Group 1: Semiconductor Price Increases - The global semiconductor industry is experiencing a new wave of price increases, with TSMC's 2nm process prices rising at least 50% compared to the 3nm process, and the last generation 3nm CPU prices increasing by approximately 20% [1] - TSMC's latest 2nm process is set to begin mass production this quarter, but due to high capital expenditures, the company has no discount or negotiation strategy in place [1] - The flagship chips using the 2nm process are expected to have a unit price of around $280 [1] Group 2: Memory Chip Price Adjustments - Samsung has significantly raised prices for memory and flash products, with DRAM prices increasing by up to 30% and NAND flash prices rising by 5-10% due to supply constraints and surging demand from cloud enterprises [4] - Micron and SanDisk have also announced similar price increases, with Micron's prices rising by 20-30% and the company halting new orders [4] - The current price surge reflects the deep impact of AI applications on the semiconductor supply chain, with data center construction driving up storage procurement volumes [4] Group 3: Competitive Landscape - Apple has increased its reservation share for TSMC's 2nm capacity from nearly 50% to over 50%, contributing 22% of TSMC's revenue in 2024, amounting to $19.4 billion [2] - Qualcomm and MediaTek plan to launch their first 2nm chip products by the end of 2026, but Apple's capacity monopolization strategy may create supply constraints for these competitors [3] - This concentration of capacity allocation is likely to widen the technology gap between Apple and the Android ecosystem [3]

Group 1 - TSMC's 2nm process pricing has increased by at least 50% compared to the 3nm process, with the last generation 3nm CPU prices rising by approximately 20% [1][2] - TSMC's latest 2nm process is set to begin mass production this quarter, but due to high capital expenditures, the company is not offering discounts or negotiation strategies [1][2] - The flagship chips using the 2nm process are expected to have a unit price of around $280 [1] Group 2 - Samsung has significantly raised prices for memory and flash products, with DRAM prices increasing by up to 30%, and NAND flash prices rising by 5-10% due to supply constraints and surging demand from cloud enterprises [5][6] - Micron and SanDisk have also announced similar price increases, with Micron's prices rising by 20-30% and halting new orders [5] - The current price surge reflects the deep impact of AI applications on the semiconductor supply chain, with data center construction driving up storage procurement [6] Group 3 - Apple has increased its reservation share for TSMC's 2nm capacity from nearly 50% to over 50%, contributing 22% of TSMC's revenue in 2024, amounting to $19.4 billion [2] - Qualcomm and MediaTek plan to launch their first 2nm chip products by the end of 2026, but Apple's capacity monopolization may create supply constraints for these competitors [3]

Market Overview - The initial value of the September Markit manufacturing and services PMI in the U.S. showed a decline but remained in the expansion zone, with easing price pressures, leading to a muted market reaction [1] - Following comments from Federal Reserve Chairman Jerome Powell regarding high equity valuations, major U.S. stock indices experienced a decline, with the S&P 500 down 0.6%, the Dow Jones down 0.2%, and the Nasdaq down 1% [3][6] Federal Reserve Commentary - Powell's remarks served as a public warning about current market valuations, impacting investor sentiment and shifting it from exuberance to tension [4] - He emphasized the need to monitor inflation and employment data without making any clear commitments regarding policy actions for October, indicating a cautious approach [4] Technology Sector Impact - Interest-sensitive technology stocks were hit hardest, with the index of the seven major tech companies declining; Amazon fell by 3.04%, Nvidia by 2.82%, and Tesla by 1.93% [5] Semiconductor Industry Insights - Micron Technology reported strong earnings, with Q4 revenue reaching $11.3 billion, exceeding market expectations of $11.2 billion, and earnings per share of $3.03, surpassing analyst predictions of $2.84 [8][10] - The demand for memory chips, driven by AI, is expected to keep supply tight into next year, with Micron's CEO highlighting the company's competitive product portfolio and unique position as the only domestic memory manufacturer [9] - Micron is also leading in HBM (High Bandwidth Memory) chips, with significant agreements in place for HBM3e chips and plans to introduce HBM4 chips, addressing market concerns about profit margins [12] Pricing Trends in Semiconductor Industry - The semiconductor industry is experiencing a price surge, with Micron's performance reflecting broader trends across the supply chain, driven by AI demand [13] - Advanced chip prices are rising, with TSMC indicating a 50% increase in 2nm process pricing compared to 3nm, and Apple securing a 50% share of TSMC's 2nm capacity [15] - Major competitors like Samsung and SK Hynix have also raised prices for memory and flash products, with DRAM prices increasing by up to 30% [15]

