Core Viewpoint - Goldman Sachs has raised the target price for Huahong Semiconductor (01347) by 13% to HKD 87, reflecting a forecasted price-to-earnings ratio of 51.5 times for 2028, up from 45.7 times, indicating a positive outlook for the company due to its shift towards 40nm/28nm processes and capacity expansion [1][2] Group 1 - Goldman Sachs maintains its earnings forecast for Huahong from 2025 to 2027 but has slightly increased the net profit estimates for 2028 and 2029 by 0.2% and 0.6% respectively, reflecting a more optimistic long-term growth outlook [2] - The firm has slightly raised its revenue forecasts for Huahong for 2028 and 2029, anticipating that Chinese policies and fund support will drive growth for downstream customers and local equipment suppliers, benefiting the company's revenue and gross margin [2] - The gross margin forecast for Huahong in 2029 has been increased by 0.1 percentage points, reflecting a slightly more optimistic view on capacity utilization [2] Group 2 - The China Integrated Circuit Industry Investment Fund's third phase, with a scale of USD 47 billion, aims to comprehensively support the development of the Chinese semiconductor industry, covering the entire industry chain from design to manufacturing, materials, and equipment [2] - The recent investment by the third phase fund in Piotech Jianke, a subsidiary of Tuojing Technology, highlights the support for the semiconductor supply chain from mainland policies, which is beneficial for strengthening the overall industry ecosystem [2]

Semiconductor Industry Research Summary Industry Overview - The semiconductor industry exhibits a decreasing profitability trend across its value chain, with IC design being the most profitable, followed by wafer manufacturing, and equipment and materials being relatively lower in profitability [1][4] - The semiconductor manufacturing process is divided into front-end (80% value) and back-end processes (20% value), with front-end processes including diffusion, thin film deposition, lithography, and etching, while back-end processes involve wafer packaging [1][5] - The global semiconductor equipment market is approximately $100 billion, characterized by cyclical growth that fluctuates with semiconductor demand [1][10] Key Trends and Developments - The transition from 2D to 3D chip structures is increasing transistor density and complexity, driving capital expenditure [1][8] - Advanced processes significantly increase equipment demand, with capital expenditure density rising sharply; for instance, the capital expenditure for 7nm process is about $1.2 billion per 10,000 wafers, while for 5nm it reaches $8.3 billion per 5,000 wafers [9][11] - The semiconductor industry is highly concentrated, with the top five companies holding nearly 80% of the market share, including ASML, Applied Materials, Lam Research, Tokyo Electron, and KLA [13][15] Market Dynamics - The demand for semiconductor equipment is expected to remain robust, with China’s semiconductor equipment procurement projected to exceed $40 billion in 2025 and 2026 [3][18] - The domestic semiconductor equipment companies in China are benefiting from increased demand for self-sufficiency, with a low domestic production rate in lithography machines (below 5%) but higher rates in materials [3][19][16] - The semiconductor materials market is valued at over $60 billion, with wafer manufacturing materials accounting for approximately $42.9 billion and packaging materials around $24.6 billion [20] Investment Opportunities - The semiconductor materials sector offers advantages due to its continuous and cumulative demand, which is less affected by cyclical fluctuations compared to equipment manufacturing [21] - The current phase of expansion and increased self-sufficiency in the domestic semiconductor industry presents significant investment opportunities, particularly in advanced processes [22] - Despite some market segments being overheated, semiconductor equipment and materials remain undervalued, indicating a potential growth of about 30% from a valuation perspective [22]

SEMICON China 2025 展会的参会人数创历史新高，第一天较去年增加了 10%， 达到 8 万人，三天总参会人数接近 20 万。展会上有几个主要感受：首先是 AI 相关需求的显著增长。3M 主席居总在开幕式上提到，到 2030 年全球半导体市 场规模将达到 1 万亿美元，其中 75%以上的需求与 AI 相关。其次是国产化率的 快速上升，美国出口管制政策推动了中国工厂大规模使用国产设备和材料，从 • AI 驱动半导体增长：预计到 2030 年，全球半导体市场规模将达 1 万亿美 元，其中 75%以上需求与 AI 相关，涵盖算力芯片、端侧基带芯片及工业半 导体等，预示 AI 应用将显著推动技术进步和市场扩张。 • 国产化率提升影响：美国出口管制促使中国工厂大规模采用国产设备和材 料，从试用转向商用，尤其在先进封装和多次曝光等领域，中国设备商与 晶圆厂协同研发取得进展，提升了中国在全球市场的竞争力。 • 全球资本开支动态：2025 年全球资本开支预计增长 8%，中芯国际和台积电 上调资本开支，三星略微下调，中国市场基本持平。中国受益于外部依赖 减少和国产设备大规模采用，设备商收入显著增长。 • 美国实体 ...