July 6, 2025 10:11 PM GMT Greater China Semiconductors | Asia Pacific China WFE outlook remains strong in 2H25 and 1H26 We remain positive on China's wafer fab equipment (WFE) market, thanks to better-than-expected logic foundry demand in 2H25 and ongoing share gains driven by localization demand. We expect a robust 2H25 for China WFE: After our Asia Semi trip (Semiconductors: Takeaways from Taiwan/Beijing (30 Jun 2025), European Semiconductors: Our takes from Taiwan (1 Jul 2025)), we now foresee much stron ...

Core Viewpoint - The Chinese semiconductor industry has undergone significant development from 2000 to 2021, driven by the collaboration of national, corporate, and financial forces, culminating in a complex landscape shaped by globalization and subsequent challenges from geopolitical tensions [2][57]. Group 1: Historical Development - From 2000 to 2012, the Chinese semiconductor industry entered its "root and sprout" phase, establishing an initial industrial chain [1]. - The year 2014 marked a pivotal moment with the establishment of the National Integrated Circuit Industry Investment Fund, which provided essential financial support for the industry [4][6]. - Between 2014 and 2017, this financial influx accelerated the growth of Chinese semiconductor companies through mergers, acquisitions, and investments, integrating them into the global supply chain [1][5]. Group 2: Financial Forces - The emergence of various financial institutions, such as Zhilu Capital and Wuyuefeng Capital, provided market-oriented investment capabilities, enhancing the ability to acquire overseas semiconductor firms [8][10]. - Notable acquisitions included the purchase of Rui Neng Semiconductor for 800 million RMB, which significantly advanced China's position in the power semiconductor sector [9]. - The establishment of the Zhongguancun Rongxin Industrial Alliance in 2015 facilitated collaboration among various investment institutions, enhancing the success rate of overseas acquisitions [22]. Group 3: Corporate Forces - Major corporations like Unisoc and Changjiang Electronics have expanded their influence through strategic acquisitions, such as Unisoc's purchase of RDA Microelectronics for 910 million USD, enhancing its capabilities in mobile communication chips [13][31]. - The collaboration between large enterprises and national funds has enabled significant mergers, such as Changjiang Electronics' acquisition of STATS ChipPAC for 780 million USD, positioning it among the top semiconductor packaging and testing companies globally [11][13]. - The rapid growth of these companies has contributed to the establishment of a competitive landscape in the semiconductor industry, with firms like Unisoc becoming a leading player in the global market [13][31]. Group 4: Challenges and Adjustments - The period from 2018 to 2020 saw increasing challenges due to U.S. sanctions and trade tensions, which hindered the ability of Chinese companies to pursue overseas acquisitions [39][46]. - The establishment of the second phase of the National Integrated Circuit Industry Investment Fund in 2019 aimed to strengthen domestic capabilities and support key sectors like IC design and AI [47][48]. - By 2021, the focus shifted towards restructuring and preparing for a new phase of development, as the global landscape for semiconductor investments became increasingly restrictive [56][54]. Group 5: Future Outlook - The Chinese semiconductor industry is entering a phase of self-reliance and independence, with a focus on enhancing domestic capabilities and reducing reliance on foreign technology [57]. - The collaboration among national, corporate, and financial forces is expected to continue driving innovation and growth in the sector, despite external pressures [57].

东方证券表示，政策不确定性风险持续，有望促使供应链各环节继续推进国产化，利好半导体设备、材 料、EDA等领域公司。国内晶圆制造厂和存储器厂商为保障供应链安全与产能建设节奏，将更有动力 并加大力度采购国产化产品。这不仅体现在成熟制程产能的持续扩张上，更将逐步向先进制程的关键环 节渗透。对设备厂商而言，关键半导体制造环节的国产验证与导入机会将显著增多。 兴业证券表示，AI板块的投资价值在当前科技创新密集活跃的背景下尤为凸显。与此同时，鸿蒙智能 体、Agentic AI等创新应用集中爆发，亚马逊云科技预计智能体技术已处于爆发前夜，华为首批50+鸿 蒙智能体即将上线，推动交互方式从指令驱动转向意图驱动。Meta、谷歌等巨头加速布局ASIC芯片， 2025年预计出货量超百万颗，算力成本两年下降280倍，为AI规模化部署创造条件。这些进展共同表 明，AI技术已进入商业化落地加速期，从教育硬件到云计算基础设施的产业链各环节均呈现强劲增长 动能，为投资者提供了从技术突破到业绩兑现的完整价值链条。 （本文机构观点来自持牌证券机构，不构成任何投资建议，亦不代表平台观点，请投资人独立判断和决 策。） （文章来源：21世纪经济报道） ...

