Core Viewpoint - SMIC is positioned as a leading domestic wafer foundry in China, with a focus on both advanced process technology and the expansion of mature processes, benefiting from local demand and geopolitical factors [1][2]. Financial Performance - In Q1 2025, SMIC achieved revenue of $2.247 billion, representing a year-over-year increase of 28.4% and a quarter-over-quarter increase of 1.8% [1]. - The net profit attributable to shareholders was $188 million, showing a significant year-over-year growth of 161.92% [1]. - The gross margin for Q1 2025 was 22.5%, remaining stable compared to the previous quarter and exceeding guidance [1]. Market Position and Strategy - The majority of SMIC's production capacity is focused on mature processes, with advanced processes (≤14nm) accounting for only 1.7% of total capacity, highlighting the strategic importance of advanced nodes for AI infrastructure [1]. - The company is benefiting from local demand for high-end chips, as domestic IC design firms prefer to collaborate with local foundries due to export controls affecting foreign competitors [2]. Product and Revenue Structure - In Q1 2025, 12-inch wafer manufacturing accounted for approximately 78.1% of revenue, while 8-inch wafers made up 21.9% [2]. - The shift towards higher-value products, particularly in advanced processes, is expected to enhance revenue structure and gross margin levels [2]. Industry Trends - The trend of localization in manufacturing is driving growth in mature processes, particularly in the automotive sector, as international suppliers seek partnerships with Chinese foundries [3]. - SMIC is projected to benefit from the "China for China" supply chain strategy, which is expected to accelerate the development of diverse platforms [3]. Future Projections - Revenue forecasts for SMIC are estimated at $9.451 billion, $10.86 billion, and $11.998 billion for the years 2025, 2026, and 2027, respectively, with net profits projected at $743 million, $948 million, and $1.069 billion [3]. - A target price of HKD 63.3 per share has been set based on a 3x PB valuation for 2025, reflecting the company's leading position in advanced process foundry services in mainland China [3].

Core Viewpoint - The partnership between Huaqin Technology and Jinghe Integrated is expected to disrupt the industry chain dynamics, with Huaqin acquiring a 6% stake in Jinghe for 2.393 billion yuan, enhancing collaboration in the semiconductor sector [1][2]. Group 1: Company Overview - Huaqin Technology is a leading global smart product platform company, providing end-to-end services from product development to operational manufacturing, and is a major supplier for well-known domestic and international brands [2][4]. - Jinghe Integrated is a rapidly growing wafer foundry, ranked ninth globally among wafer foundries as of Q1 2025, and is the third-largest in mainland China, following SMIC and Hua Hong [5]. Group 2: Strategic Implications - The share transfer will allow Huaqin to nominate one director to Jinghe's board, indicating a deeper strategic partnership aimed at enhancing market opportunities and customer service [2][3]. - Huaqin's investment is based on confidence in Jinghe's future development and long-term investment value, aiming to integrate resources and enhance competitive positioning within the industry [4].

一个是手机、笔记本、服务器代工巨头，一个是冲进全球前十的晶圆代工新锐。华勤技术 （603296.SH，股价85.78元，市值871.31亿元）市值超870亿元，晶合集成（688249.SH，股价22.23元， 市值445.96亿元）市值约446亿元，两者"牵手"，能否搅动产业链格局？ 华勤技术承诺通过本次协议转让取得的晶合集成股份，以长期投资为目的，自交割日起36个月内不对外 转让。 7月29日晚间，华勤技术、晶合集成双双披露公告称，华勤技术与晶合集成股东力晶创投签署《股权转 让协议》，力晶创投拟将其持有的晶合集成6%股份转让给华勤技术，转让总价款为23.93亿元。本次股 份转让完成后，华勤技术将持有晶合集成6%股份，并将向其提名1名董事。记者注意到，当下，华勤技 术因代工英伟达H20服务器而广受市场追捧。两大巨头"牵手" 据了解，本次权益变动前，力晶创投持有晶合集成19.08%的股份，此次权益变动后，力晶创投将持有 晶合集成13.08%的股份，而华勤技术持有晶合集成6%股份。 封面图片来源：视觉中国-VCG211322973159 目前华勤技术市值大幅超过闻泰科技。截至7月29日收盘，华勤技术市值超870亿 ...

