Core Viewpoint - Apple's announcement to increase its U.S. investment by $100 billion, totaling $600 billion over the next four years, aims to boost sales and leverage recent positive earnings momentum [1][12]. Investment and Manufacturing Strategy - The announcement coincides with new tariffs imposed by the White House, raising concerns for Apple as most iPhones are manufactured in China [2]. - While the announcement does not include plans to build smartphones in the U.S., it outlines partnerships to manufacture several iPhone components domestically through Apple's American Manufacturing Program [3]. - Initial partners in this program include Corning, Coherent, GlobalWafers America, Applied Materials, Texas Instruments, Samsung, GlobalFoundries, Amkor Technology, and Broadcom [4]. - Specific partnerships involve using Corning glass products for iPhones and Apple Watches, and sourcing VCSEL lasers from Coherent for facial recognition [5]. Financial Performance - Apple's fiscal third-quarter earnings report showed a revenue increase of 10% to $94 billion and earnings per share up 12% to $1.57, with product sales rising 8.2% [12]. - Despite the positive earnings, Apple stock has been relatively flat, rising less than 2% over the past 12 months, while competitors like Nvidia and Microsoft have surpassed Apple in market capitalization [8][10]. Market Reaction - Following the announcement, Apple stock experienced a 5% increase, indicating positive market sentiment [6]. - The company's recent commitment to U.S. manufacturing is seen as a strategy to mitigate tariff-related risks and maintain customer loyalty [15].

Core Viewpoint - Tim Cook is recognized as the most financially adept CEO in Apple's history, succeeding Steve Jobs, who was known for innovation. Cook has significantly increased Apple's market value and revenue during his tenure, but his limitations in innovation are becoming apparent in the current technological landscape, particularly with the rise of AI [1][3][5]. Group 1: Tim Cook's Achievements - Under Tim Cook's leadership, Apple became the first company to reach a market capitalization of over $1 trillion, $2 trillion, and $3 trillion [3]. - During Cook's tenure of over 10 years, Apple's revenue, profit, and market value have increased tenfold [3]. Group 2: Limitations of Tim Cook - The current technological environment is changing, and Cook's financial background may not be suitable for leading Apple in an era that demands disruptive innovation [5][7]. - Apple is lagging in AI development compared to competitors like OpenAI, Google, and Meta, primarily due to a lack of clear goals and innovation focus within the company [9]. - There is a growing belief among analysts and investors that Cook is no longer the best fit for Apple's leadership, as the company now requires a CEO with a strong technological and innovative background rather than one focused on logistics and cost control [9].

Investment Rating - The report maintains a "Recommended" investment rating for the semiconductor and semiconductor equipment industry [5]. Core Insights - The overseas AI chip index increased by 1.8% this week, with AMD and Nvidia rising by 6.2% and 3.5% respectively, while Marvell and MPS saw declines of nearly 3% [1][8]. - The domestic AI chip index rose by 1.9%, with SMIC increasing by nearly 4% and Hengxuan Technology by 2.6% [1][8]. - The Nvidia mapping index surged by 5.8%, with Changxin Bochuang and Taichengguang experiencing significant gains of nearly 20% and 12% respectively [1][8]. - The server ODM index saw a slight increase of 0.3%, with Wiwynn rising nearly 5% [1][8]. - The storage chip index fell by 0.6%, with some companies like Baiwei Storage and Taiji Industrial showing gains of nearly 3% [1][8]. - The power semiconductor index increased by 1.0%, while the A-share fruit chain index rose by 4.7% and the Hong Kong fruit chain index by 3.9% [1][8]. Market Data Summary - In 2024, domestic smart glasses sales are projected to reach 434,000 units, a year-on-year increase of 36.5%, with expectations to exceed one million units in 2025, representing a growth rate of approximately 130% [2][22]. - In May 2025, domestic smartphone shipments totaled 23.716 million units, a year-on-year decline of 21.8%, with domestic brands accounting for 19.177 million units, down 24.2% [2][23]. - In Q2 2025, global PC shipments reached 67.6 million units, reflecting a year-on-year growth of 7.4% [2][23]. - In Q2 2025, Xiaomi led the Chinese smartphone market with a 16.63% market share, followed closely by Vivo, OPPO, Huawei, and Apple [2][28][29]. Major Events Summary - The iPhone 17 Pro is expected to feature an all-aluminum body with a redesigned MagSafe magnetic circle due to the repositioning of the Apple logo [3][30]. - Samsung launched the Galaxy Z Fold 7, which features significant changes in weight and screen design [3][30]. - The first MacBook equipped with an OLED screen is anticipated to launch in 2026, starting with the MacBook Pro series [3][30]. - Apple released the third developer preview of visionOS 26 for the Vision Pro device on July 8 [3][31].

