Investment Rating - The industry investment rating is "Outperform the Market," indicating that the industry index is expected to perform better than the market by more than 5% over the next six months [41]. Core Insights - The SEMICON China 2026 international semiconductor exhibition held in Shanghai showcased the outstanding performance of the Chinese smart glasses market, with a projected shipment volume of 2.46 million units in 2025, reflecting a year-on-year growth of 87.1% [3][9]. - The global smart glasses market is expected to reach a shipment volume of 14.77 million units in 2025, with a year-on-year growth of 44.2% [9]. - The exhibition attracted over 1500 global exhibitors and is expected to draw more than 180,000 professional visitors, highlighting the industry's robust growth potential [19]. Summary by Sections Market Performance - The Philadelphia Semiconductor Index and the Taiwan Semiconductor Index both experienced declines, with the Philadelphia index at 7457.7 and a weekly drop of 0.03%, while the Taiwan index was at 1082.1 with a drop of 1.93% [4][25]. - The Shenwan Semiconductor Index fell by 2.09%, underperforming the CSI 300 Index by 0.68 percentage points, although it has risen by 2.97% since the beginning of 2026, outperforming the CSI 300 by 5.72 percentage points [29]. Investment Recommendations - The report suggests focusing on companies such as Northern Huachuang, Zhongwei Company, Tuojing Technology, and others, as the storage industry is expected to see significant profit improvements due to ongoing AI infrastructure investments [6][36]. - The report emphasizes that the current storage cycle's strength and sustainability are likely to exceed the previous cycle, driven by rising demand and pricing for storage products [6]. Key Company Forecasts and Ratings - Northern Huachuang (002371) is rated as "Recommended" with an expected EPS growth from 7.76 in 2024 to 16.94 in 2027, and a PE ratio decreasing from 58.4 to 26.7 [37]. - Zhongwei Company (688012) is also rated "Recommended," with an EPS forecast increasing from 2.58 in 2024 to 6.20 in 2027, and a PE ratio decreasing from 118.4 to 49.3 [37]. - Other companies such as Tuo Jing Technology and Huahai Qingke are similarly rated, indicating strong growth potential in the semiconductor sector [37].

Consumption Sector - In January-February 2026, the total retail sales of consumer goods reached 86,079 billion yuan, with a year-on-year growth of 2.8%, the highest increase since October 2025[6] - The retail sales of essential goods, such as tobacco and alcohol, grew by 19.1%, significantly higher than the overall retail sales growth[11] - Automotive retail sales saw a decline of 7.3% year-on-year, marking five consecutive months of negative growth, primarily due to the impact of the Spring Festival holiday and policy adjustments[12] Health Sector - On March 13, 2026, the National Medical Products Administration approved the registration of the first invasive brain-machine interface medical device, marking a significant milestone in clinical applications[14] - The domestic brain-machine interface market is projected to grow, with a forecasted market size of 3.83 billion yuan in 2025, reflecting a year-on-year growth of 20%[20] Hard Technology Sector - The global wafer foundry industry is expected to generate approximately 169.5 billion USD in revenue in 2025, a year-on-year increase of 26.3%[25] - TSMC's revenue is projected to reach 122.54 billion USD in 2025, with a year-on-year growth of 36.1%, increasing its market share from 64.4% to 69.9%[26] High-end Manufacturing Sector - In February 2026, a total of 17,226 excavators were sold, a year-on-year decrease of 10.6%, with domestic sales down by 42%[32] - For January-February 2026, total excavator sales reached 35,934 units, showing a year-on-year growth of 13.1%, driven by strong export performance[32]

Core Viewpoint - The semiconductor industry is experiencing a new wave of price increases, particularly among the four major mature process foundries: UMC, GlobalFoundries, Powerchip, and China’s JHICC, with price hikes expected to start as early as April, potentially exceeding 10% [2][3] Group 1: Price Increases - The four major mature process foundries are planning to raise their prices, indicating a broader trend of "chip inflation" in the semiconductor industry [2] - UMC holds a global market share of approximately 4.2% in wafer foundry services and has acknowledged a more favorable pricing environment compared to previous periods [2] - GlobalFoundries has communicated to customers about the need to adjust prices starting April 2026 due to rising costs in semiconductor equipment, raw materials, energy, and labor [2][3] Group 2: Impact on IC Design Firms - IC design firms, particularly those producing driver ICs, are expected to pass on the increased costs to consumers, as wafer foundry prices constitute a significant portion of their total costs [3] - Powerchip has confirmed that it has already begun raising prices this quarter, focusing on product lines with lower profit margins [3] - JHICC is also set to increase its foundry prices by 10% starting June 1, indicating a collective trend among mature process foundries to raise prices [3]

