Core Viewpoint - TSMC is advancing its 2nm production with plans for four factories to operate at full capacity, despite high costs for customers due to increased pricing per wafer [2] Group 1: 2nm Production Progress - TSMC is set to have four 2nm factories operational next year, with a total monthly output of 60,000 wafers [2] - The current yield rate for 2nm in the trial production phase has reached 60%, indicating readiness for stable mass production [2] - Major clients like Apple, Qualcomm, and MediaTek are expected to be the first to adopt the new technology [2] Group 2: Cost Implications - The price per wafer for the 2nm process is projected to be around $30,000, which is 50% higher than the 3nm process [2] - To help clients manage costs, TSMC has initiated a shared trial production service called "CyberShuttle," allowing multiple clients to share a single test wafer for design validation [2] Group 3: Competitive Landscape - There is potential pricing pressure on TSMC if competitors like Samsung successfully launch their first 2nm GAA architecture chip, Exynos 2600, with improved yield rates [2]

Core Viewpoint - Samsung Electronics is revamping its Exynos application processor (AP) architecture to address long-standing performance and heat issues, with the upcoming Exynos 2600 expected to incorporate a new Heat Pass Block (HPB) component for improved thermal management [1][3]. Group 1: Exynos 2600 Development - The Exynos 2600 will utilize a 2nm process technology, which is more refined than the 3nm process used in its predecessor, the Exynos 2500 [1][3]. - The introduction of HPB aims to mitigate potential heat bottlenecks associated with the advanced 2nm process, enhancing overall performance [2][3]. Group 2: Market Implications - The success of the Exynos 2600 is critical for Samsung's System LSI division, as it is planned for use in the upcoming Galaxy S26 series, which is a flagship product with significantly higher supply volumes compared to other models [3]. - The previous Exynos 2500 was not adopted for the Galaxy S25 series, marking a setback for Samsung, making the upcoming Exynos 2600 a pivotal opportunity for recovery [3]. Group 3: Foundry Business Impact - Samsung Foundry recently signed a contract worth approximately 22.8 trillion KRW (around 120 billion RMB) with Tesla for 2nm advanced process semiconductor supply, laying a foundation for business recovery [4]. - The successful adoption of Exynos 2600 by Galaxy S26 will directly influence the Foundry division's order volume, creating a synergistic growth opportunity for both System LSI and Foundry businesses [5].

Core Viewpoint - Samsung Electronics faces increasing pressure to revitalize its competitiveness in the memory chip market, particularly in high bandwidth memory (HBM), which is crucial for advanced AI computing. Establishing a supply agreement with major buyer Nvidia is essential for Samsung [1][2]. Group 1: HBM Market Dynamics - SK Hynix has dominated the HBM market since 2022, supplying Nvidia exclusively with HBM3, while Samsung has not yet passed Nvidia's stringent certification tests. Analysts predict that by 2025, SK Hynix will hold a 57% market share, followed by Samsung at 24% and Micron at 19% [1]. - Samsung's relative weakness in HBM is a key factor in its declining position in the broader DRAM market, where it lost its leadership to SK Hynix for the first time, with market shares of 34% and 36% respectively [2]. - Samsung is focusing on improving its HBM products and aims to pass Nvidia's certification for HBM3E chips, which could open doors for future orders [2]. Group 2: Semiconductor Business Performance - Samsung's foundry division has secured a significant order from Tesla for next-generation AI chips, which may help offset substantial losses in its memory division [3][4]. - The foundry's 2nm process is reportedly achieving expected yields and production stability, with plans for mass production by the end of the year [4]. - The contract with Tesla is seen as a critical achievement, potentially leading to more orders from other major tech companies and improving Samsung's competitive position against TSMC [5]. Group 3: Future Strategies and Expectations - Samsung plans to implement a dual-track strategy to enhance its existing mature process business while accelerating its pursuit of TSMC [6]. - The foundry's strong performance is expected to positively impact Samsung's overall semiconductor results and help restore its memory competitiveness [6]. - Samsung is working on the next generation of HBM (HBM4) and has submitted its sixth-generation DRAM (D1c) for validation, with production expected to ramp up soon [7].

