earnings growth and margins justify the current valuations. [22] - **Dollar Weakness**: A weaker dollar, influenced by trade policies, is expected to benefit tech earnings, particularly for companies with high international sales exposure. [15] - **Investor Sentiment**: Investor positioning remains negative but not extreme, indicating potential for market adjustments. [29] - **Systematic Buying**: There is ongoing support from systematic investors, with an estimated **$67 billion** in global equity buying in the last month, primarily driven by trend-following strategies. [33] Conclusion - The conference call highlighted the resilience of the equity market in the face of rising tariffs, the significant role of AI and tech in driving market performance, and the ongoing adjustments in investor sentiment and market dynamics. The focus on R&D tax benefits and the implications of government policies on tech companies are critical for future investment strategies.

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - The company has received multiple orders for marine engineering and chemical vessels since 2024 and is in active negotiation for several hot - project orders [28]. - The company is seizing the opportunity of AI development, integrating AI with existing industries, and has achieved some results in the intelligent and automated R & D and application of high - end equipment, with subsequent plans to increase R & D efforts [29]. - In 2024, the company's export sales accounted for 80.44%. It has established sales and after - sales service networks overseas and is actively expanding the high - end equipment business market [30]. - The company's daily business is affected by exchange rate fluctuations, but it has rich foreign exchange business experience and takes measures to reduce the impact, so the impact on performance is small [30]. - The company is building the "Tongzhou Bay Equipment Manufacturing Base Project" to expand high - end equipment production capacity, and it is expected to be gradually put into use in the second half of this year [30]. - Since the acquisition of Kalmar's port container crane business in 2022, the company's port machinery business has developed rapidly, with sufficient orders on hand and continuous improvement in production and sales scale [31]. - Considering factors such as 2024's profitability, future capital needs, industry conditions, and shareholder returns, the company increased its dividend in 2024 and plans to increase it further when conditions permit [31]. 3. Summary According to the Directory 3.1 Research Basic Situation - The research object is Runbang Co., Ltd., belonging to the special equipment industry. The reception time was May 29, 2025. The company's reception staff included the vice - president, the secretary of the board of directors, the representative of securities affairs, and the commissioner of securities affairs [17]. 3.2 Detailed Research Institutions - The research institutions included Bisheng Fund and Guoxin Asset Management. The relevant personnel were Liu Da from Bisheng Fund and Wu Wencheng from Guoxin Asset Management [21]. 3.3 Research Institution Proportion - The proportion of other types of institutions was 100% [27]. 3.4 Main Content Information - **Ship orders**: Since 2024, the company has received orders for various ships from countries and regions such as Germany, Singapore, and Latin America and is negotiating multiple hot - project orders [28]. - **High - end equipment technology development**: The company is integrating AI with existing industries, has achieved intelligent and automated R & D and application in some products, and has obtained relevant orders. It will further increase R & D efforts [29]. - **Overseas market layout**: In 2024, the export sales accounted for 80.44%. The company has established sales and after - sales service networks overseas and is expanding the high - end equipment business market [30]. - **Exchange rate impact**: The company's business is affected by exchange rate fluctuations, but it has measures to reduce the impact, so the impact on performance is small [30]. - **Tongzhou Bay base**: The company is building the "Tongzhou Bay Equipment Manufacturing Base Project" to expand high - end equipment production capacity, which is expected to be gradually put into use in the second half of this year [30]. - **Port machinery orders**: Since the acquisition of Kalmar's business in 2022, the port machinery business has developed rapidly, with sufficient orders on hand and continuous improvement in production and sales scale [31]. - **Dividend increase**: Considering multiple factors, the company increased its dividend in 2024 and plans to increase it further when conditions permit [31].

