Group 1 - The trend of "local for local" manufacturing is strengthening, with wafer foundry demand returning to domestic sources. In Q1 2025, UMC's market share was 4.7%, down from 7% in Q1 2021, while SMIC's market share increased from 5% in Q1 2021 to 6% in Q1 2025. UMC primarily focuses on mature processes, with 53% of its production in 40nm and below nodes, and a capacity utilization rate of 69% in Q1 2025, up from 85.5% in Q4 2024 [1][2] - UMC's average selling price (ASP) in Q1 2025 was 71.12 million yuan per wafer, which is relatively low compared to previous quarters. The company expects ASP to return to a healthy long-term trend after the impact of special events in the first quarter subsides [1] Group 2 - The downstream market is experiencing a mild recovery, driven by policies such as trade-in programs and consumer subsidies, leading to increased demand for bulk products. The industrial and automotive supply chains are replenishing inventory, with strong demand for BCD processes, MCUs, and special memory products, particularly in the automotive electronics sector [2] - The company is increasing its 12-inch wafer capacity by approximately 50,000 pieces annually, maintaining steady growth. The demand for logic chips in leading industries is growing rapidly, with high technical requirements across chip design, foundry, and packaging processes. Domestic companies still lag behind overseas giants, but leading industries are expected to drive continuous iteration of process nodes [2] - As a leading wafer foundry in mainland China, the company is benefiting significantly from the trend of localized manufacturing. Revenue projections for 2025-2027 are 67.503 billion, 77.408 billion, and 90.180 billion yuan, with net profits of 5.070 billion, 6.075 billion, and 7.092 billion yuan respectively [2]