Core Viewpoint - Morgan Stanley believes that the existence of a slightly weaker competitor in the advanced process field may create a false sense of "choice" for customers, which could actually benefit TSMC by reducing ongoing government scrutiny and pressures from policies like "manufacturing return to the U.S." [2][3][7] Group 1: Market Dynamics - TSMC is expected to maintain over 90% market share in the advanced process field, with a "buy" rating and a target price of 1,275 New Taiwan Dollars [3][7]. - The notion of TSMC becoming a monopolist has not significantly increased its price-to-earnings ratio, which remains under pressure from government scrutiny and geopolitical risks [7][8]. Group 2: Intel's Foundry Business - The market may view the participation of major TSMC clients like Apple and Nvidia in Intel's foundry revival as a direct loss of market share for TSMC, but this is not entirely negative [9]. - Intel's foundry business faces fundamental challenges beyond financial issues, including the need for a different corporate culture and customer-centric innovation [11][12]. Group 3: Competitive Landscape - Intel's foundry strategy has historically struggled to gain traction, even when it had a dominant position in the CPU market [11]. - The best chance for Intel's foundry success may lie in adopting an N-1 approach, which could mitigate risks for potential customers and enhance capacity without directly competing with TSMC in advanced processes [12][13].

Core Viewpoint - The threat posed by Intel's foundry business revival to TSMC is overstated, and it may actually benefit TSMC by alleviating regulatory pressures due to its monopoly status [1][3]. Group 1: Intel's Foundry Business - Intel's foundry revival is not purely negative for TSMC, as it may create a competitive environment that reduces regulatory scrutiny [1][5]. - The fundamental challenges facing Intel's foundry business extend beyond financial issues, including the need for a cultural shift towards customer-centric innovation and cost efficiency [1][6]. - Analysts believe that Intel must successfully execute on multiple advanced process nodes to gain credibility in the foundry market, which remains a significant challenge [5][6]. Group 2: TSMC's Market Position - TSMC is expected to maintain over 90% market share in advanced process technology, regardless of Intel's foundry efforts [1][5]. - The perception of TSMC as a potential monopolist has not significantly boosted its price-to-earnings ratio, and may instead attract more scrutiny from government agencies [3][5]. - A slightly weaker competitor in the advanced process space could create a perception of choice for customers, which may ultimately benefit TSMC by reducing regulatory pressures [3][5].

Core Viewpoint - Huahong Semiconductor is planning to acquire a controlling stake in Shanghai Huahong Microelectronics to fulfill its IPO commitment and strengthen its position in the mature process semiconductor market [2][3][4]. Asset Integration - The acquisition aims to resolve the same-industry competition issue that was promised during Huahong Semiconductor's IPO application [3]. - The assets being acquired include those related to 65/55nm and 40nm processes, which are currently in the process of being separated [3][4]. - This move is part of a broader trend of mergers and acquisitions in the domestic semiconductor industry, aimed at optimizing resource allocation and enhancing competitive advantages [4]. Financial Performance - In Q2 2025, Huahong Semiconductor reported a sales revenue of $566 million, an 18.3% year-on-year increase, and a net profit attributable to the parent company of $8 million, up 19.2% year-on-year [7]. - The revenue from mature process technologies (65nm and below) accounted for 22.2% of total revenue, while 90nm and 95nm processes contributed 25.7% [6][8]. Market Dynamics - The semiconductor industry is experiencing a recovery, particularly in the mature process segment, driven by demand from sectors like automotive and industrial electronics [7][9]. - Consumer electronics remain the largest revenue source for Huahong Semiconductor, contributing $357 million in Q2, which is 63.1% of total revenue [8]. Strategic Focus - Huahong Semiconductor continues to focus on mature process technologies and has no immediate plans to delve into advanced process technologies [6][9]. - The company’s strategy allows it to avoid direct competition with major players like TSMC and SMIC, while maintaining a sustainable cash flow due to lower R&D costs compared to advanced process investments [9].