Core Viewpoint - The semiconductor industry is experiencing a new wave of price increases driven by TSMC's pricing strategy for its 2nm process and rising prices from major memory chip manufacturers like Samsung and SK Hynix, leading to accelerated semiconductor inflation [3][4][6]. Group 1: TSMC's Pricing Strategy - TSMC's 2nm process pricing has increased by at least 50% compared to the 3nm process, with flagship chips potentially priced at $280 [3][4]. - The company maintains a strong pricing strategy due to high capital expenditures associated with advanced processes, despite achieving initial yield targets [4]. - Apple has increased its reservation share for TSMC's 2nm capacity from nearly 50% to over 50%, contributing 22% of TSMC's revenue in 2024, amounting to $19.4 billion [4][5]. Group 2: Memory Chip Price Increases - Samsung has raised prices for DRAM products by up to 30% and NAND flash prices by 5-10% due to supply constraints and surging demand from cloud enterprises [6]. - Micron and SanDisk have also announced similar price increases, with Micron's prices rising by 20-30% and halting new orders [6]. - The demand for memory and storage driven by AI data centers has led to extended delivery times from one month to over six months for various products [6][7]. Group 3: Impact of AI on Semiconductor Industry - The current price surge reflects the profound impact of AI applications on the semiconductor supply chain, with data center construction driving up memory procurement volumes [7].

Group 1: Semiconductor Price Increases - The global semiconductor industry is experiencing a new wave of price increases, with TSMC's 2nm process prices rising at least 50% compared to the 3nm process, and the last generation 3nm CPU prices increasing by approximately 20% [1] - TSMC's latest 2nm process is set to begin mass production this quarter, but due to high capital expenditures, the company has no discount or negotiation strategy in place [1] - The flagship chips using the 2nm process are expected to have a unit price of around $280 [1] Group 2: Memory Chip Price Adjustments - Samsung has significantly raised prices for memory and flash products, with DRAM prices increasing by up to 30% and NAND flash prices rising by 5-10% due to supply constraints and surging demand from cloud enterprises [4] - Micron and SanDisk have also announced similar price increases, with Micron's prices rising by 20-30% and the company halting new orders [4] - The demand for memory and storage driven by AI data centers has led to extended delivery times from one month to over six months for various products from major manufacturers [4] Group 3: Competitive Landscape - TSMC's pricing strategy reflects its strong market position, with Apple increasing its reservation share for TSMC's 2nm capacity to over 50%, contributing 22% of TSMC's revenue in 2024, amounting to $19.4 billion [2] - Qualcomm and MediaTek plan to launch their first 2nm chip products by the end of 2026, but Apple's capacity control strategy may create supply constraints for these competitors, widening the technology gap between Apple and the Android camp [3]

Core Viewpoint - The semiconductor industry is engaged in a continuous and evolving competition, particularly focused on the advancement of process nodes, with the 2nm node being the latest battleground that will reshape the industry's landscape [2][19]. Foundry Competition - The competition among foundries is characterized by the need to secure advanced process orders by being the first to achieve mass production, with the risk of falling back to price wars for those lagging behind [2][3]. - TSMC is recognized as the leader in advanced processes, having established a stronghold since the 7nm node and is now focusing on the 2nm node, which is expected to significantly enhance performance and reduce power consumption [3][4]. - Samsung aims to reclaim its position by introducing its 2nm process earlier than TSMC, despite facing challenges with yield issues in previous nodes [6][8]. - Intel is attempting to regain its competitive edge with its IDM 2.0 strategy, planning to launch its 2nm process by the end of 2025, leveraging new technologies like RibbonFET and PowerVia [8][9]. Emerging Players - Rapidus, a new entrant backed by the Japanese government, aims to focus on advanced processes rather than competing on scale, with plans to start 2nm trial production in 2025 [10][11]. Fabless Companies Dynamics - Fabless companies are cautious about adopting new technologies due to high costs, but many are shifting towards more aggressive strategies to maintain competitiveness in the rapidly evolving market [11][12]. - Apple is positioned as a key player, securing early access to TSMC's 2nm capacity for its upcoming products, which is crucial for its AI strategy [12][13]. - Qualcomm is aligning with TSMC for its 2nm process to maintain competitiveness in the Android ecosystem, while AMD plans to utilize TSMC's 2nm for its high-performance computing products [14][15]. - NVIDIA is strategically waiting for stable yields before committing to 2nm, focusing on maximizing performance and efficiency for AI applications [16][17]. - MediaTek is also planning to adopt 2nm technology for its flagship products, aiming to enhance its market position against competitors [17][18]. Industry Outlook - The 2nm node is seen as a critical juncture that will determine the future landscape of the semiconductor industry, with companies racing to achieve stable production to secure their market positions [19][20].

