Core Insights - The report from Counterpoint indicates that advanced process nodes (5/4/3/2nm) will account for nearly 50% of smartphone SoC shipments by 2025, driven by a shift from mature nodes to advanced nodes across various price segments [1][4] - This transition enhances performance and energy efficiency, enabling stronger GenAI capabilities, improved gaming performance, and better thermal management in devices [1] - The revenue from advanced process chips is expected to exceed 80% of total smartphone SoC revenue by 2025, reflecting a rise in semiconductor content and average selling price (ASP) [1][5] Company Insights - Qualcomm is projected to benefit the most from the transition to advanced processes, expected to capture nearly 40% of the shipment share in 2025 with a 28% year-on-year growth, surpassing Apple [4] - MediaTek is also anticipated to see a 69% year-on-year increase in advanced process shipments by 2025, driven by the migration of mid-range products to 5/4nm [4] - TSMC is expected to maintain its leadership in advanced process SoC manufacturing, with a projected 27% year-on-year growth in shipments by 2025, capturing over 75% of the advanced process smartphone SoC shipment share [5] Market Outlook - By 2026, advanced processes are expected to account for 60% of total smartphone SoC shipments, primarily due to the accelerated migration of mid-range models to 5/4nm [5] - The mass production of 2nm processes and the continued ramp-up of 3nm processes will further accelerate the penetration of advanced processes in the market [5]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Insights - The company reported a revenue of 2.88 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 13.42%. The net profit attributable to the parent company was a loss of 327 million yuan, showing a reduction in losses compared to the previous year [2][5]. - In Q3 2025, the company achieved a revenue of 982 million yuan, which is an 11.07% increase year-on-year but a slight decrease of 0.59% quarter-on-quarter. The net profit attributable to the parent company was a loss of 82 million yuan, with improvements in both year-on-year and quarter-on-quarter loss reduction [2][5]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of 2.88 billion yuan, with a year-on-year growth of 13.42%. The net profit attributable to the parent company was a loss of 327 million yuan, indicating a reduction in losses compared to the previous year [2][5]. - In Q3 2025, the company reported a revenue of 982 million yuan, which is an 11.07% increase year-on-year but a 0.59% decrease quarter-on-quarter. The net profit attributable to the parent company was a loss of 82 million yuan, reflecting a year-on-year reduction in losses by 44.5% and a quarter-on-quarter reduction by 33.41% [2][5]. Business Segments - The core business of cellular baseband chips showed significant performance, with revenue growth of 25% year-on-year and a substantial increase in gross profit margin, leading to an overall gross margin improvement of 4.71 percentage points year-on-year and 3.44 percentage points quarter-on-quarter, reaching 26.65% [11]. - The customized chip and IP licensing business experienced a 60% year-on-year decline in revenue due to long project cycles and delayed revenue recognition. However, the backlog of orders increased significantly, indicating strong future growth potential [11]. Market Outlook - The company is expected to see strong growth in its cellular baseband and smartphone SoC segments, with a projected revenue of 3.88 billion yuan in 2025, 5.89 billion yuan in 2026, and 7.56 billion yuan in 2027, corresponding to price-to-sales ratios of 10X, 6X, and 5X respectively [11].

Group 1 - Morgan Stanley upgraded SMIC's rating, raising the target price from HKD 40 to HKD 80, anticipating an expansion in leading edge capacity and resolution of equipment bottlenecks [2] - Chinese mobile announced plans to deploy 100,000 local GPU networks by 2028, leading to an updated revenue forecast for China's AI GPU market, projected to reach RMB 113 billion in 2026 and RMB 180 billion in 2027, with a compound annual growth rate of 62% [2] - The report indicates that while NVIDIA's market share in China is nearly zero, there are still opportunities for local suppliers to fill the gap, particularly in AI high-performance computing and other semiconductor demands [2] Group 2 - The bottleneck in the semiconductor market is not expected to be TSMC's capacity but rather specific memory or server rack components, with TSMC reporting stronger-than-expected AI demand [3] - AI cluster sizes are moving towards over 100,000 GPUs, driving new standards in Ethernet design and liquid cooling for AI racks [3] - The semiconductor supply chain is projected to expand significantly by 2026, with a focus on CPO and NAND module manufacturers [4] Group 3 - Global CoWoS consumption is expected to reach 1,154k wafers in 2026, with NVIDIA holding a 59% market share, and HBM consumption projected at 2.6 billion GB [5] - AI capital expenditures remain strong, with cloud capex expected to reach USD 582 billion in 2026, reflecting a 31% annual growth [5] - AI GPU and ASIC rental prices have seen slight declines, but demand for AI inference in China remains robust, indicating a positive outlook for the AI supply chain [5]

