Core Viewpoint - The company reported a strong performance in Q3 2025, with revenue reaching $635 million, a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2%, driven by increased wafer shipments and ASP improvements [2][22][23]. Financial Performance - Revenue for Q3 2025 was $635 million, surpassing guidance expectations, with a gross margin of 13.5%, exceeding the upper limit of guidance [2][22]. - The net profit attributable to shareholders was $25.7 million, a decrease of 42.6% year-on-year but an increase of 223.5% quarter-on-quarter [23][24]. - Operating expenses were $100.4 million, up 23.3% year-on-year, primarily due to increased wafer engineering costs and depreciation [23]. Capacity and Utilization - The company’s 8-inch capacity was 468,000 wafers per month by the end of Q3 2025, with a utilization rate of 109.5% [2][3]. - The ASP for wafers was $453.7, reflecting a year-on-year increase of 3.5% and a quarter-on-quarter increase of 4.6% [2][3]. Embedded Storage and Product Demand - Revenue from the embedded non-volatile storage platform was $160 million, a year-on-year increase of 20.4% and a quarter-on-quarter increase of 13.1%, driven by demand for MCUs and storage [3][25]. - Power discrete devices generated $169 million in revenue, up 3.5% year-on-year, driven by products like super junctions [3][25]. Guidance and Future Outlook - The company guided for Q4 2025 revenue of $650-660 million, representing a year-on-year increase of 21.5% and a quarter-on-quarter increase of 3.1% [3][28]. - The market outlook for 2026 is optimistic, with expectations for continued growth and potential price increases [3][39]. Strategic Initiatives - The company is progressing with an acquisition expected to close in August 2026, which is anticipated to add $600-700 million in revenue [3][44]. - Capital expenditures for 2025 are projected to be approximately $1.2 billion, with ongoing investments in capacity expansion [3][37][38]. Regional Performance - Revenue from the Chinese market was $522.6 million, accounting for 82.3% of total revenue, with a year-on-year growth of 20.3% [24]. - North American revenue reached $63.8 million, a year-on-year increase of 36.7%, driven by demand for power management ICs and MCUs [24]. Product Segmentation - The revenue breakdown for Q3 2025 included $407.5 million from consumer electronics, $137.9 million from industrial and automotive sectors, and $79.8 million from communications [20][24]. - The embedded non-volatile memory segment saw significant growth, with revenue of $159.7 million, primarily due to increased MCU demand [25]. Market Trends - The company is positioned to benefit from the ongoing semiconductor market recovery, with expectations for sustained demand driven by AI and other emerging technologies [3][33][40]. - The power device segment faces competitive pressures, but the company is implementing strategies to maintain its market position [3][34].

Investment Rating - The report maintains a "Recommended" rating for the industry, indicating a positive outlook for the sector's fundamentals and expected performance exceeding the benchmark index [5]. Core Insights - The company reported a revenue of $635 million for Q3 2025, reflecting a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2%, surpassing the guidance midpoint [1][28]. - Gross margin for Q3 2025 was 13.5%, exceeding the upper limit of the guidance range, driven by increased capacity utilization and average selling price (ASP) improvements [1][29]. - The company expects Q4 2025 revenue to be between $650 million and $660 million, with a year-on-year growth forecast of 21.5% [3][36]. - The semiconductor market is anticipated to continue growing into 2026, with expectations of improved pricing and market conditions compared to 2025 [3][47]. Summary by Sections Financial Performance - Q3 2025 revenue reached $635 million, a historical high, with a gross margin of 13.5%, up 1.3 percentage points year-on-year [29]. - Net profit attributable to shareholders was $25.7 million, down 42.6% year-on-year but up 223.5% quarter-on-quarter [30]. - Operating expenses were $100.4 million, reflecting a 23.3% increase year-on-year due to rising wafer costs and depreciation [29]. Capacity and Production - The company’s 8-inch wafer capacity was 468,000 pieces per month, with a utilization rate of 109.5% [1][29]. - The company is expanding its production capacity, with plans to increase Fab 9A's capacity to approximately 65,000 pieces per month by mid-next year [3][46]. Market Demand and Product Segments - Embedded non-volatile memory platform revenue was $160 million, up 20.4% year-on-year, driven by increased demand for microcontrollers (MCUs) [2][32]. - Power discrete devices revenue was $169 million, reflecting a 3.5% year-on-year increase, primarily due to demand for super junction products [2][32]. - The company is focusing on enhancing its product mix, particularly in NOR Flash and power management platforms, to improve overall profitability [40][48]. Strategic Initiatives - The company is progressing with an acquisition expected to add $600 million to $700 million in revenue, with the deal anticipated to close by August next year [3][53]. - The company is actively pursuing strategic capacity planning and technology advancements to strengthen its competitive position in the semiconductor industry [28][40].

