Core Viewpoint - Intel is striving to become a global leader in wafer foundry services, focusing on its 18A process technology as a core part of its strategy amid increasing competition in the 2nm chip market [1][2]. Group 1: Investment and Financial Performance - Over the past four years, Intel has invested more than $90 billion in capital expenditures to expand its wafer foundry business and close the gap with TSMC and Samsung [1]. - Intel's wafer foundry division incurred a loss of nearly $13 billion last year, and the company's stock price has dropped nearly 50% since its peak in 2024 [1]. Group 2: Technological Advancements - Intel's new 18A process, currently in risk production, is expected to enhance performance and energy efficiency through innovations like RibbonFET transistors and PowerVia backside power delivery [2]. - The transition to smaller process nodes, such as 2nm, is costly and complex, with initial yields typically low [1]. Group 3: Competitive Landscape - TSMC holds over two-thirds of the global wafer foundry market share and is expected to maintain a significant lead in 2nm technology, with plans to start mass production in the second half of 2025 [3]. - TSMC's 2nm process is projected to improve performance by 10% to 15% and reduce power consumption by up to 30% compared to the 3nm node, with a current yield rate of 60% [3]. - In contrast, Intel's yield for the 18A process is estimated to be only 20% to 30%, while Samsung's competing technology has a yield of 40% [3]. Group 4: Customer Dynamics - TSMC has a large and loyal customer base, including major clients like Apple and AMD, who have committed to using its 2nm technology [4]. - Intel is diversifying its strategy by considering TSMC as an alternative supplier for its upcoming Nova Lake desktop processors, expected to launch in 2026 [4]. Group 5: Challenges Ahead - Despite claims that the 18A process will offer higher performance and lower power consumption compared to TSMC's nodes, Intel faces challenges in density and cost advantages [5]. - Intel has experienced delays in launching new nodes, with some external customers withdrawing after initial trial production, leading to lower-than-expected demand [5].

Group 1: TSMC (Taiwan Semiconductor Manufacturing Company) - TSMC's advanced process advantages are expanding, with a buy rating initiated and a target price of $225, indicating a potential upside of 27.5% from the closing price of $176.52 [1] - The product and supply-demand cycles are favorable for stable revenue growth, with new product pricing breaking the previous trend of decline post-launch, enhancing TSMC's bargaining power with semiconductor design clients [1][2] - TSMC is expected to start mass production of 2nm technology in the second half of 2025, which will further strengthen its technological advantages over previous 3nm processes [2] Group 2: Hua Hong Semiconductor - Hua Hong Semiconductor's Q1 2025 performance met guidance, with the ninth factory starting production and adding 10,000 pieces of monthly capacity [3] - The company expects Q2 2025 revenue to be between $550 million and $570 million, with a gross margin guidance of 7%-9%, reflecting a decrease from previous expectations due to increased depreciation pressure during capacity ramp-up [3][6] - Management is focused on accelerating capacity ramp-up and controlling costs to mitigate the impact of depreciation on gross margins [3] Group 3: Automotive Industry - In April 2025, the retail sales of passenger cars in China reached 1.755 million units, a year-on-year increase of 14.5%, with domestic brands outperforming the overall market [7] - New energy vehicle (NEV) retail sales recorded 905,000 units in April, with a penetration rate of 51.5%, indicating strong growth compared to the previous year [7][8] - The report anticipates stable growth in the automotive market for May 2025, with a focus on the performance of new energy vehicle exports, which are expected to maintain high growth rates [8]