Summary of PNC (603690.SS) Management Call Company Overview - **Company**: PNC (603690.SS) - **Industry**: Semiconductor Equipment - **Core Business**: Provides wet cleaning tools and high purity systems primarily for semiconductor clients, with 87% of total revenues in 1H25 coming from this sector [3][9] Key Points 1. Industry Demand Outlook - Management is optimistic about the growth momentum in the semiconductor industry, particularly in cleaning tools and bulk gas stations, driven by product expansion towards advanced node tools and increased client spending on 12-inch capacity expansion [1][9] - Expected growth in China semiconductor capital expenditure (capex) from **US$41 billion in 2024** to **US$43 billion/US$45 billion in 2025/2026** [2] 2. Product Expansion Strategy - PNC has received batch orders for cleaning tools designed for **28nm production lines** and is expanding into advanced node solutions [4] - The S300-D platform is highlighted for its capability to improve wafer processing efficiency by **30%** and better control flow fields [4] - Introduction of a hot concentrated sulfuric acid SPM cleaning tool, which has a higher entry barrier and aims to enhance client performance [4] 3. Competitive Advantages - PNC focuses on high-end products with differentiated features to maintain a competitive edge in a rising competition landscape [10] - Development of comprehensive solutions across cleaning tools, components, materials, and system solutions [10] - Successful operation of bulk gas stations for 12-inch clients, with two stations contributing to revenue since 2022/2024 [10] 4. Order and Revenue Insights - As of 1H25, PNC's orders were at **Rmb1.7 billion**, with accumulated orders on hand reaching **Rmb13.4 billion** by the end of June 2025, with over **85%** of orders from semiconductor clients [9] - **89%** of semiconductor orders are from 12-inch clients, indicating a strong focus on this segment [3] 5. Localization Efforts - Management is working on the localization of key components to secure the supply chain, which is crucial for maintaining operational efficiency and reducing dependency on external suppliers [9] 6. Future Outlook - Management expects strong momentum in client spending to continue through **2027-2028**, positioning PNC as a key beneficiary of semiconductor capacity expansion in China [9] Additional Insights - The company is strategically positioned to benefit from the growing demand for advanced semiconductor technologies, particularly in the context of the Gen-AI trend, which is expected to drive further capex in the semiconductor sector [2] This summary encapsulates the critical insights from the management call, highlighting PNC's strategic positioning within the semiconductor equipment industry and its proactive measures to capitalize on emerging opportunities.