Group 1 - The core viewpoint of the report emphasizes the significant increase in demand for advanced process wafer foundry in the AI era, driven by U.S. sanctions prompting domestic demand to return [1] - The report suggests focusing on two specific segments: advanced process wafer foundry and domestic semiconductor equipment [1] - From the supply perspective, China's advanced process wafer foundry is leading global capacity expansion, indicating a potential breakthrough in orders for domestic semiconductor equipment and components [1] Group 2 - From the demand perspective, advanced processes are expected to remain in short supply, while mature processes are relatively balanced in supply and demand [1] - The report recommends paying attention to the scarce advanced process wafer fabs in China and the leading mature process wafer fabs that can achieve higher market share due to cost efficiency advantages [1]

Group 1: Industry Overview - The domestic wafer foundry's overall capacity utilization rate has improved, benefiting from increased demand in home appliances, automotive, and industrial sectors, which is better than previously expected [1] - The semiconductor manufacturing industry is seen as a cornerstone of the digital economy, with continued improvement in supply and demand expected in the second half of 2025 [1][2] Group 2: Company Performance - In Q1 2025, the company achieved revenue of $2.25 billion, a year-on-year increase of 28% and a quarter-on-quarter increase of 1.8%, with a gross margin of 22.5%, up 8.9 percentage points year-on-year and 2 percentage points quarter-on-quarter [2] - The net profit for Q1 2025 was $190 million, representing a year-on-year increase of 162% and a quarter-on-quarter increase of 75% [2] - The increase in net profit despite only a slight revenue growth is attributed to an 8.8 percentage point year-on-year and 4.1 percentage point quarter-on-quarter increase in capacity utilization, reaching 89.6%, and a reduction in R&D expenses [2] Group 3: Profit Forecast - The company has raised its full-year profit forecast by 7%, expecting net profits of $740 million, $1.01 billion, and $1.28 billion for 2025-2027, representing year-on-year growth of 50%, 37%, and 26% respectively [2] - The earnings per share (EPS) are projected to be $0.09, $0.13, and $0.16 for 2025-2027, with current H-share prices corresponding to price-to-earnings (PE) ratios of 50x, 37x, and 26x respectively [2]

Core Viewpoint - TSMC's second factory in Kumamoto, Japan, is delayed until the first half of 2029 due to weakened orders from major clients and the need for local traffic improvements [1][2][3]. Group 1: Factory Development Timeline - TSMC's first factory in Kumamoto is set to begin production in late 2024, focusing on 12/16nm and 22/28nm chips, with a monthly capacity of approximately 55,000 wafers [1]. - The second factory's construction is postponed to 2025, with production of 6/7nm chips expected to start by the end of 2027, bringing total monthly capacity across both factories to over 100,000 wafers [1][2]. Group 2: Reasons for Delay - The delay in the second factory's timeline is attributed to a lack of urgent demand for advanced processes from Japanese clients, despite government support for AI initiatives [3]. - TSMC's increased investment in Arizona, totaling $165 billion, is prioritized to meet the strong demand for AI chips in the U.S., impacting the urgency of the Kumamoto factory [3]. Group 3: Financial Aspects - The total investment for both Kumamoto factories is approximately 2.96 trillion yen, with the Japanese government providing up to 1.2 trillion yen in subsidies [4].

Core Viewpoint - Changguang Chenshin is seeking to go public in Hong Kong after terminating its IPO on the Sci-Tech Innovation Board earlier this year, focusing on the niche market of industrial and scientific imaging CIS (Camera Image Sensors) [1] Group 1: Company Overview - Changguang Chenshin specializes in CIS, primarily targeting the industrial and scientific imaging sectors, which differ from competitors like OmniVision and STMicroelectronics that focus on consumer-grade CIS [1][2] - In 2024, 66.3% of the company's revenue is projected to come from industrial imaging, while 28.6% will come from scientific imaging [2] Group 2: Market Position - According to Frost & Sullivan, Changguang Chenshin ranks third globally and first in China for industrial imaging CIS revenue in 2024, capturing 15.2% of the global market share [3] - For scientific imaging, the company also ranks third globally and first in China, with a market share of 16.3% [3] Group 3: Market Size - The global CIS market is expected to reach 139.1 billion RMB in 2024, with industrial imaging CIS accounting for only 2% and scientific imaging CIS less than 1% of the total market [4][5] Group 4: Manufacturing Model - Changguang Chenshin operates on a fabless model, relying on third-party foundries like Tower Semiconductor and DB HiTek for wafer production, which allows the company to avoid significant capital expenditures and operational complexities [6][7] - The company has been exploring domestic alternatives to enhance supply chain security and mitigate geopolitical risks, having collaborated with domestic foundries on some projects [8]

