Market Insights Weekly Call, Issue 10 | Musk's Terafab Partners with Intel to Manufacture Chips: How Will the Semiconductor Landscape Change?

Live broadcast review:

Weekly Market Review and Outlook: US-Iran Talks Collapse, Global Capital Accelerates Repricing 1:30 ~ 6:20

The US core CPI year-over-year dropped to 2.6%, lower than expected, quietly fueling rate cut expectations; meanwhile, the collapse of US-Iran talks and high oil price volatility have not prevented a阶段性 bottom in US stocks from being identified, with extreme pessimism gradually receding.In terms of Hong Kong stocks, the valuation discount effect is significant, and once sentiment reverses, the upside potential of Hong Kong stocks will far exceed that of US stocks.; China's manufacturing sector needs to beware: PPI pushed higher by oil costs, but companies' ability to pass on these costs lags, making profit pressure不容忽视.

Why Must Terafab Be Done? 6:25 ~ 14:50

Elon Musk's Tesla$Tesla (TSLA.US)$, the four major computational demand lines of SpaceX and xAI — FSD/Robotaxi, Optimus robot, super data centers, space computing power —will require over 20,000 AI chips by 2030 combined, and existing suppliers are simply unable to meet this non-standardized超大规模 demand.Taiwan Semiconductor and Samsung won't expand production indefinitely for a single client, while external procurement faces geopolitical risks in Taiwan. Building in-house is the only solution. The essence of Terafab isn't a traditional foundry, but a 'vertically integrated computing power factory'打通 design, manufacturing, and packaging全链路—this is where its true disruptive nature lies.

What are the roles and positioning of the three major vendors? Timings 15:00 ~ 24:25

Samsung$CSOP Samsung Electronics Daily (2x) Leveraged Product (07747.HK)$ is the only one that simultaneously coverslogic chips, memory chips, and advanced packaging,across all three business areas. The Texas factory has entered the equipment debugging phase, with a target to mass-produce 2nm chips by 2027, making it Terafab'smost cruciallocal manufacturing partner.Intel$Intel (INTC.US)$Leveraging its IDM capabilities and a mature packaging production line in New Mexico, it has officially entered the market, best suited to undertake advanced local packaging in the US, significantly reducing the high-cost chain of 'wafer production in Arizona, then shipping to Taiwan for packaging'.Taiwan Semiconductor$Taiwan Semiconductor (TSM.US)$It is more likely to act as a 'safety net for high-end logic processes' rather than the main partner,with substantial orders expected to go to Samsung and Intel.。

Which segments of the Terafab project have high certainty? 24:30 ~ 32:10

Advanced packaging represents the optimal combination of 'high certainty × high profitability'.: The ASP per chip is approximately $10,000 with a gross margin of up to 50-60%. Capital expenditures are only one-quarter of the front-end process. Intel holds the greatest advantage in this segment. Memory/DRAM has the highest profit ceiling — Goldman Sachs predicts Samsung’s peak operating profit margin for memory will reach 75% by 2026, but its cyclical nature makes it unsuitable as a certainty-driven investment. If selecting stocks based on both certainty and profitability, the priority order is: Advanced Packaging (Intel) → Most stable overall solution (Samsung) → Ultimate equipment provider (ASML)。

ASML: No matter who wins, it will ultimately be the beneficiary 32:25 ~ 36:50

Whoever dominates Terafab's foundry operations among Samsung, Intel, or Taiwan Semiconductor, they cannot bypass ASML$ASML Holding (ASML.US)$EUV lithography machines — the only irreplaceable seller in the entire industrial chain, with demand certainty far exceeding any single foundry. The earliest signal to assess Terafab's progress is not Tesla announcements but whether Samsung and Intel's EUV procurement orders increase further and whether ASML expands its cleanroom capacity ahead of schedule.Capital markets have yet to fully trust Terafab at 100%, and this information and timing gap leaves investors an opportunity to prioritize positioning in ASML.

Q&A 1: How to maintain the 'high certainty' judgment for Terafab's advanced packaging segment? 36:56 ~ 40:38

Even if Taiwan Semiconductor’s CoWoS capacity is tight and Intel’s EMIB yield improvement lags behind expectations, ASE$ASE Technology (ASX.US)$ , Amkor$Amkor Technology (AMKR.US)$OSAT leaders such as ___ can still take on overflow orders; the certainty of demand for advanced packaging will not collapse due to obstacles faced by a single executor.The true value of Intel's packaging business is more akin to a "highly flexible option"—management has explicitly disclosed that advanced packaging orders will expand beyond $1 billion, with indications at the Morgan Stanley conference of nearing finalization on multi-billion-dollar annual revenue contracts. This is not only a financial turning point but alsothe critical moment to verify whether Intel’s turnaround logic can materialize。

Q&A 2: With limited supply of EUV equipment, will major players’ capacity expansion be delayed? 40:42 ~ 44:25

ASML’s EUV lithography machine delivery cycle exceeds 12 months. Taiwan Semiconductor, Samsung, Intel, and Terafab are all competing for purchases, resulting in Samsung’s Taylor, Texas plant production being pushed back to 2027 — equipment bottlenecks pose real risks. For Taiwan Semiconductor, if Terafab occupies extra capacity, utilization rates for advanced processes will face pressure;however, Samsung’s stock price is mainly driven by HBM memory logic, so delays in foundry progress have limited impact on its valuation。

*The above content was organized by AI.

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