Core Viewpoint - TSMC is adapting its strategies to meet the increasingly diverse demands of its customers in the semiconductor industry, emphasizing a shift towards tailored manufacturing capabilities for specific market segments [1][17]. Group 1: Industry Trends - The semiconductor industry is evolving with the rise of artificial intelligence, which is expected to drive demand for data center processors as a primary application of TSMC's advanced manufacturing technology [2][3]. - TSMC's future roadmap includes three key directions: maximizing transistor density and performance efficiency, achieving high performance efficiency at reasonable costs, and providing multi-chip packaging solutions suitable for data centers [3][5]. Group 2: Technological Advancements - TSMC plans to introduce advanced process technologies such as NP, N, NP, and A for mobile and consumer-grade SoCs, which are optimized for high performance without the complexity and cost of back-end power supply [5][17]. - The company is also expanding its advanced packaging product portfolio to meet the growing demand for multi-chip packaging solutions in AI and high-performance computing applications [5][18]. Group 3: Innovation and Efficiency - TSMC's transition from N to N nodes has seen a 30% increase in mixed chip density, while the transition to A is expected to yield a 7% to 10% increase in transistor density [6][13]. - The company is confident in achieving significant geometric scaling advantages with the A node, which is expected to be mass-produced by 2028 [6][11]. Group 4: Customer-Centric Approach - TSMC serves over 500 customers from various segments and is continuously improving its strategies to meet the diverse needs of its clientele, moving from a one-size-fits-all approach to a series of dedicated nodes and packaging solutions [17][18]. - The company is committed to allowing customers to reuse their IP throughout the development of its manufacturing processes, reinforcing its long-standing "everyone can be a foundry" philosophy [17].

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the **U.S. economy** and the impact of **Trump's economic policies** on various sectors, including manufacturing and consumer confidence. Core Points and Arguments 1. **Stock Market Performance**: Following Trump's inauguration, the U.S. stock market experienced significant declines, with the S&P 500 index dropping by 10.5% and the Nasdaq composite index falling by 14.3% from its peak [4][5]. 2. **Consumer Confidence Decline**: Consumer confidence has sharply decreased, with the University of Michigan's consumer confidence index falling to 57.9, a decline of 11% month-over-month and 27% year-over-year [5]. The Conference Board's consumer confidence index also showed a downward trend, recording 92.9, marking four consecutive months of decline [5]. 3. **Manufacturing Sector Weakness**: The manufacturing PMI fell back into contraction territory, attributed to rising material costs due to tariffs [6]. Although the services PMI improved, service producers' confidence in future prospects dropped to its second-lowest level since 2022 [7]. 4. **Economic Growth Forecasts**: The Federal Reserve's median GDP growth forecast for Q4 2025 was downgraded to 1.7% from a previous estimate of 2.1% [8]. The core PCE price index forecast was raised from 2.5% to 2.8%, complicating monetary policy decisions [8]. 5. **Trade Deficit Impact**: The U.S. trade deficit widened to $131.4 billion in January, a 34% increase month-over-month, negatively impacting GDP growth forecasts [10]. The Atlanta Fed's GDPNow model projected a 2.4% decline in Q1 GDP following this data release [10]. 6. **Long-term Economic Outlook**: Analysts predict a significant slowdown in U.S. economic growth, with estimates dropping from nearly 3% to around 1.5% over the next few years [12]. The uncertainty surrounding Trump's policies is expected to weigh on economic activity [13]. 7. **Government Spending Cuts**: The Trump administration has initiated substantial cuts to government spending, claiming to save taxpayers $115 billion, but these measures may not significantly reduce the federal deficit [17][24]. 8. **Tariff Policies**: Trump's administration has implemented aggressive tariff policies, raising average tariff rates from 2.5% to 8.4%, the highest level since 1946 [27]. This has sparked trade tensions with major partners like Canada, the EU, and China [27][31]. 9. **Global Trade War**: The U.S. is engaged in a trade war that could have negative repercussions for global economic growth, particularly affecting countries like Mexico and Canada [29][31]. The OECD forecasts a decline in global growth rates due to increased trade barriers [31]. 10. **Investor Sentiment**: The uncertainty surrounding tariffs and trade policies has led to a decrease in foreign direct investment in the U.S., with an estimated reduction of $40 billion annually due to heightened trade policy uncertainty [39]. Other Important but Possibly Overlooked Content 1. **Consumer Spending Trends**: Despite a decline in consumer confidence, consumer spending remained robust, influenced by strong performance during the previous shopping season [7]. 2. **Employment Market Resilience**: The job market has not yet shown signs of significant distress, with unemployment claims not spiking, indicating a lag in the impact of policy changes on employment [7]. 3. **Potential for Future Tax Cuts**: There is speculation about the possibility of new tax cuts being introduced, but their effectiveness in stimulating the economy remains uncertain [15][16]. 4. **Impact of Immigration Policies**: The administration's immigration policies, including the deportation of undocumented immigrants, have raised concerns about potential labor market tightness, although current deportation rates are lower than during the previous administration [22][23]. 5. **Long-term Economic Strategy**: The Trump administration's long-term economic strategy appears to focus on reducing the federal deficit through spending cuts and tax reforms, but the feasibility of these measures in the face of rising entitlement spending remains questionable [23][25].