Sales Performance - Global PC device sales in Q2 2025 increased by 6.5% year-on-year, reaching approximately 68 million units[5] - U.S. PC sales were about 19 million units, showing a slight growth of 0.1% year-on-year[5] - Apple performed best in Q2 with global shipments of approximately 6.2 million units, a year-on-year increase of 21.4%[5] - In the U.S., Apple sold about 2.8 million units, reflecting a year-on-year growth of 22.2%[5] Market Trends - Apple's Mac series outpaced the overall growth rate of laptops, with global and U.S. sales growth maintaining around 20% even when excluding U.S. sales[11] - Factors contributing to Apple's strong performance include an upcoming replacement cycle for PCs purchased during remote work/study periods and the 2025 student discount policy for MacBooks[12] Tariff Impact - The U.S. tariff policy could impose a 25% tariff on products from Japan and South Korea, with Taiwan's tariff situation remaining uncertain[3] - If tariffs are implemented, the cost of Mac series products could increase by at least 15% compared to the original 10% tariff[13] Risks - Potential risks include challenges in chip manufacturing processes and yield rates, uncertainty in tariff policies, and lower-than-expected PC device sales[4]

Investment Rating - The investment rating for the Greater China Technology Hardware industry is "In-Line" [2]. Core Insights - The technology hardware sector has outperformed major market indexes year-to-date (YTD), with smartphone-related stocks showing significant gains [5][6]. - YTD share price performance for tech hardware stocks indicates an increase of 66% for top performers and a decrease of 38% for bottom performers, compared to HSI's increase of 19% [9]. - Demand forecasts suggest limited shipment volume growth across various segments, including servers, PCs, and smartphones, with specific projections for 2025 indicating a slight increase in server shipments to 14.5 million units [11]. Summary by Sections Performance Overview - Greater China tech hardware stocks have outperformed major market indexes YTD, except for the Hang Seng Index (HSI) [5][6]. - The share price performance of tech hardware stocks shows a range of increases from 66% for top performers to declines of 38% for the bottom performers [9]. Demand Forecasts - Limited shipment volume growth is expected across various categories, including servers, PCs, and smartphones, with specific figures indicating a forecast of 14.5 million server units for 2025 [11]. - Smartphone shipments are projected to show a cyclical recovery starting in 2024, with significant growth anticipated in 5G smartphone sales [28]. Valuation Insights - The report highlights a justified valuation premium for companies involved in the AI hardware supply chain, with specific companies showing significant AI revenue contributions [12]. - The analysis includes a detailed breakdown of AI revenue and profit mixes for various companies, indicating a strong focus on AI-related hardware [12]. Production and Cost Analysis - The report discusses the cost implications of producing Apple products in different regions, noting that iPhones produced in the US have a 75% higher FOB price compared to those made in China [15]. - A detailed cost analysis shows that the bill of materials (BoM) for iPhones varies significantly by production location, impacting overall pricing strategies [15]. Market Trends - The report identifies Xiaomi as a key player with a rich product portfolio and rapid growth in electric vehicle (EV) deliveries, indicating a diversification strategy beyond traditional tech hardware [34][36]. - The smartphone market is experiencing a cyclical recovery, with expectations for increased shipments and demand in the coming years [28].

Group 1: Core Insights - The global share of generative AI servers is expected to increase from 19.6% in 2023 to 37.7% in 2028, an increase of 18.1 percentage points [1][3] - 2024 is projected to be a breakout year for China's AI server market, with an estimated growth rate of approximately 87% [1][3] - The annual growth rate for China's AI servers is expected to remain around 30% from 2025 to 2028 [1][3] Group 2: Market Review - The overseas AI chip index rose by 10% this week, driven by expectations of U.S. interest rate cuts and a recovery in semiconductor demand [2] - The domestic AI chip index fell by 0.6%, with mixed performance among component stocks [2] - The server ODM index increased by 4.4%, benefiting from the anticipated U.S. interest rate cuts and improved semiconductor demand [2] Group 3: Industry Data - Global personal computer shipments increased by 6.7% year-on-year in Q1 2025, reaching 61.4 million units [3] - The storage chip index rose by 1.6%, supported by the lack of tariff reductions on U.S. storage chips, which is expected to boost domestic demand [2] Group 4: Major Events - Apple plans to increase iPhone production in India by 10% this year, aiming for at least 50 million units [4] - TSMC's Arizona plant has begun mass production, although it has confirmed ongoing receivable issues [5]

Investment Rating - The industry investment rating is maintained as "Recommended" [7] Core Insights - The overseas AI chip index increased by 10% this week, driven by rising expectations of interest rate cuts in the US and a continued recovery in semiconductor demand [1][10] - The domestic AI chip index decreased by 0.6%, with significant divergence in the performance of constituent stocks [1][10] - The global generative AI server share is expected to rise from 19.6% in 2023 to 37.7% by 2028, an increase of 18.1 percentage points [2][27] - The Chinese AI server market is projected to grow by approximately 87% in 2024, with annual growth rates around 30% from 2025 to 2028 [2][28] - Apple plans to increase iPhone production in India by 10% by the end of this year, aiming to produce at least 50 million units [3][35] Market Indices - The overseas chip index rose by 10% this week after a 7% decline last week, reflecting a positive market sentiment [10] - The domestic A-share chip index showed stability but experienced a 0.6% decline this week, with significant variations among constituent stocks [10] - The server ODM index increased by 4.4%, benefiting from the positive outlook in the semiconductor sector [1][10] - The storage chip index rose by 1.6%, supported by the lack of tariff reductions on US storage chips, which is expected to boost domestic demand [1][10] Major Events - TSMC's 2nm process is expected to enter mass production in the second half of this year, with plans to launch the A16 process by the end of 2026 [3][39] - TI reported Q1 2025 revenue of $4.07 billion, an 11% year-over-year increase, with operating profit of $1.324 billion [3][37] - Apple is restructuring its Siri development team and plans to produce a significant portion of its MacBook and iPad in Vietnam for the US market [3][35]