Core Viewpoint - The semiconductor industry is experiencing a significant supply-demand structural reversal, leading to a seller's market, particularly in mature process nodes, as evidenced by World Advanced's announcement to raise foundry prices starting April 2026 [2][5]. Group 1: Supply-Demand Dynamics - A structural shortage in mature process nodes is becoming the norm due to strategic exits by leading foundries from 8-inch and 6-inch production lines, with TSMC and Samsung shifting focus to 12-inch and advanced processes [2]. - The global 8-inch wafer foundry market is projected to experience a rare negative growth of 2.4% in 2026, indicating a tightening supply for mature processes in the next 1-2 years [3]. - The demand for mature processes is surging due to the rapid growth of AI server data centers, which require upgraded power management architectures, thus increasing the demand for power management ICs and components [3]. Group 2: Price Adjustments and Industry Responses - World Advanced has decided to raise its foundry prices to reflect rising costs and ensure healthy operations, starting from April 2026, amidst increasing operational costs due to inflation and supply chain pressures [4][5]. - Hefei Jinghe Integrated Circuit (Nexchip) announced a 10% price increase for its foundry services effective June 1, 2026, citing rising production costs and external market challenges [7][10]. - Major chip manufacturers like Texas Instruments, NXP, and Infineon are also raising prices for certain products starting April 1, reflecting ongoing cost pressures and a shift in pricing dynamics from demand-driven to cost-driven [13][14].

Market Overview - The Shanghai Composite Index increased by 0.47%, while the Shenzhen Component Index decreased by 0.20%, the ChiNext Index fell by 0.49%, the STAR Market 50 dropped by 1.56%, and the Beijing Stock Exchange 50 declined by 3.99% [1] - The TMT sector led the gains with SW Communication Cables and Accessories up by 3.80%, SW Communication Network Equipment and Devices up by 3.47%, and SW Military Electronics III up by 2.69% [1] - Conversely, the TMT sector also saw declines, with SW Marketing Agency down by 5.23%, SW Communication Application Value-Added Services down by 5.01%, and SW Film and Animation Production down by 4.51% [1] Domestic News - New Tang Technology announced a price adjustment for its wafer foundry business, effective April 1, 2026, with an overall adjustment of approximately 20% to maintain supply stability and deepen long-term customer relationships [2] - MediaTek invested approximately $90 million (around 619.7 million RMB) to acquire a 2.4% stake in US silicon photonics company Ayar Labs, which is backed by major players like NVIDIA, AMD, and Intel [2] - Crystal Tech's 12-inch silicon carbide (SiC) crystal growth furnace successfully passed on-site acceptance testing, demonstrating good repeatability and reliability, ready for mass production [2] - The first domestic 8-inch diamond heat sink production line was officially launched by Huanghe Xuanfeng's subsidiary, with a total investment of 1.2 billion RMB, capable of producing 20,000 pieces annually [2] Overseas News - AOI received its fourth 800G mass production order from a major hyperscale customer to support AI data center growth, with expectations for 400G business to remain strong [3] - TrendForce forecasts that global sales of new energy vehicles (BEV, PHEV, and hydrogen fuel cell vehicles) will reach 20.53 million units in 2025, a 26% year-on-year increase, with a projected 14% growth to 23.4 million units in 2026 [3] - Rohm announced the integration of its GaN power device technology with TSMC's process technology to enhance supply capabilities for AI servers and electric vehicles [3] - Gartner predicts that PC manufacturers will have to raise prices due to rising memory costs, leading consumers to delay purchases and extend the lifespan of personal computers by 20% by the end of the year [3] AI Insights - Tsinghua and Stanford teams proposed the VLAW framework, achieving bidirectional iterative optimization of VLA strategies and action condition world models, significantly reducing false positive rates [4] - OpenRouter data shows that from February 9 to 15, the model call volume in China reached 4.12 trillion tokens, surpassing the US's 2.94 trillion tokens, with further increases noted in the following week [4] - SaaS leader Jushuitan integrated the Qwen large model into its intelligent ERP system, introducing features that have helped e-commerce merchants save over 90% on model invitation and shooting costs [4] - Domestic AI made significant breakthroughs in vulnerability detection, surpassing Claude by identifying 10 additional 0-day vulnerabilities [4] Industry Tracking - Star River Dynamics announced a new rocket patent that allows for automatic attitude adjustment during rocket segment docking, improving efficiency and precision [5] - Swedish scientists proposed the "giant super-atom" theory, which could reduce reliance on complex external measurement and control circuits for quantum networks and sensors [5] - Faraday Future announced the delivery of its EAI robots to a high-end Airbnb operator in the US, marking a significant step in its robotics deployment [5] - Anhui Haoyuan Chemical's project for an annual production of 30,000 tons of hexamethylenediamine has been approved, which includes new production facilities [5]

Core Viewpoint - The company has adopted a Fabless business model, focusing on optimizing wafer foundry costs while expanding its supply chain both domestically and internationally to meet diverse customer needs [1] Group 1: Business Model and Strategy - The company emphasizes that wafer foundry costs are a significant component of product costs and aims to select foundries that can help mitigate the impact of fluctuations in precious metal prices [1] - The company has completed a dual supply chain layout, both overseas and domestically, to better serve different customer demands [1] Group 2: Legal and Market Position - The company received a preliminary ruling in the US 337 litigation in January 2026, determining that it did not infringe on Skyworks' intellectual property, which has boosted confidence among overseas clients for increased collaboration [1] - Several overseas clients have expressed intentions to restart or enhance cooperation with the company, indicating a positive market response [1] Group 3: Financial Outlook - The company aims to leverage international expansion to secure greater gross margin and improve overall profitability [1]

