Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Guided down: ASML, Applied Materials, Tokyo Electron. Revised up: LAM. A number of reasons are mentioned for a slower outlook. China slowdown. TSMC lumpy. Export licenses. Geo-Globo uncertainty. </li>
<li>Yes, But: 1) Chinese firms bought too much equipment in 2022-24  2) Logic Capex of Intel Samsung will decline further  3) Chinese SPE vendors are gaining share </li>
<li>AI is real, HBM is real, SOCAMM is real, but TSMC and SK Hynix are not revising up Capex in 2025. Expect higher Capex in 2026 and 2027. </li>
</ul>


Guided down: ASML, Applied Materials, Tokyo Electron. Revised up: LAM. A number of reasons are mentioned for a slower outlook. China slowdown. TSMC lumpy. Export licenses. Geo-Globo uncertainty. 
Yes, But: 1) Chinese firms bought too much equipment in 2022-24  2) Logic Capex of Intel Samsung will decline further  3) Chinese SPE vendors are gaining share 
AI is real, HBM is real, SOCAMM is real, but TSMC and SK Hynix are not revising up Capex in 2025. Expect higher Capex in 2026 and 2027. 


SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>China was ahead of the US in AI semiconductor and applications in 2015-20. Huawei had a complete AI processor and software platform. Losing access to TSMC froze Huawei’s progress.</li>
<li>Most likely, Huawei new AI processor Ascend 910C is made by SMIC on 6nm. Power Efficiency of Ascend 910C is poor versus the latest Nvidia GPU, but similar to N-2.</li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a> 7-6nm and access to HBM memory are major limiting factor to the chip volumes and performance.</li>
</ul>


China was ahead of the US in AI semiconductor and applications in 2015-20. Huawei had a complete AI processor and software platform. Losing access to TSMC froze Huawei’s progress.
Most likely, Huawei new AI processor Ascend 910C is made by SMIC on 6nm. Power Efficiency of Ascend 910C is poor versus the latest Nvidia GPU, but similar to N-2.

Semiconductor Manufacturing International Corp (SMIC) (981 HK) 7-6nm and access to HBM memory are major limiting factor to the chip volumes and performance.


Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.</li>
<li>
<strong>No more Moore's Law</strong>: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.</li>
<li>Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.</li>
</ul>


TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.

No more Moore's Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

SMIC (Semiconductor Manufacturing International Corp) / Equity Bottom-Up

SMIC (Semiconductor Manufacturing International Corp) (688981 CH)

SMIC (Semiconductor Manufacturing International Corp)

<ul>
<li>SMIC last week reported second quarter revenues of just over $3 billion, up 19.7% QoQ, up 36% YoY and handily beating the forecasted 15% growth at the midpoint.</li>
<li>Gross margin was 25.3%, up 5.2 percentage points QoQ and up 4.9 points YoY. The significant improvement here was also attributed to both ASP increases a more favourable product mix.</li>
<li>SMIC’s AI companion chip demand is enormous, we pulled forward shipments and increased this significantly. In this report we said the increase, on a comparable basis, should be around 40%.</li>
</ul>


SMIC last week reported second quarter revenues of just over $3 billion, up 19.7% QoQ, up 36% YoY and handily beating the forecasted 15% growth at the midpoint.
Gross margin was 25.3%, up 5.2 percentage points QoQ and up 4.9 points YoY. The significant improvement here was also attributed to both ASP increases a more favourable product mix.
SMIC’s AI companion chip demand is enormous, we pulled forward shipments and increased this significantly. In this report we said the increase, on a comparable basis, should be around 40%.


SMIC Q2 2026. Record Quarter & “AI Companion Chip” Demand Is Enormous

Thematic (Sector/Industry)

<ul>
<li>Huawei introduced the “Tau Scaling Law” under which chip designers optimise for the time taken for elements of a chip to communicate, rather than for the space between transistors. </li>
<li>Huawei’s next-generation Kirin SoC, due autumn 2026, will be the first commercial chip to fully adopt the resulting architecture, which Huawei is calling “LogicFolding.”</li>
<li>Huawei chips designed under this framework will deliver transistor density equivalent to a 1.4nm process by 2031, three years after TSMC’s publicly stated 2028 timeline for its A14 (1.4nm) node.</li>
</ul>


Huawei introduced the “Tau Scaling Law” under which chip designers optimise for the time taken for elements of a chip to communicate, rather than for the space between transistors. 
Huawei’s next-generation Kirin SoC, due autumn 2026, will be the first commercial chip to fully adopt the resulting architecture, which Huawei is calling “LogicFolding.”
Huawei chips designed under this framework will deliver transistor density equivalent to a 1.4nm process by 2031, three years after TSMC’s publicly stated 2028 timeline for its A14 (1.4nm) node.


Huawei’s “Tau Scaling Law” and “LogicFolding”. Desperation, A Genuine Breakthrough Or Both?

China

Semiconductor Manufacturing International Corporation operates as a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

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SMIC (Semiconductor Manufacturing International Corp) (688981 CH)

SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Nicolas Baratte

Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...

Nicolas Baratte

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

SMIC Q2 2026. Record Quarter & “AI Companion Chip” Demand Is Enormous

SMIC’s AI companion chip demand is enormous, we pulled forward shipments and increased this significantly. In this report we said the increase, on...

William Keating

Huawei’s “Tau Scaling Law” and “LogicFolding”. Desperation, A Genuine Breakthrough Or Both?

Huawei chips designed under this framework will deliver transistor density equivalent to a 1.4nm process by 2031, three years after TSMC’s publicly...

William Keating

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52-week Range

Market Cap (USDm)

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SPE – Semi Production Equipment: The Big Reset Is Happening. SPE Firms Expectations Is the Problem

​Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Nicolas Baratte

Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)

​Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...

Nicolas Baratte

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? TSMC revises down 2024 global semi y/y sales from over 10% to...

Andrew Lu

SMIC Q2 2026. Record Quarter & “AI Companion Chip” Demand Is Enormous

SMIC’s AI companion chip demand is enormous, we pulled forward shipments and increased this significantly. In this report we said the increase, on...

William Keating

Huawei’s “Tau Scaling Law” and “LogicFolding”. Desperation, A Genuine Breakthrough Or Both?

Huawei chips designed under this framework will deliver transistor density equivalent to a 1.4nm process by 2031, three years after TSMC’s publicly...

William Keating

Slower outlook for semiconductor equipment industry due to China slowdown, TSMC uncertainty, and export licenses. Expect higher Capex in 2026 and...

Huawei's advancement in AI semiconductor technology was hindered by losing access to TSMC, impacting the progress of their AI processor Ascend...