Group 1 - A survey conducted at the end of last year revealed that nearly 90% of Samsung users are dissatisfied with the AI features on their phones, finding them largely unhelpful [1][2] - Samsung is in discussions with companies like OpenAI and Perplexity AI to integrate more AI services into its upcoming Galaxy smartphones, moving beyond reliance on Google's Gemini [1][3] - The survey included over 2,000 smartphone users, with 87% of Samsung Galaxy users stating that the new AI features provide "little value" or "almost no value" to their mobile experience [1] Group 2 - Among Samsung Galaxy users who have AI-enabled phones, less than half (46.9%) reported using the Galaxy AI features, while 53.1% indicated they have not used them [2] - Samsung's mobile division president, Choi Won-joon, announced plans to offer more AI functionality in the upcoming Galaxy S26 series, expressing openness to integrating competitive AI technologies [3] - Samsung is reportedly close to finalizing an investment agreement with Perplexity and plans to incorporate its applications and assistants into future devices [3]

Core Viewpoint - Samsung is preparing for a significant increase in semiconductor orders, as indicated by the dispatch of skilled personnel to its Texas plant to expedite construction and production readiness [1][2]. Group 1: Investment and Development - The investment in the Taylor plant has reached $17 billion, with plans for completion by Q1 2026 [2]. - Personnel sent to the Taylor plant are experts in various fields critical to silicon manufacturing, including process, equipment, yield, and quality [2]. Group 2: Production and Technology - Samsung aims to start production in early 2026, with plans for large-scale production of 2nm GAA wafers [2]. - The initial yield estimate for the 2nm node technology is 30%, with a target of achieving a 70% yield by the end of the year [3]. - Samsung has begun prototype mass production of the Exynos 2600 on the 2nm node and has completed the basic design for its second-generation 2nm GAA process [3].

Core Viewpoint - The semiconductor industry is entering the 1.4nm era, with significant implications for technology, strategy, and market positioning among key players like TSMC, Intel, and Samsung [1][21]. Group 1: Samsung's 1.4nm Delay - Samsung Electronics announced a delay in its 1.4nm (14A) semiconductor mass production target to 2029, two years later than previously planned [2]. - The delay is attributed to Samsung Foundry's strategic response to significant losses, including a 4 trillion KRW loss last year and a 2 trillion KRW loss in Q1 of this year [2][3]. - Samsung aims to improve the maturity and yield of its 2nm process, which currently has a yield of about 40%, compared to TSMC's over 60% [3][4]. Group 2: Intel's Shift in Focus - Intel's CEO is considering shifting focus to the 14A chip manufacturing process, potentially deprioritizing the previously emphasized 18A process [5][8]. - The 18A process, which includes advanced technologies like RibbonFET and PowerVia, may face cancellation or reduced priority due to insufficient customer appeal and the need for more external orders [7][8]. - Intel's 14A process is expected to provide a 15-20% performance improvement and a nearly 30% increase in chip density, with a projected 25% reduction in power consumption [10][11]. Group 3: TSMC's Steady Progress - TSMC is positioned as a leader in the 1.4nm race, with expectations to begin production in 2028, having already achieved good yield rates [13][14]. - TSMC's A14 process utilizes innovative architectures to enhance performance and energy efficiency, achieving a 10-15% speed increase at the same power level [13][19]. - The company adopts a cautious approach to new technologies, balancing the need for maturity and stable mass production capabilities [16][17]. Group 4: Competitive Landscape - The competition among TSMC, Intel, and Samsung in the 1.4nm space is not only about technological capabilities but also strategic decisions and market positioning [21]. - Intel's potential shift to prioritize 14A over 18A may indicate a significant strategic pivot, impacting its future in the foundry market [8][12]. - The adoption of High-NA EUV lithography varies among the companies, with Intel leading, TSMC being cautious, and Samsung still evaluating its use [21].

Core Viewpoint - Samsung has postponed the construction of its 1.4nm test line, originally scheduled for Q2 this year, with investments now expected to be delayed until the end of this year or early next year. This may push the mass production timeline for the 1.4nm process to around 2028 due to a sluggish market in the foundry business [1]. Group 1: Investment and Production Plans - Samsung's foundry division reported a loss of approximately 2 trillion KRW in Q1, leading to a reduction in its annual equipment investment plan from about 10 trillion KRW to around 5 trillion KRW [1]. - The company is shifting its focus to strengthening internal structures and concentrating resources on the 2nm process, which is expected to begin mass production by the end of this year [1]. - The Samsung System LSI division is planning to use the 2nm process for the upcoming "Exynos 2600" application processor, which is set to be released by the end of the year, potentially increasing the likelihood of successful mass production [1]. Group 2: Market Strategy - Samsung is actively seeking orders from major North American tech companies, including Tesla and Qualcomm, for its 2nm process [2]. - There are considerations to deploy the 2nm process at the newly constructed factory in Taylor, Texas, indicating a need to accelerate the development of this technology [3].