Financial Data and Key Metrics Changes - Sales revenue for Q1 2025 was $541 million, a 17.6% increase year-over-year and a 0.3% increase quarter-over-quarter [5][8] - Gross margin was 9.2%, up 2.8 percentage points year-over-year but down 2.2 percentage points quarter-over-quarter [9] - Net loss for the period was $52.2 million, compared to a loss of $25.3 million in Q1 2024 and a loss of $96.3 million in Q4 2024 [11] - Basic earnings per share was $0.20, compared to $0.19 in Q1 2024 and a loss of $1.5 cents in Q4 2024 [11] Business Line Data and Key Metrics Changes - Revenue from embedded non-volatile memory was $130.3 million, a 9.3% increase year-over-year [13] - Revenue from standalone non-volatile memory was $42.9 million, a 38% increase year-over-year [13] - Revenue from Power Discrete was $162.8 million, a 13.5% increase year-over-year [13] - Revenue from analog and power management IC was $136.8 million, a 34.8% increase year-over-year [13] Market Data and Key Metrics Changes - Revenue from China was $442.5 million, contributing 81.8% of total revenue, a 21% increase year-over-year [12] - Revenue from North America was $56.4 million, a 22% increase year-over-year [12] - Revenue from Europe decreased by 30% year-over-year to $15.2 million [12] - Revenue from Japan decreased by 62.1% year-over-year to $1 million [12] Company Strategy and Development Direction - The company plans to accelerate effective capacity expansion, enhance R&D capabilities, and manage supply chain disturbances while reducing costs and improving efficiency [6][7] - The company aims to optimize its product portfolio and maintain full capacity utilization [6] Management Comments on Operating Environment and Future Outlook - Management noted that the semiconductor industry faces greater uncertainties due to recent global changes and policies affecting customer demand and procurement costs [6] - The company expects revenue for Q2 2025 to be in the range of $550 million to $570 million, with a projected gross margin of 7% to 9% [16] Other Important Information - Capital expenditures in Q1 2025 were $510.9 million, with significant investments in manufacturing [14] - Cash and cash equivalents decreased to $4.08 billion as of March 31, 2025, from $4.46 billion at the end of 2024 [15] Q&A Session Summary Question: Impact of new tariffs on customers - Management indicated that the recent tariffs have not had a meaningful impact on the business, as most customers are domestic design houses [20][22] Question: Growth in analog and PMIC sales - Management noted that the analog and PMIC platforms are growing due to competitive offerings and increasing domestic demand [24][28] Question: Price increase possibilities - Management stated that while there is pricing pressure on 8-inch wafers, 12-inch prices are gradually increasing, and customer acceptance of price increases is expected as demand exceeds supply [35][36] Question: Outlook for the second half of the year - Management expects a gradual recovery in demand, with consumer segments remaining weaker compared to industrial segments [49][50] Question: Competition and pricing strategies - Management acknowledged the competitive landscape but emphasized the company's technological advantages and ability to meet customer needs [58][60] Question: Equipment procurement and tariff impact - Management reported minimal impact from tariffs on equipment procurement, as most manufacturing occurs outside the U.S. [74][76] Question: Demand cycle for power devices - Management expressed confidence in the power device segment, citing strong competition but also a solid technological foundation [78][80] Question: Gross margin trends - Management indicated that gross margin pressures are expected due to new capacity ramp-up but remains optimistic about future improvements [96][102] Question: Embedded NOR flash platform performance - Management acknowledged the need for improved offerings in embedded NOR flash and expects growth as new technologies are introduced [104][106]