Investment Rating - The report upgrades the industry investment rating to "Recommended" [1] Core Insights - The semiconductor industry faces reduced visibility in the second half of 2025 due to tariff uncertainties, while the storage market shows positive trends in Q2 [1][3] - AI hardware demand remains strong, driven by cloud service providers and government sectors, suggesting a focus on leading companies in the AI hardware segment such as NVIDIA and TSMC [1][3] Semiconductor Sector - IC Design: In April 2025, MediaTek reported revenue of NT$48.8 billion, a month-on-month decrease of 12.9% but a year-on-year increase of 16.0%. The company noted uncertainty due to tariffs [3][11] - IC Manufacturing: TSMC achieved record revenue of NT$349.6 billion in April 2025, with a month-on-month increase of 22.2% and a year-on-year increase of 48.1% [3][14] - IC Testing: ASE Technology's revenue in April 2025 was NT$52.2 billion, a month-on-month decrease of 2.9% but a year-on-year increase of 13.9% [3][22] PC/Server Sector - The PC market is affected by tariff uncertainties, with companies like Hon Hai reporting April revenue of NT$641.4 billion, a month-on-month increase of 16.2% and a year-on-year increase of 25.5% [3][25] - Quanta's April revenue was NT$154 billion, a month-on-month decrease of 20.0% but a year-on-year increase of 58.2% [3][25] PCB Sector - The PCB manufacturing sector saw overall revenue increase by 5.6% month-on-month and 18.6% year-on-year in April 2025, driven by demand for AI servers and high-end networking [3][27] - Zhen Ding's revenue reached NT$13.6 billion in April, a year-on-year increase of 22.9% [3][27] Optical Components Sector - The optical components sector is experiencing a traditional off-season, with Largan Precision reporting April revenue of NT$4.4 billion, a month-on-month decrease of 10.6% but a year-on-year increase of 26.5% [3][28] Storage Sector - The storage market is showing positive signs, with companies like Nanya Technology reporting a month-on-month revenue increase of 13.3% in April 2025 [3][4] - DRAM prices are expected to rise, with TrendForce adjusting its Q2 price forecast from -5% to +8% [3][4]

Core Viewpoint - Apple is significantly increasing its orders for 2nm process chips from TSMC, potentially contributing up to NT$1 trillion (approximately RMB 239.7 billion) in revenue this year, representing a year-on-year growth of over 60% [2]. Group 1: Apple and TSMC Relationship - Apple has placed substantial orders for 2nm chips with TSMC, with expected revenue contribution rising to NT$800 billion to NT$1 trillion this year [2]. - The revenue forecast for 2024 from Apple to TSMC was initially estimated at NT$624.3 billion (approximately RMB 149.64 billion) [2]. - The ability to reach the NT$1 trillion target depends on the ramp-up of production capacity at TSMC's new facility in Arizona and the 2nm capacity in Taiwan [2]. Group 2: Future Plans and Innovations - Apple CEO Tim Cook announced plans to procure over 19 billion chips across multiple states in the U.S. for the fiscal year 2025, including millions of advanced process chips produced in Arizona [2]. - Since the launch of the Apple Silicon initiative, Apple's computer product line has fully adopted its self-designed M-series chips, all manufactured by TSMC [2]. - Rumors suggest that Apple's upcoming M5 chip will utilize TSMC's N3P process, with pre-orders for the first batch of 2nm and even more advanced A16 process capacity [2]. Group 3: Cost Savings and New Technologies - The recent teardown of the iPhone 16e revealed that it is the first model to use Apple's self-developed 5G modem chip, which is based on TSMC's 5nm N4P process, resulting in a cost saving of $10 per device [2].