Core Viewpoint - SkyWater Technology's acquisition of Infineon's 200mm wafer fab in Austin, Texas, will quadruple its production capacity, expanding traditional node production from 130nm to 65nm, and is expected to meet the needs of various clients including the U.S. Department of Defense and quantum computing manufacturers [2][4]. Group 1: Acquisition and Capacity Expansion - The acquisition will increase SkyWater's annual wafer production capacity to approximately 400,000 wafers, which is four times its previous capacity [2]. - The deal provides critical processing capabilities, including back-end-of-line (BEOL) technology, essential for connecting various devices on a chip [2]. - SkyWater has signed multiple supply agreements with Infineon, valued at over $1 billion, to produce chips for the next four years [4]. Group 2: Market Dynamics and Strategic Positioning - A significant portion of semiconductor manufacturing capacity has shifted overseas, with 80% to 90% of microcontrollers and embedded electronics produced outside the U.S., primarily in China and Taiwan, creating challenges for U.S. defense and industrial sectors [3]. - The U.S. government is increasingly aware of the need for secure domestic supply chains, as highlighted by ongoing investigations by the Department of Commerce [3]. - SkyWater aims to differentiate itself from larger foundries like TSMC by focusing on technology-as-a-service products, which is gaining attention in the industry [4]. Group 3: Collaboration and Innovation - SkyWater has a long-standing partnership with Google, having developed the first open-source process design kit (PDK) for mixed-signal technology [5]. - The company is positioning itself as a leading foundry for quantum hardware innovation, collaborating with companies like D-Wave and PsiQuantum [5]. - SkyWater's research focuses on superconductors and photonics, working closely with clients to develop custom manufacturing processes that differ from traditional foundry operations [5].

机构：国信证券 研究员：胡剑/胡慧/叶子/张大为 2Q25 营收超指引上限，预计3Q25 营收环比增长。公司2Q25 实现销售收入22.09 亿美元（YoY +16.2%，QoQ -1.7%），高于指引(QoQ -4%至-6%)上限，晶圆收入占总收入的94.6%；毛利率为20.4% (YoY +6.4pct，QoQ -2.1pct)，超指引(18%-20%)上限；归母净利润为1.32 亿美元(YoY -19.5%，QoQ -29.5%)；折旧摊销金额为8.79 亿美元(YoY +10.2%，QoQ +1.5%)。公司预计3Q25 营收环比增长 5%-7%，毛利率为18%-20%。原先公司担心的关税政策是否硬着陆、市场刺激和急建库存是否透支了未 来的需求，以及大宗商品需求是否在新关税引起的价格上涨后衰退，这些目前并没有发生。 二季度产能利用率环比提高2.9pct，创3Q22 以来新高。公司2Q25 付运折合8 英寸晶圆239 万片(YoY +13.2%，QoQ +4.3%)，产能利用率上升至92.5%(YoY+7.3pct，QoQ +2.9pct)，创3Q22 以来新高。在晶 圆收入中12 英寸晶圆贡献76.1 ...

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company achieved a revenue of 3.495 billion yuan in the first half of 2025, representing a year-on-year growth of 21.38%, while the net profit attributable to shareholders was a loss of 170 million yuan, reducing losses by 63.82% [1] - The company has seen significant growth in its four main business areas: automotive, industrial control, consumer electronics, and AI-related applications, contributing to a steady increase in revenue [2] - The transition to a system-level foundry model has enhanced the company's growth potential, allowing it to provide comprehensive chip system services, which has led to a substantial increase in revenue from module packaging [3] - Continuous breakthroughs in product development and market expansion, particularly in the AI sector, have positioned the company favorably for future growth [4] Summary by Sections Financial Performance - In Q2 2025, the company reported a revenue of 1.762 billion yuan, a year-on-year increase of 15.39%, and achieved a net profit of 12 million yuan, marking a return to profitability [1] - The company expects revenues for 2025-2027 to be 8.411 billion yuan, 10.605 billion yuan, and 13.256 billion yuan, respectively, with corresponding net profits of -446.71 million yuan, 662.39 million yuan, and 1.33282 billion yuan [8] Business Segments - Revenue from automotive, industrial control, and consumer electronics grew by 23%, 35%, and 2% respectively in the first half of 2025, with AI-related applications contributing 196 million yuan, accounting for 6% of total revenue [2] - The module packaging business saw a revenue increase of 141%, with automotive power module revenue growing over 200% [3] Market Position and Strategy - The company has successfully transitioned to a system-level foundry model, enhancing its service offerings and market recognition, particularly in automotive and AI sectors [3] - The company is actively expanding its presence in emerging markets, with significant advancements in automotive and data center technologies [4]

Group 1 - The core viewpoint of the report is that Huahong Semiconductor (688347.SH) is rated as a "buy" due to continuous improvement in key operational indicators and significant growth in simulation and power management revenue [2] - The company is leveraging its unique process technology barriers to enhance its competitive foundry capabilities [2] Group 2 - The report highlights the notable revenue growth in simulation and power management sectors as a key driver for the positive rating [2] - The emphasis on building a more competitive foundry capability through distinctive process technology is a strategic focus for the company [2]

