Core Viewpoint - Black Sesame Intelligence International Holdings Limited (stock code: 2533.HK) plans to acquire an AI chip company through equity acquisition and capital injection, focusing on high-performance, low-power AI system-on-chip (SoC) solutions [1] Group 1 - The target company specializes in the development and sales of AI SoC solutions, with a significant portion of its intellectual property (IP) being self-developed, including image signal processors (ISP), neural network processors (NPU), and analog IP [1] - The acquisition aims to expand Black Sesame's product line across high, medium, and low-end computing chips, enhancing its capabilities in providing comprehensive solutions for smart vehicles and robots [1] - Black Sesame has established partnerships with several automotive companies, such as Geely, Dongfeng, and BYD, and is accelerating its expansion into the robotics chip market [1] Group 2 - The target company is expected to meet specific criteria, including a high self-research rate of core IP, achieving high-performance AI inference within a power range of 20W-50W, and obtaining AEC-Q100 Grade 1 certification [2] - It should occupy a technological advantage in areas like autonomous driving perception and have technical reserves for robotics and industrial automation applications [2] - The company should have experience in advanced process manufacturing below 7nm and stable foundry resources, with its toolchain and algorithm library compatible with Black Sesame's existing platform [2]

Investment Rating - The report assigns a neutral investment rating to the company, indicating expectations of performance within a range of -10% to +10% relative to the benchmark index over the next six months [52]. Core Insights - The company reported Q1 2025 revenue of NT$578.6 billion, a quarter-over-quarter decrease of 4.2% but a year-over-year increase of 5.9%. The gross margin was 26.7%, down 3.7 percentage points from the previous quarter [2][3][8]. - The company expects wafer shipments to increase by 5%-7% in Q2 2025, with gross margins projected to recover to around 30% and capacity utilization returning to approximately 70% [4][20]. - Demand in the consumer electronics sector showed strong growth in Q1 2025, with expectations for moderate rebounds in various downstream demands in Q2 2025 [21]. Summary by Sections 1. Company Q1 2025 Overall Performance - **Revenue and Shipment**: The company achieved consolidated revenue of NT$578.6 billion in Q1 2025, with wafer shipments remaining stable compared to the previous quarter and a 12% increase year-over-year [3][8]. - **Gross Margin**: The gross margin for Q1 2025 was 26.7%, impacted by a decrease in average selling prices and disruptions due to a recent earthquake [8][11]. - **Capacity Situation**: Capacity was affected by an earthquake and annual maintenance, but is expected to normalize in Q2 2025 [11]. 2. Company Q2 2025 Guidance - **Performance Guidance**: The company anticipates a 5%-7% increase in wafer shipments for Q2 2025, with stable ASP and a recovery in gross margin to about 30% [20]. - **Demand Outlook**: Strong growth in consumer electronics is expected to continue, while other sectors may experience fluctuations [21]. 3. Revenue Structure - **By Region**: In Q1 2025, revenue from Asia accounted for 66%, North America 22%, Europe 7%, and Japan 5% [12][13]. - **By Application**: The consumer sector contributed 34% to revenue, while communication and computer sectors remained relatively stable [16][17]. - **By Process Technology**: Revenue from 22nm and 28nm processes reached 37%, with a significant increase in demand for 22nm products expected in the coming quarters [18][19].