Core Insights - TSMC is shifting its focus towards advanced processes and will gradually outsource some 40-90nm orders to its subsidiary, World Advanced [1][3] - TSMC has announced the suspension of its 6-inch wafer fab in Hsinchu and plans to exit the GaN foundry business within two years, reallocating resources to higher-margin businesses [1][4] Industry Performance - The chemical sector performed well this week, with the Shenwan Chemical Index rising by 3.54%, outperforming the CSI 300 Index by 0.82% [2] - Short-term macro policies are relatively stable, with a focus on three key tracks: growth in terminal industries like robotics and AI, low-valuation cyclical sectors, and actual changes in industry fundamentals such as the lithium battery supply chain [2] Major Events - TSMC's exit from mature processes marks a significant strategic shift, focusing on higher-margin business areas [3][4] - The Dutch government anticipates that Ansem China will soon resume chip supplies, with constructive talks with China [4] - The U.S. government is evaluating military options against Venezuela, including seizing oil fields, leading to a slight increase in WTI crude oil prices [4]

Core Viewpoint - TSMC's recent business adjustments, including exiting specific sectors and consolidating wafer fabs, are strategic moves to adapt to market changes and enhance its competitive position in the semiconductor industry [6]. Group 1: Business Adjustments - TSMC plans to exit the GaN foundry business within two years and close the 6-inch Fab 2 in Hsinchu Science Park, Taiwan [3]. - The company will consolidate three 8-inch fabs (Fab 3, Fab 5, and Fab 8) and redeploy up to 30% of its workforce to the Southern Taiwan Science Park (STSP) and Kaohsiung factories [3][4]. - These adjustments aim to address labor shortages, reduce costs, and optimize asset utilization by reallocating human resources and integrating wafer fabs [3]. Group 2: Advanced Packaging and Technology Development - TSMC is transforming the 6-inch fab into a CoPoS panel-level packaging facility to meet the increasing demands for advanced packaging technologies due to enhanced chip performance [4]. - The company is focusing on developing EUV protective film technology to improve yield and control costs, as EUV lithography is critical for new process nodes [5]. - TSMC has reduced orders for High NA EUV systems and is establishing the 8-inch Fab 3 as an internal R&D center for EUV protective films to decrease reliance on ASML and its supply chain [5]. Group 3: Market Position and Industry Impact - TSMC's strategic adjustments are expected to strengthen its leading position in the semiconductor industry and trigger a chain reaction that promotes higher industry standards [6]. - The shift towards proprietary protective films is anticipated to optimize processes, enhance yield, expand capacity, and lower costs, thereby improving profitability and maintaining TSMC's competitive edge [5].