Core Viewpoint - The company Lichee Semiconductor reported a significant increase in net losses for Q2 2025, primarily due to the appreciation of the New Taiwan Dollar and foreign exchange losses, with a net loss of NT$33.3 billion and a loss per share of NT$0.8, compared to NT$0.26 in Q1 [1] Group 1 - In Q2, the company shipped approximately 400,000 wafers, a 9% increase from Q1, but the average selling price (ASP) declined by 2% to 3% due to a 5% appreciation of the New Taiwan Dollar, resulting in a revenue growth of only 1.5% in NT dollar terms [1] - The foreign exchange factors significantly impacted profitability, with a foreign exchange loss of NT$15.9 billion in Q2, leading to a net loss increase from NT$11 billion in Q1 to NT$33.3 billion in Q2 [1] Group 2 - The company plans to focus on five operational priorities, including a low visibility outlook for Q3 in the Greater China region, with weak demand for driver ICs and image sensors, while demand for power management ICs (PMICs) related to AI applications remains strong in Europe and the US [1] - Demand for DRAM foundry services has rebounded, driven by major manufacturers exiting the 8G DDR4 market, prompting customers to stock up, with wafer demand fully loaded and ASPs increasing monthly since last month [2] - The SLC Flash product line is seeing a recovery in demand as end customers reduce inventory, with 24nm SLC Flash now in mass production, and the company expects future shipping momentum as major manufacturers gradually exit the SLC market [2] Group 3 - The company is accelerating its 3D AI Foundry and Interposer layout, with small-scale shipments of Interposer starting in Q2, primarily focusing on CoWoS-S, and plans to expand capacity for Interposer production, which is expected to contribute to gross margins over the next two years [2] - The company is also progressing with DRAM four-layer WoW stacking in conjunction with advanced logic process chips, and is developing eight-layer WoW stacking technology with customers, which, along with Interposer, is expected to become a major profit source for the 3D AI Foundry [2] - The development of an 8-inch GaN application for AI servers on a 100V technology platform is nearing completion, with the first batch of customer samples being sent, and trial production expected to start in Q4 this year, following increased inquiries from US and Japanese customers regarding GaN foundry services [2]

Core Viewpoint - The report from Guotai Junan Securities indicates that with the downstream sectors of industrial and automotive industries starting to replenish inventory, the demand for BCD Analog is expected to grow, leading to an increase in wafer foundry capacity utilization in the second quarter and the second half of the year [1] Group 1: Market Recovery and Capacity Utilization - The recovery in market conditions is expected to lead to a slight increase in mature process capacity utilization to over 75% [1] - According to TrendForce, the shipment of end markets such as smartphones, PCs/laptops, and servers is projected to recover with year-on-year growth by 2025, supported by replenishment demand from automotive and industrial sectors after inventory corrections throughout 2024 [1] - In the first quarter, the capacity utilization rates for 8-inch and 12-inch wafers at SMIC showed an overall increase of 4.1%, reaching above 90% [1] Group 2: Capacity Expansion and Local for Local Trend - SMIC is expected to achieve an annual increase of approximately 50,000 12-inch wafer capacity, with capital expenditure for 2025 projected to remain around $7.5 billion, consistent with the previous year [2] - Advanced packaging capacity, led by fab plants, is becoming scarce, as advanced packaging relies on chip manufacturing capabilities that are the strong suit of fab plants rather than traditional packaging and testing factories [2] - The integration of advanced packaging services into fab plants is creating ecological barriers, as high-performance chip design and packaging are becoming increasingly intertwined [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $300 [7][24]. Core Insights - The company reported Q2 2025 revenue of $30.07 billion, exceeding guidance due to strong demand for 3nm and 5nm processes, with a gross margin of 58.6% [1][12]. - The company raised its 2025 revenue growth guidance to approximately 30%, up from nearly 25% previously, and expects capital expenditures to remain between $38 billion and $42 billion [1][14]. - The report highlights the ongoing strong demand for AI and HPC, with HPC revenue increasing by 14% quarter-over-quarter, now accounting for 60% of total revenue [2][12]. Revenue and Profitability - The company expects Q3 2025 revenue to be between $31.8 billion and $33.0 billion, with a gross margin forecast of 55.5% to 57.5% [1][14]. - The revenue forecast for 2025-2027 has been adjusted upward by 1.9%, 1.7%, and 1.1% respectively, while net profit estimates have been adjusted to NT$1,528 billion, NT$1,820 billion, and NT$2,156 billion [5][24]. Capacity and Technology - The company maintains its capital expenditure budget for 2025 at $38 billion to $42 billion, with ongoing production plans for N2 and A16 processes [4][30]. - The report emphasizes the tight supply-demand balance for N3 and N5 nodes, with expectations for increased AI product transitions to N3 in the coming years [31]. Market Position and Valuation - The company is positioned as a leader in semiconductor foundry services, with a projected PE ratio of 25x for 2026, compared to a median of 21x for comparable companies [5][26]. - The target price of $300 reflects a significant increase from the previous target of $227.98, based on the anticipated growth in earnings per share [24][26].