Summary of Conference Call Notes on Greater China Semiconductors Industry Overview - The focus is on the semiconductor industry in Greater China, particularly memory stocks and companies involved in integrated device manufacturing (IDM), foundry services, and IC design. Key Companies Discussed 1. **Winbond** - Remains the top pick for investment in the sector [1] 2. **Macronix** - Plans to raise fab utilization and execute pricing power, delaying 3D NOR development [4] - Will invest NT$22 billion (~US$700 million) to increase 12-inch fab production capacity from 20k to 30k wafers per month, addressing an "extreme shortage" in eMMC [4][10] - Expected to catch up on NOR pricing hikes and respond to MLC market undersupply from 1Q26 [10] 3. **Powerchip** - Anticipated re-rating due to a partnership with Micron, with potential long-term benefits from advanced DRAM production [5] - Valuation methodology changed to book value, with a price target set at NT$77, based on 1.7x book value per share (BVPS) [5][34] - Expected earnings upside and pricing power from 2Q26 [10] 4. **GigaDevice** - More disciplined in pricing adjustments, focusing on new business areas [6] - Expected to show meaningful margin expansion in 1H26 [10] Market Dynamics - IDMs are leading the cycle outperformance, with laggards expected to catch up in share price performance [3] - The under-guidance from Nanya Tech presents a good entry point for investors [3] - The memory up-cycle is anticipated to continue, with 1Q26 marking the third quarter of this cycle [3] Financial Projections - Earnings estimates and price targets have been raised for Macronix, GigaDevice, and Powerchip [10] - Macronix's price target increased from NT$72.50 to NT$93.00 [7] - GigaDevice's price target raised from RMB288.00 to RMB355.00 [7] - Powerchip's price target increased from NT$56.00 to NT$77.00 [7] Additional Insights - The semiconductor industry is experiencing a shift with increased demand for specialty DRAM and NAND products, driven by consumer electronics [41] - The pricing power in the industry is expected to remain strong into 2026, with potential risks from competition and inventory levels [51] - The overall sentiment remains positive, with a focus on the long-term benefits of partnerships and technological advancements in production processes [39][41] Conclusion - The semiconductor sector in Greater China is poised for growth, with specific companies like Winbond, Macronix, Powerchip, and GigaDevice expected to perform well. The anticipated pricing power and market dynamics suggest a favorable investment environment, despite potential risks from competition and market fluctuations.