Core Viewpoint - SMIC (688981.SH) is experiencing high demand with a capacity utilization rate of 95.8% in Q3, indicating a supply-demand imbalance in its production lines [1] Group 1: Production and Capacity - The company has a full production line, with significant orders leading to a high capacity utilization rate [1] - The guidance for Q4 does not show a significant increase due to a severe shortage of memory in the mobile market, causing concerns among customers about the assembly of complete devices [1] Group 2: Market Dynamics - Customers are currently inclined to stockpile memory to ensure complete device assembly, but there is a general caution regarding supply uncertainties for Q1 of the following year [1] - The company has taken on a large number of urgent orders for analog, memory including NOR/NAND Flash, and MCU, leading to a temporary decrease in the proportion of mobile business as some non-urgent orders are postponed [1] Group 3: Pricing and Supply Outlook - The impact of memory supply is twofold: it boosts current orders but creates uncertainty for the following year [1] - A supply shortage or surplus of just 5% in the memory market could significantly affect prices, with the current industry facing a supply gap and high price levels expected to persist [1] Group 4: Market Stability - Products like NOR Flash, NAND Flash, and MCU have long validation cycles and high barriers to entry, making it difficult for new entrants to quickly replace existing suppliers [2] - Even with new manufacturers attempting to enter the market, it takes at least 16 months from initial testing to mass production, ensuring the stability of current suppliers' market positions [2]