Core Viewpoint - The RTX 5090 series is experiencing high demand and prices, while facing supply constraints and regulatory challenges in the Chinese market [5] Group 1: Market Demand and Supply - NVIDIA has ceased production of the RTX 4090 and shifted focus to the RTX 5090 series to meet strong market demand [1] - The overall manufacturing capacity is limited, and even a 25% increase in production may not fully satisfy demand, leading to a persistent supply shortage and high premiums in the market [1] - The market price for the RTX 5090 in Hong Kong is approximately 35,000 RMB, while prices in mainland China have seen a slight decline but remain high due to strong demand [1] Group 2: RTX 5090D Model and Pricing - The RTX 5090D model, specifically launched for the Chinese market, targets internet companies, with channel prices around 15,000 RMB and potential further declines to about 14,000 RMB [2] - For large AI clients, the average procurement price is around 15,000 RMB, but strong negotiators may secure prices as low as 10,000 RMB per chip [2] - NVIDIA has set a minimum suggested retail price (SRP) to maintain market order, prohibiting sales below this price [2] Group 3: Regulatory Challenges and Product Adjustments - The RTX 5090D has been classified as a non-compliant product due to exceeding the U.S. export control bandwidth limit, leading NVIDIA to suspend shipments to mainland China [3] - NVIDIA is exploring solutions to modify the 5090D and H20 models to comply with regulations, including reducing memory clock frequency [3] - The suspension of 5090D supply is expected to have a limited short-term impact on the domestic market, as prior procurement volumes were not substantial [3] Group 4: Supply Chain and Manufacturer Impact - Global manufacturers like ASUS, MSI, and Gigabyte benefit from the current high-price environment, while local firms like Colorful face more limited profit margins [4] - Major tech companies in China, such as Alibaba and Tencent, primarily acquire computing power through direct purchases from NVIDIA or by sourcing consumer-grade graphics cards [4] - NVIDIA intentionally limits the supply of the 5090 chip to prevent it from being widely used in data centers, thereby protecting the sales strategy and market share of its higher-margin professional AI computing cards [4]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the semiconductor industry, focusing on TSMC (Taiwan Semiconductor Manufacturing Company) and memory companies such as Samsung, SK Hynix, and Micron Technology. Core Insights and Arguments 1. **Revenue Impact on TSMC**: - Estimated revenue loss for TSMC due to restrictions on H20 and B20 chips is negligible, around 1% [2] - The order-to-delivery time for AI chips is 7-8 months, allowing TSMC to book revenue regardless of future restrictions [2] - TSMC's AI revenue target for the year remains largely unaffected as it does not account for AI demand from China beyond 2025 [2] 2. **Samsung's Operating Profit Loss**: - Samsung's operating profit loss is estimated to be no more than 2-3%, which translates to 3-4% of its DRAM operating profits [3] - The impact may be marginal for competitors like SK Hynix and Micron if they also supply HBM chips [3] 3. **DRAM Wafer Capacity and Demand**: - The release of DRAM wafer capacity due to restrictions is minimal, estimated at ~1% of the industry total [4] - Concerns about lower demand for mainstream DRAM in AI servers are expected to be offset by demand from domestic AI processors in China [4] - Overall, while the restrictions negatively impact mainstream DRAM prices, the effect is smaller compared to potential impacts from high tariffs [4] 4. **Price Stabilization Forecast**: - Memory prices are expected to stabilize or inflect positively by 2QCY25, despite the temporary rush shipments to the US due to exemptions on electronic products [4] Investment Ratings and Price Targets 1. **TSMC**: Rated Outperform with a target price of NT$1,430 [6] 2. **Samsung**: Rated Outperform with a target price of KRW 82,000 [6] 3. **SK Hynix**: Rated Outperform with a target price of KRW 240,000 [7] 4. **Micron**: Rated Outperform with a target price of US$120 [8] Additional Important Information - The report includes detailed estimates on the impact of export restrictions on HBM demand and DRAM wafer capacity, highlighting the potential revenue and operational impacts on major players in the semiconductor industry [9] - The analysis emphasizes that while immediate impacts are manageable, long-term effects depend on geopolitical developments and market dynamics [4][9]