Summary of Conference Call on Global Semiconductors and SiC Technology Industry Overview - The focus is on the semiconductor industry, specifically the potential use of Silicon Carbide (SiC) in advanced packaging processes, particularly by Taiwan Semiconductor Manufacturing Company (TSMC) [1][12]. Key Points and Arguments 1. **SiC Adoption in CoWoS**: TSMC is considering SiC to replace existing materials in the CoWoS (Chip on Wafer on Substrate) process due to its high thermal conductivity, which is three times that of silicon [1][14]. 2. **Applications of SiC**: - **Conductive SiC**: Used for Thermal Interface Material (TIM) to improve heat transfer from silicon chips to cooling systems [2][13]. - **Semi-insulating SiC**: Proposed for interposers, replacing conventional silicon or RDL materials [2][13]. 3. **Implementation Challenges**: The transition to SiC technology faces challenges such as capacity limitations, extended production times, and increased contact resistance, indicating that widespread adoption may take time [3][15][17]. 4. **Market Capacity Estimates**: - Current CoWoS capacity is estimated at approximately 70 kilowatts per month (kwpm), projected to grow to around 110 kwpm by the end of the next year [4][16]. - If all interposers and TIM are replaced by SiC, the required capacity would be 220 kwpm, which is double the current SiC capacity of 92 kwpm by the end of 2025 [4][16]. 5. **Company-Specific Insights**: - **DISCO**: Expected to benefit significantly as its SiC revenue contribution has decreased from nearly 20% to one-third of previous levels. Higher consumables intensity of SiC could improve margins [5][25]. - **Renesas**: Holds a 35% stake in Wolfspeed, valued at approximately $400 million, which could provide upside if Wolfspeed benefits from advanced packaging [5][26]. - **SUMCO**: Currently overvalued with no direct benefits from SiC, presenting a potential short opportunity [5][28]. - **Infineon**: Does not produce substrates in-house and will not benefit from the SiC trend despite being a SiC maker [27]. Additional Important Insights - **Wolfspeed's Capacity**: Although capable of producing 12" substrates, Wolfspeed's financial constraints will limit its capacity expansion, impacting its ability to meet potential demand from CoWoS [27]. - **Market Reactions**: The market has reacted positively to news regarding SiC, with GlobalWafers' share price increasing by 36% since early September, although Japanese markets have not shown similar movements [25]. - **Investment Ratings**: - DISCO: Outperform with a price target of ¥52,800 [7]. - Renesas: Outperform with a price target of ¥2,300 [8]. - Infineon: Outperform with a price target of €49.00 [9]. - SUMCO: Market-Perform with a price target of ¥1,260 [10]. - TSMC: Outperform with a price target of NT$1,444.00 [11]. This summary encapsulates the critical insights from the conference call regarding the semiconductor industry and the implications of SiC technology for various companies involved.

Core Viewpoint - The company Lichee Semiconductor reported a significant increase in net losses for Q2 2025, primarily due to the appreciation of the New Taiwan Dollar and foreign exchange losses, with a net loss of NT$33.3 billion and a loss per share of NT$0.8, compared to NT$0.26 in Q1 [1] Group 1 - In Q2, the company shipped approximately 400,000 wafers, a 9% increase from Q1, but the average selling price (ASP) declined by 2% to 3% due to a 5% appreciation of the New Taiwan Dollar, resulting in a revenue growth of only 1.5% in NT dollar terms [1] - The foreign exchange factors significantly impacted profitability, with a foreign exchange loss of NT$15.9 billion in Q2, leading to a net loss increase from NT$11 billion in Q1 to NT$33.3 billion in Q2 [1] Group 2 - The company plans to focus on five operational priorities, including a low visibility outlook for Q3 in the Greater China region, with weak demand for driver ICs and image sensors, while demand for power management ICs (PMICs) related to AI applications remains strong in Europe and the US [1] - Demand for DRAM foundry services has rebounded, driven by major manufacturers exiting the 8G DDR4 market, prompting customers to stock up, with wafer demand fully loaded and ASPs increasing monthly since last month [2] - The SLC Flash product line is seeing a recovery in demand as end customers reduce inventory, with 24nm SLC Flash now in mass production, and the company expects future shipping momentum as major manufacturers gradually exit the SLC market [2] Group 3 - The company is accelerating its 3D AI Foundry and Interposer layout, with small-scale shipments of Interposer starting in Q2, primarily focusing on CoWoS-S, and plans to expand capacity for Interposer production, which is expected to contribute to gross margins over the next two years [2] - The company is also progressing with DRAM four-layer WoW stacking in conjunction with advanced logic process chips, and is developing eight-layer WoW stacking technology with customers, which, along with Interposer, is expected to become a major profit source for the 3D AI Foundry [2] - The development of an 8-inch GaN application for AI servers on a 100V technology platform is nearing completion, with the first batch of customer samples being sent, and trial production expected to start in Q4 this year, following increased inquiries from US and Japanese customers regarding GaN foundry services [2]