Core Viewpoint - The company reported a revenue increase driven by strong downstream demand, particularly in the IoT and consumer electronics sectors, while also improving profitability through product high-endization [2][3]. Financial Performance - In the first half of 2025, the company achieved a revenue of 1.898 billion yuan, a year-on-year increase of 14.67%, while the net profit attributable to shareholders was a loss of 245 million yuan, showing a significant reduction in losses [1][2]. - The second quarter of 2025 saw a single-quarter revenue of 988 million yuan, reflecting a year-on-year increase of 19.76% and a quarter-on-quarter increase of 8.59% [1][2]. - The overall gross margin for the company's chip products reached 23.96%, an increase of 4.85 percentage points year-on-year [2]. Market Position and Product Development - The company’s cellular baseband chip business saw a sales volume increase of over 50% and revenue growth of over 30% in the first half of 2025, with a gross profit increase of over 60% [3]. - The company successfully entered new markets such as AI toys, smart wearables, and AI glasses, which are expected to support long-term growth [3]. - The company launched the world's first RedCap+Android smart chip platform, currently in the design-in phase, with expected product launches in Q4 2025 [3]. Custom Business and Future Growth - There has been a significant increase in demand for smart wearables, edge AI, and RISC-V chips, leading to a substantial expansion of the ASIC custom service market [4]. - The company has a full order book for ASIC chip design services, with projects covering both design and mass production for leading clients [4]. - Revenue projections for 2025 to 2027 are estimated at 4.438 billion, 6.316 billion, and 8.443 billion yuan, with corresponding price-to-sales ratios of 10X, 7X, and 5X [4].

Core Viewpoint - The global high-end Android smartphone SoC revenue is projected to grow by 34% year-on-year in 2024, driven by strong consumer demand for high-end smartphones and the introduction of more powerful AI platforms [2][5]. Group 1: Market Trends - The high-end Android smartphone SoC segment is expected to account for 52% of total Android smartphone SoC revenue in 2024, indicating a significant market share [6]. - Qualcomm remains the market leader with a year-on-year growth rate of 6%, despite losing some market share to Samsung's Exynos in the Galaxy S24 series [5][6]. - MediaTek's high-end smartphone SoC revenue nearly doubled, attributed to the strong performance of the Dimensity 9300 series and the launch of Dimensity 9400 [5][7]. Group 2: Company Performances - Samsung's high-end smartphone revenue quadrupled in 2024, driven by strong sales of the Galaxy S24, but is expected to decline in 2025 due to the Galaxy S25 series not winning design awards [8]. - HiSilicon has made a strong return in the Chinese high-end market, achieving a revenue share of 12% in 2024, and is expected to maintain its position as the third-largest brand in the Android high-end market by revenue in 2025 [5][8]. - Qualcomm's exclusive partnership with Samsung for the Galaxy S25 series is expected to help it maintain its leading position in the high-end Android SoC market by 2025 [7]. Group 3: Competitive Landscape - The competition in the high-end SoC market is intensifying with the return of HiSilicon and the rise of MediaTek, which has established strategic partnerships with OEMs like vivo and OPPO [6][7]. - Qualcomm's Snapdragon 8 Elite introduces customized Oryon cores, enhancing its position in AI workload management and overall performance [7]. - MediaTek must focus on global flagship brands and developer partnerships to sustain its growth in the high-end SoC market [7].