Core Viewpoint - TSMC has announced a record employee bonus plan for 2025, reflecting strong financial performance driven by robust demand in the AI hardware sector [2][4][5] Financial Performance - TSMC's total employee bonuses and compensation for 2025 amount to approximately NT$206.15 billion, with half of this to be distributed in July [4] - The average bonus per employee is estimated at NT$2.64 million, an increase of NT$634,400 or 31.58% from the previous year [4] - TSMC's total revenue for 2025 reached NT$3.81 trillion, a year-on-year growth of 31.6%, while net profit was NT$1.72 trillion, up 46.4% [4] - In Q4 2025, TSMC reported a net profit of NT$505.7 billion, a 35% increase year-on-year, with consolidated revenue of NT$1.46 trillion, growing 20.5% [4] Market Position and Outlook - TSMC's profitability exceeded market expectations, indicating a strong penetration of advanced process nodes in high-margin products [5] - The company's move to establish manufacturing facilities in the U.S. has drawn attention, with discussions around transferring 40% of Taiwan's semiconductor capacity to the U.S. [5]

Core Viewpoint - The company reported a revenue of approximately NT$40.12 billion for January 2026, representing an increase of about 18.37% compared to NT$33.89 billion in January 2025, despite a month-over-month decrease of approximately 18.62% due to reduced wafer shipments [1] Group 1: Financial Performance - The company anticipates wafer shipments to increase by approximately 1% to 3% quarter-over-quarter in Q1 2026, with average selling prices expected to decrease by 3% to 5% [1] - The gross margin is projected to be between 28% and 30% for the same period [1] - The company has maintained a cash dividend of NT$4.5 per share for the fifth consecutive year, totaling approximately NT$84.03 billion in cash dividends [2] Group 2: Market and Production Insights - The company is experiencing strong demand for AI applications, leading to increased semiconductor demand, particularly in mature processes [1] - The company is advancing in the establishment of its 12-inch factory in Singapore, with over 200 machines expected to be introduced, aiming for initial sampling in 2026 and mass production in Q1 2027 [2] - The company has announced a second wave of price increases for foundry services, ranging from 10% to 15%, due to capacity constraints [1]

Core Viewpoint - Samsung's semiconductor foundry business, which has been in a state of loss since 2022, is expected to turn profitable next year due to increased demand and operational improvements [1][3]. Group 1: Financial Performance and Projections - Samsung's foundry business recorded a loss of approximately 7 trillion Korean won in the previous year, but is projected to achieve profitability in the coming year as production scales up for Tesla's AI chips [1][3]. - The company aims to accelerate order acquisition with a target of achieving profitability next year, as the yield rates for advanced processes below 3nm stabilize and the utilization rates for 4-8nm processes approach full capacity [3]. Group 2: Strategic Developments - Samsung is investing over $37 billion in a new wafer fabrication plant in Taylor, Texas, which is expected to significantly enhance its foundry capabilities and support the production of chips for major tech companies [3]. - The successful ramp-up of production at the Taylor facility is crucial for improving Samsung's profitability, particularly with the anticipated production of Tesla's AI chips [3]. Group 3: Competitive Landscape - TSMC currently holds about 70% of the foundry market share, but its production lines are nearing full capacity, creating opportunities for Samsung to capture additional orders [4]. - As demand for advanced processes concentrates at TSMC, some large clients are considering Samsung as an alternative, especially in light of the "Made in America" policy [4]. - Samsung's improved operational efficiency in the 4-8nm process range is expected to enhance its competitive position against TSMC, as this process offers stable yield rates and competitive pricing [4].

Core Viewpoint - TSMC's stock price experienced significant fluctuations, ultimately reaching a new high of NT$1780, with a market capitalization exceeding NT$46 trillion, driven by strong demand in the AI market [1] Group 1: Financial Performance - TSMC's first-quarter operational performance is expected to remain robust despite seasonal trends, with a projected 4% increase in USD revenue quarter-over-quarter [1] - The company anticipates nearly 30% growth in USD revenue by 2026, indicating strong long-term growth prospects [1] Group 2: Capital Expenditure and Market Conditions - TSMC plans to continue aggressive investment in capacity expansion, with capital expenditures projected between USD 52 billion and USD 56 billion [1] - The ongoing shortage and price increases in memory and PCB sectors are expected to further benefit TSMC's market position [1] Group 3: Market Impact - The overall Taiwanese stock market rose by 230.59 points, closing at a historical high of 31639.29 points, with a trading value of NT$799.3 billion, reflecting positive investor sentiment [1]