Core Viewpoint - The ongoing geopolitical tensions between the US and China are significantly impacting TSMC, a leading player in the semiconductor industry, particularly following the US Department of Commerce's revocation of the "Verified End User" (VEU) exemption for TSMC and other companies operating in China [1][2][15] Group 1: Impact of VEU Revocation - The revocation of the VEU exemption will complicate TSMC's supply chain, increasing operational costs and reducing efficiency due to the need for individual export licenses for each shipment [1][4] - TSMC's Nanjing factory, which handles a substantial volume of mature process orders, may face significant disruptions, affecting the supply chains of various international chip manufacturers [8][10] - The US Department of Commerce anticipates an additional 1,000 export license applications annually due to the revocation, highlighting the increased administrative burden on companies [4][10] Group 2: Strategic Positioning of TSMC - TSMC is navigating a delicate balance between maintaining its business interests and managing relationships with both the US and Chinese markets, reflecting a cautious approach in its communications [2][6] - The tightening of US semiconductor export controls is part of a broader strategy to curb China's technological advancements, with TSMC caught in the middle of this geopolitical struggle [6][15] - The company's market capitalization has surged to over $1 trillion, driven by the rising demand for advanced chips, particularly in AI applications, positioning it as a key player in the global tech landscape [4][10] Group 3: Future Outlook - The ongoing policy changes create heightened uncertainty and volatility in the semiconductor sector, compelling companies to adopt a more conservative investment stance [10][12] - The future of TSMC's VEU status and its negotiations with the US government remain uncertain, with potential implications for the global supply chain and the semiconductor industry at large [15][12] - The situation reflects a broader trend of "de-risking" within the global semiconductor supply chain, driven by national security concerns and the quest for technological independence [12][15]

Group 1: AI and Technology - The satellite internet and quantum technology sectors are showing positive performance, with companies in telecommunications, optical communications, and satellite internet expected to experience a new growth phase [1] - The demand for AI continues to grow, particularly as large enterprises like Oracle and Meta increase capital expenditures, indicating strong growth potential for optical modules as foundational components of computing clusters [1] - DeepSeek's next-generation R2 AI model development is facing challenges due to a shortage of Nvidia H20 processors in the Chinese market, impacting the training process of the model [3][2] - The reliance of top Chinese AI companies on American hardware is highlighted by the export restrictions, which poses a significant vulnerability despite DeepSeek's claims of lower resource investment compared to American firms like OpenAI [2] Group 2: Precious and Industrial Metals - The demand for gold remains strong due to U.S. fiscal issues and a weakening dollar credit system, with expectations for gold prices to continue rising [1] - The supply-demand gap for gold is expected to persist throughout the year, with a gradual improvement in fundamentals and a potential downward convergence of the gold-silver ratio, suggesting silver may enter a phase of catch-up [1] - The demand for energy metals is supported by the robust outlook for the electric vehicle and photovoltaic industries, although the supply side remains in an oversupply situation, keeping prices at the bottom range [1] - Economic growth significantly impacts the prices of non-ferrous metals, with manufacturing PMI new orders closely correlating with metal prices, while discrepancies in U.S. manufacturing orders and inventory data indicate potential price uncertainties [3] - Changes in overseas inventory are negatively correlated with metal prices, particularly for tin, copper, lead, and aluminum, suggesting significant impacts from inventory fluctuations [3]