Alpha Call Episode 7 Live Broadcast Review | Changes in the Global Chip Landscape: Asia Semiconductor's Offensive and Defensive Strategies

Keynote speaker: Joe Yu | Head of Investment Research, Futu Institutional and Private Wealth Team

Collaborative guest: Feng Di | Researcher, International Index Department, E Fund

Host: Richard | Futu Institutional and Private Wealth Team

Sanctions-induced restructuring + super cycle in memory storage place Asian semiconductors in an upward trajectory on the right side

I. Semiconductors: The unchanging underlying cornerstone of three industrial revolutions (00:01:05 ~ 00:05:04)

Over the past 50 years, humanity has experienced three industrial revolutions—PC internet, mobile internet, and artificial intelligence—with each being underpinned by key breakthroughs in semiconductors. The current AI era is no exception—Semiconductors play an irreplaceable role in the foundational computing power of the AI industry chain.

- PC Era: Intel 8088 chip achieved a balance between computing power and affordable consumer pricing

- Mobile Internet Era: Apple A5 chip significantly improved performance while maintaining energy efficiency

- AI Era: Chips/semiconductors are the core cornerstone of foundational computing power

II. Asia Semiconductor Index: Design philosophy and constituent stock analysis (00:05:42 ~ 00:12:33)

The index covers four major regions: Japan, South Korea, Mainland China (Hong Kong stocks), and Taiwan, collectively producing over 75% of the world's chips, forming a globally irreplicable complete industrial ecosystem $EFund A SEMICON ETF (03486.HK)$

- Top five constituent stocks: $ASMPT (00522.HK)$ 、$SK Hynix (000660.KR)$ 、$HUA HONG SEMI (01347.HK)$ 、 $Taiwan Semiconductor (TSM.US)$ 、 $SMIC (00981.HK)$

- Top ten concentration: approximately 74%, high purity and sharp focus

- Regional weightings (as of April 30): Hong Kong 63%, Japan 11%, South Korea 13%, Taiwan 13%

- Performance: Nearly quintupled since inception; YTD increase of about 40% this year

III. Core investment logic of the four major regions (00:12:39 ~ 00:27:22)

Mainland China — Acceleration in domestic substitution, with policy support providing a safeguard

For example,$HUA HONG SEMI (01347.HK)$ and $SMIC (00981.HK)$ as a representative,The core logic lies in the continuous release of domestic substitution potential。

- Proportion of domestic semiconductor equipment: 25% in 2024 → 35% in 2025, an increase of 10 percentage points in one year

- Huahong's capacity utilization remains consistently above 95%, with cumulative price increases of 30%~50% for mainstream memory models

- Core conclusion: Sanctions pressure is instead forcing an acceleration in domestic substitution,$SMIC (00981.HK)$ Advanced process breakthroughs also benefit simultaneously

South Korea — HBM super cycle, shift in memory pricing power

For example,$SK Hynix (000660.KR)$ Centered around HBM (High Bandwidth Memory), which has the highest global market share, with three manufacturers (Hynix, Samsung, Micron) collectively holding over 95% market share for years.Long-term agreement locking mechanism brings three major benefits: sustainability of profitability, capex discipline, and certainty of extended cycles。

- Q1 operating profit margin hit a historical peak, reaching 72%

- HBM capacity expansion cycle ranges from 16 to 24 months, with supply-demand mismatch in 2026 being a foregone conclusion

- The super-cycle of price hikes is expected to last from 2026 to the second half of 2027

Japan – The hidden champion of semiconductor equipment

$Tokyo Electron (8035.JP)$ Holds a steady global market share exceeding 90% in the niche pre-process equipment for coating and developing, and ranks among the top two globally in the other four pre-process categories. It holds an irreplaceable position in advanced process equipment worldwide.

- Five major pre-process steps: coating and developing, dry etching, deposition, cleaning, and probe station

- Global market share in coating and developing: >90%, ranked first globally

- Core conclusion: The semiconductor equipment ecosystem in Japan cannot be replicated in any other region

Taiwan, China – Taiwan Semiconductor

Dominates pricing power in advanced processes $Taiwan Semiconductor (TSM.US)$ $Taiwan Semiconductor (TSM.US)$ Pioneering a professional OEM model,With unique bargaining power, cost increases are passed on to customers, leading to annual growth in revenue and gross marginsBecoming the core anchor of Taiwan region's index.

Fourth, verification of AI commercial closed-loop, upstream hardware demand certainty continues to be released (00:27:28 ~ 00:38:54)

The market’s skepticism over AI ROI at the beginning of the year has been temporarily dispelled. The rapid rise in daily token usage for DouBao large models shows that computing power demand is entering a fast-growth lane, a trend that will eventually be transmitted upstream to semiconductor hardware.

- OpenAI ARR: Expected to exceed 20 billion USD; 2031 target surpassing 100 billion USD

- Anthropic ARR: Already exceeding 30 billion USD, surpassing OpenAI

- Transmission logic: Increase in AI application token consumption → Increase in cloud computing demand → Increase in upstream chip/memory/equipment demand

- Core conclusion: Asia's semiconductor industry as a whole remains in the upward channel of high prosperity, with orders expected to continue exceeding expectations

Selected Q&A

Q: What is the actual impact of the MATCH Act on the capacity utilization rates of Hua Hong and SMIC?
A:$HUA HONG SEMI (01347.HK)$Core competitiveness focuses on mature process nodes, while the Act primarily targets a full-chain blockade of advanced process nodes, having a relatively limited impact on Hua Hong. More importantly, the Act has inversely heightened the urgency for domestic substitution.$SMIC (00981.HK)$As a key supplier in breakthroughs for advanced processes, they also stand to benefit. The share of domestically produced semiconductor equipment has increased by 10 percentage points within a year, significantly alleviating 'bottleneck' conditions.

Q: How will the trend changes in GPU/CPU ratios benefit Asian semiconductors through expanding CPU demand?
A:$NVIDIA (NVDA.US)$The data throughput speed of Blackwell GPUs far surpasses CPU processing capabilities, making CPUs the new focal point of computational bottlenecks. Market consensus is shifting from the traditional 1:8 (CPU:GPU) ratio towards a 1:1 ratio.$Intel (INTC.US)$This year’s YTD surge reflects the market pricing in this new consensus.Large-scale capex plans for AI chips self-developed by overseas cloud vendors will ultimately rely on Asia's semiconductor industry clusters for manufacturing, continuing to boost upstream demand.

Q: How will the pace of price increases differ between DRAM and NAND in 2026?
Enterprise-grade DRAM (especially HBM) and enterprise-grade NAND are both in a steep and continuous price increase channel, butconsumer-grade DDR4/5 and consumer-grade NAND prices have experienced significant volatility, with a phase of decline already observed in the second half of 2025. The core component stocks of the Asian Semiconductor Index$SK Hynix (000660.KR)$ are primarily priced in line with HBM trends. SK Hynix management has repeatedly emphasized during conference calls that the steep upward trajectory of HBM pricing can be sustained, with long-term agreements signed at upward-floating prices.

Q: Shipment forecasts for consumer electronics are expected to decrease by 10% to 11%. If consumer-grade DDR enters an adjustment phase, should we be cautious about its impact on EPS?

A: Prices for consumer-grade DRAM/NAND fluctuate within a certain range rather than experiencinga continuous decline. At present, this is not enough to constitute a major drag on stock prices.The fluctuations in consumer-grade products remain a variable that needs to be continuously monitored, but they have yet to alter the core direction of the overall investment thesis.

The above content is AI-assisted and is for reference only. It does not constitute investment advice.

249K Views