Core Viewpoint - Samsung Electronics is facing significant challenges in its semiconductor business, particularly in the memory and system semiconductor sectors, with the success of the next-generation HBM (High Bandwidth Memory) commercialization being crucial for its performance [2][4]. Group 1: Semiconductor Business Strategy - Samsung Electronics is planning its semiconductor business strategy for the second half of the year, with a global strategy meeting scheduled to address the performance of various business units and discuss strategies to cope with macroeconomic uncertainties [2]. - The meeting will focus on overcoming the current downturn in the semiconductor business, which is divided into three main pillars: DRAM and NAND memory semiconductors, foundry services, and system LSI [2]. Group 2: Memory Business Challenges - The success of Samsung's memory semiconductor business in the second half of the year largely depends on the commercialization of HBM, which is essential for AI data centers [4]. - Samsung failed to deliver HBM3E products to its major client NVIDIA last year, prompting a redesign of the DRAM used in HBM3E and a renewed effort to supply NVIDIA [4]. - The company aims to start mass production of the next-generation 1c DRAM and HBM4 by the end of the year, with expectations of obtaining production approval in the third quarter [4][5]. Group 3: Foundry Business and Market Position - Samsung's foundry division is struggling to attract major clients like Apple, NVIDIA, and Qualcomm in the 3nm and smaller process nodes, leading to a decline in market share from 8.1% to 7.7% in Q1 [6]. - TSMC continues to lead in the foundry market, with plans to enter mass production of 2nm technology, while Samsung is in discussions with potential clients for its own 2nm process [6][8]. - Samsung is investing $37 billion in a new foundry in Taylor, Texas, but faces pressure to expand domestic investments due to U.S. government policies [8][9]. Group 4: Investment and Operational Challenges - The construction of the new foundry in Texas is progressing, with the first factory nearly completed, but Samsung must navigate the complexities of U.S. investment regulations and market demand [8]. - The company is cautious about expanding capacity at the Taylor facility without ensuring long-term customer demand, which could lead to significant financial risks [9].

Investment Rating - The report maintains a "Recommended" investment rating for the semiconductor and semiconductor equipment industry [7] Core Insights - The overseas AI chip index rose by 0.7% this week, while the domestic AI chip index fell by 1.7%. TSMC's stock increased by approximately 3%, and Nvidia's mapping index rose by 3.0% due to better-than-expected Q1 revenue [1][10] - Apple is expanding its manufacturing in India, with expectations that iPhones produced there will account for 25%-30% of global shipments by 2025, up from 18% in 2024 [2][26] - The global wearable device market saw a 10.5% year-on-year increase in Q1 2025, with China experiencing a 37.6% growth [2][27] - The demand for AI servers remains strong, with a 4.5% increase in the server ODM index this week, indicating a robust market outlook for the second half of 2025 [1][10] Market Index - The overseas chip index showed stability with a slight increase of 0.73% this week, while the domestic A-share chip index decreased by 1.7% [10] - The Nvidia mapping index increased by 3.0%, reflecting a recovery in Nvidia's supply chain due to strong data center business growth [11] - The server ODM index rose by 4.5%, driven by strong demand for AI servers, with expectations for mass production in the latter half of 2025 [11] Industry Data - Apple's iPhone global sales increased by 15% year-on-year in April and May, primarily driven by demand in China and the U.S. [2][25] - In Q1 2025, global wearable device shipments reached 45.6 million units, with Huawei leading the market [27][28] - The global smartphone production is expected to decline by 1% in 2025, with India projected to be the biggest winner due to export demand [2][30] Major Events - Samsung's Exynos 2600 prototype chip has entered mass production, expected to be released in February 2026 [3][34] - Apple's first foldable phone is set to be released next year alongside the iPhone 18 series [3][36] - The upcoming iPhone 17 Air is anticipated to be unveiled in September, coinciding with the launch of Samsung's ultra-thin AI phone [3][36]

Core Viewpoint - The global semiconductor foundry market is witnessing significant advancements with TSMC and Samsung Electronics set to begin mass production of 2nm technology in the second half of the year, indicating a competitive landscape in advanced semiconductor manufacturing [1][2]. Group 1: TSMC Developments - TSMC plans to start mass production of 2nm technology at its Hsinchu and Kaohsiung facilities in the second half of this year, utilizing the GAA technology previously introduced by Samsung in its 3nm process [1]. - Major clients such as Apple, Nvidia, and AMD are expected to launch new products based on TSMC's 2nm semiconductors [1]. Group 2: Samsung Electronics Progress - Samsung Electronics has announced plans to mass-produce 2nm semiconductors for mobile applications in the second half of the year, aiming to recover its foundry profitability [1]. - The upcoming Galaxy S26 smartphone is predicted to feature the Exynos 2600 processor, which will be based on Samsung's 2nm technology [1]. Group 3: Market Competition and Trends - TSMC has achieved a 100% utilization rate for its 3nm process after five quarters of mass production, while it is expected that the 2nm process will reach full utilization within four quarters post-launch [2]. - Samsung, despite initial challenges with its 3nm process, has secured contracts for the upcoming Nintendo Switch 2, marking a significant competitive win against TSMC [2]. - In response to the U.S.-China trade tensions, Samsung is expanding its customer base in China and increasing production to meet strong demand from American clients [2].