China OSAT halfway through recovery — The OSAT industry is on track to its sixth quarter of YoY growth with inventory well under control. While the current cycle shows only modest growth so far, we expect the growth recovery to continue with demand rising from: 1) industrial/automotive; and 2) advanced packaging (AP) for HPC and power semis. The past OSAT growth cycles since 2001 each lasted 3-7 years. We believe the OSAT industry is still only halfway through the recovery phase. Capacity UTR still improvin ...

核心观点 投资建议与投资标的 美商务部拟取消在中国运营的芯片制造商的技术豁免权，或将削弱海外公司利用中国大 陆资源的优势，改变存储全球供应链格局，建议关注国内半导体产业链： 风险提示 电子行业 行业研究 | 动态跟踪 美拟收紧半导体技术豁免，利好本土产业 链 ⚫ 国际政治经济形势变动风险；半导体景气度不及预期；半导体国产化进度不及预 期。 国家/地区 中国 行业 电子行业 报告发布日期 2025 年 06 月 23 日 看好（维持） | 薛宏伟 | xuehongwei@orientsec.com.cn | | --- | --- | | | 执业证书编号：S0860524110001 | | 蒯剑 | 021-63325888*8514 | | | kuaijian@orientsec.com.cn | | | 执业证书编号：S0860514050005 | | | 香港证监会牌照：BPT856 | | 韩潇锐 | hanxiaorui@orientsec.com.cn | | | 执业证书编号：S0860523080004 | 朱茜 zhuqian@orientsec.com.cn | 部分存储涨价，AI ...

Core Insights - Arm Holdings (ARM) faces increasing risks of slower growth in China due to the country's shift towards RISC-V architecture, which contributed 19% of ARM's total sales in fiscal 2025, with revenues from China rising only 7.5% year over year [1][7] Group 1: Market Dynamics - China's ambition to localize its semiconductor ecosystem is driving the promotion of RISC-V as an alternative to Arm's proprietary models, offering cost advantages and design flexibility [2] - Major Chinese tech firms, including Alibaba Cloud, Huawei, Tencent, and ZTE, are backing RISC-V, which raises competitive pressure on ARM's presence in China [3][7] Group 2: Competitive Landscape - NVIDIA and AMD are closely monitoring China's shift to RISC-V, as it poses a threat to their market positions in AI hardware and server chips [4][5] - AMD's EPYC server chips directly compete with China's new Lingyu RISC-V server chip, indicating potential market share erosion for AMD if RISC-V adoption accelerates [5] Group 3: Financial Performance - ARM's stock has gained 18% year to date, outperforming the industry's 5% rally, but it trades at a forward price-to-sales ratio of 31.5, significantly higher than the industry's 8.1 [6][8] - The Zacks Consensus Estimate for ARM's earnings has been declining over the past 60 days, reflecting potential challenges ahead [10]

14 June 2025 | 12:16AM HKT China semis: XDLK (688582.SS, Not Covered): MEMS gyroscope and accelerometer on growing client adoption; expanding to new We talked with XDLK (688582.SS, Not Covered) management recently. The company provides MEMS IMU (Inertial Measurement Unit) including MEMS gyroscope and MEMS accelerometer for industrial, energy, and innovative applications (autonomous driving, eVTOL, robotics etc.). The company delivered 1Q25 revenue growth of 292% YoY, driven by new MEMS gyroscope orders, and ...

