Summary of Conference Call on Greater China Semiconductors Industry Overview - **Industry**: Greater China Semiconductors - **Focus**: NOR Flash and DDR4 DRAM pricing trends Key Points 1. **Price Hike Anticipation**: A price hike for NOR Flash is expected starting from Q3 2025, as pricing has likely reached its lowest point. This is supported by increased foundry wafer prices from Chinese foundries since late Q2 2025, which may lead to higher prices for design houses in Q3 2025 [2][10][11] 2. **Vendor Pricing Strategies**: GigaDevice is reportedly reducing low-density NOR production while increasing prices for mainstream NOR by up to 10%. This strategy is expected to benefit NOR Flash vendors including GigaDevice, Winbond, and Macronix [2][10] 3. **Top Pick**: Winbond is highlighted as the top pick among NOR Flash vendors due to its strong pricing power in the current market environment [2][10] 4. **Market Dynamics**: The NOR Flash market is experiencing an upcycle driven by limited supply expansion and stronger demand, particularly in sectors like automotive for SLC NAND [10][11] 5. **Risks**: Potential risks include a downcycle in NOR Flash pricing due to faster supply expansion or demand weakness, as well as weaker-than-expected DRAM pricing due to oversupply [10][11][12] Company-Specific Insights 1. **GigaDevice Semiconductor**: The price target for GigaDevice is set at Rmb169, based on a residual income model with key assumptions including a cost of equity of 8.9% and a medium-term growth rate of 18% [8] 2. **Macronix International**: Valuation methodology for Macronix is based on a price-to-book ratio of approximately 0.8x for 2025, reflecting the cyclical nature of the memory industry [6] 3. **Winbond Electronics**: Winbond's valuation is pegged at a price-to-book ratio of 1.3x for 2025, indicating stronger pricing power compared to its peers [7] Additional Considerations - **Analyst Ratings**: The overall industry view is considered attractive, with various companies in the semiconductor sector receiving ratings ranging from Overweight to Underweight based on their performance and market conditions [3][68] - **Investment Banking Relationships**: Morgan Stanley has ongoing investment banking relationships with several companies in the semiconductor sector, which may influence research objectivity [4][20][21] This summary encapsulates the key insights and data points from the conference call regarding the Greater China semiconductor industry, particularly focusing on NOR Flash pricing trends and company-specific evaluations.