Core Viewpoint - SMIC reported better-than-expected Q2 2025 financial results, with sales revenue of $2.209 billion, a slight decrease from the previous quarter, but higher than prior guidance [1][3]. Financial Performance - Q2 2025 sales revenue was $2.209 billion, down 1.7% quarter-over-quarter, with a gross margin of 20.4%, down 2.1 percentage points [1]. - For the first half of 2025, sales revenue reached $4.46 billion, a year-over-year increase of 22%, with a gross margin of 21.4%, up 7.6 percentage points from the same period last year [1]. - Q2 2025 wafer shipments totaled 2.3902 million pieces (equivalent to 8-inch standard logic), representing a 4.3% increase quarter-over-quarter and a 13.2% increase year-over-year [2]. Capacity Utilization - The company's capacity utilization rate for Q2 2025 was 92.5%, an increase of 2.9 percentage points from the previous quarter [1][2]. - Monthly capacity increased from 973,300 pieces in Q1 2025 to 991,300 pieces in Q2 2025, measured in 8-inch standard logic [2]. Market Segmentation - In Q2 2025, revenue by region was distributed as follows: 84.1% from China, 12.9% from the U.S., and 3% from Eurasia, consistent with Q1 2025 figures [1]. - Revenue by application in Q2 2025 was as follows: smartphones (25.2%), computers and tablets (15%), consumer electronics (41%), internet and wearables (8.2%), and industrial and automotive (10.6%) [1]. Future Outlook - For Q3 2025, the company provided revenue guidance of a 5% to 7% increase quarter-over-quarter, with a gross margin forecast of 18% to 20% [3].

Core Viewpoint - SMIC reported a 22% year-on-year increase in sales revenue for the first half of 2025, with a second-quarter capacity utilization rate rising to 92.5% [1][5]. Financial Performance - In Q2 2025, SMIC achieved sales revenue of $2.209 billion, a decrease of 1.7% quarter-on-quarter, but a 16.2% increase year-on-year [2][4]. - The gross margin for Q2 was 20.4%, down 2.1 percentage points from the previous quarter, but up 7.6 percentage points compared to the same period last year [2][5]. - Operating profit for Q2 was $150.677 million, a significant decline of 51.3% from Q1, but a 72.9% increase year-on-year [4]. - The net profit for Q2 was $146.681 million, down 54.6% from Q1 and down 14.9% year-on-year [4]. Capacity and Production - SMIC's monthly capacity increased from 973,300 wafers in Q1 to 991,300 wafers in Q2, measured in 8-inch equivalent logic [6]. - The company shipped 2.3902 million wafers in Q2, representing a 4.3% quarter-on-quarter increase and a 13.2% year-on-year increase [6]. Regional and Application Segmentation - In Q2, the revenue distribution by region was 84.1% from China, 12.9% from the U.S., and 3% from Eurasia, remaining stable compared to Q1 [6]. - By application, the revenue breakdown was 25.2% from smartphones, 15% from computers and tablets, 41% from consumer electronics, 8.2% from IoT and wearables, and 10.6% from industrial and automotive sectors [6]. Market Outlook - The company anticipates a revenue growth of 5% to 7% for Q3 2025, with a gross margin guidance of 18% to 20% [7]. - The CEO noted that while there are new market factors, the fundamental landscape remains stable, and there are positive signals of recovery in various sectors, including industrial and automotive [7].

Group 1 - Samsung has signed a $16.5 billion (approximately 118.4 billion RMB) chip foundry agreement with Tesla, with CEO Elon Musk confirming details and emphasizing personal involvement in improving production efficiency [1][2] - The contract will commence on July 26, 2024, and last until December 31, 2033, representing 7.6% of Samsung's projected 2024 revenue of 300.9 trillion KRW (approximately 1.56 trillion RMB) [1] - The global foundry market is currently dominated by TSMC, which holds over 60% market share, while Samsung and Intel follow closely behind [1][5] Group 2 - The long-term supply agreement is expected to boost Samsung's struggling foundry business, which reported a 0.09% year-on-year decline in sales and a 55.94% drop in operating profit in Q2 2025 [4] - Following the announcement, Samsung's stock price increased by 9%, contributing to a more than 20% rise in July, potentially marking its best monthly performance in over four years [4] - Analysts believe that the collaboration with Tesla could enhance Samsung's manufacturing efficiency and improve its bargaining power in the foundry market [2][5] Group 3 - The AI6 chip, expected to enter mass production in 2027 using Samsung's 2nm (SF2) process, currently has a yield rate of 40%-45%, which is lower than TSMC's N2 process yield of over 70% [3] - Tesla has been focusing on autonomous driving technology, with chips being crucial for its development; Samsung currently produces the AI4 chip for Tesla's FSD system [3] - The global semiconductor foundry industry is projected to reach $165 billion in revenue by 2025, with a compound annual growth rate of 12% from 2021 to 2025, driven by advanced process nodes [6]