10 June 2025 | 11:03AM HKT China Semis: Longsys (301308.SZ): Memory module supplier expanding to enterprise market; Controller IC to ramp up in 2025E We talked to Longsys (301308.SZ, Not Covered) management recently. Longsys is memory module supplier and provides embedded memory, SSD, DRAM modules for consumer, automotive and enterprise clients. Overall, management is positive on company's expansion to enterprise market, driven by rising demand on storage solution with high bandwidth and low latency, with r ...

Investment Rating - The report upgrades ACMR to Buy and identifies NAURA as the most preferred stock in the China wafer fabrication equipment (WFE) sector [4][7]. Core Viewpoints - The market has significantly underestimated the resilience of China WFE demand, forecasting a modest decline of 9.5% YoY in 2025, followed by a growth of 6.0% YoY in 2026, contrasting with the consensus expectation of a 20% decline [4][19][20]. - The report highlights that over 70% of survey respondents expect higher or flat capacity expansion in 2025, indicating stronger demand than previously anticipated [5][19]. - The top three Chinese vendors are expected to increase their market share to 25-30% by 2027, driven by localization and tighter US export controls [6][60]. Summary by Sections Market Demand Forecast - China WFE demand is projected to reach US$33.5 billion in 2025, reflecting a 9.5% YoY decline, and US$35.5 billion in 2026, indicating a 6.0% YoY increase [20][24]. - Domestic fabs' capacity expansion is identified as a major driver for sustained demand, with a projected CAGR of 9.0% from 2023 to 2027 [20][24]. Vendor Performance and Market Share - The combined revenue of the top three Chinese WFE suppliers is expected to reach US$10.8 billion by 2027, representing a significant increase in domestic market share from 13% in 2024 [60][61]. - The report emphasizes the narrowing technology gap and increasing willingness of domestic fabs to procure local equipment as key factors for market share gains [66][67]. Investment Dynamics - The report notes that 35% of foundry respondents and 29% of memory respondents indicated plans for higher capital expenditures in 2025, suggesting a positive outlook for the sector [28][41]. - The analysis of semiconductor production equipment imports indicates strong demand in Guangdong, which has not been fully reflected in prior forecasts [5][54]. Competitive Landscape - The report outlines that Chinese WFE companies have achieved higher revenue growth compared to the industry average, with a CAGR of 41%-82% from 2020 to 2024 [67][71]. - Tighter export controls are expected to expand the total addressable market for local vendors, as US companies face limitations in accessing the Chinese market [73][76].

Investment Rating - The report maintains a positive outlook on selected Chinese semiconductor companies, particularly those focused on consumer electronics and mature semiconductor localization [1][4]. Core Insights - The US and China have announced a 90-day pause on tariffs, reducing US tariffs on Chinese imports from 145% to 30% and Chinese tariffs on US imports from 125% to 10%, which is viewed as a slight positive for the Chinese semiconductor sector [1][2]. - The tariff reprieve is expected to reduce demand uncertainties for consumer electronics in the second half of 2025, benefiting companies like Silan and CR Micro [1][3]. - China's commitment to suspend rare-earth export controls may negatively impact investor sentiment towards RF front-end vendors such as Maxscend, which were previously seen as beneficiaries due to their access to rare earth materials [3][4]. - The report emphasizes that China's mature semiconductor localization efforts will continue, with companies like SG Micro and Will Semi positioned to benefit from this trend amid supply uncertainties [4][5]. Summary by Sections - **Tariff Impact**: The 90-day tariff pause is expected to lower tariffs significantly, which could positively influence demand for consumer electronics and related semiconductor manufacturers [1][2]. - **Company Performance**: Companies with higher exposure to consumer electronics, such as Silan and CR Micro, are likely to benefit from the tariff changes, while RF front-end vendors may face challenges due to changes in rare-earth material export controls [3][4]. - **Localization Trends**: The report highlights the ongoing trend of semiconductor localization in China, with a focus on mature semiconductor technologies, indicating a robust market for companies like SG Micro and Will Semi [4][5]. - **Future Monitoring**: Upcoming events to watch include the US Section 232 investigation and potential new AI export restrictions, which could impact the semiconductor industry [5].