01

Company Trend（April 14）

TSMC is accelerating fab construction in USA, rumor says

According to the latest news, TSMC is speeding up the process of building wafer fabs in the USA. Peter Cleveland, senior vice president of TSMC, said that TSMC Arizona is building the second advanced process wafer fab and plans to build a third wafer fab as soon as possible. In addition, TSMC has increased its investment in USA from US$65bn to US$165bn to build three fabrication plants, two advanced packaging facilities, and a large R&D team center.

In particular, the construction of TSMCs Fab 21 project in Arizona is going forward. Of which, the Phase I fab (N4 process) is expected to be put into operation in 2025, the Phase II fab (3nm process) is planned to start pilot production in 2026 and mass production in 2028, and the Phase III fab (2nm process) is expected to commence pilot production in 2028 and mass production in 2029. In addition, TSMC plans to set up two advanced packaging plants in the USA, and now has begun to place orders with advanced packaging equipment suppliers in Taiwan.

This expansion of TSMC comes against the backdrop of the Trump administrations possible tariff on semiconductor chips. TSMCs major US customers such as Apple, Nvidia, AMD, and Qualcomm all hope to increase their manufacturing ratios in the USA to reduce the cost pressure from tariff.

Comments: Although TSMCs plan to build fabs in the USA will result in significant upfront investment costs, this move will help it build stronger production capacity and customer relationships in the US market in the long run while reducing its dependence on a single region. TSMC plans to introduce advanced processes into the USA, but its most advanced packaging technology and R&D capabilities remain at its headquarters in Taiwan. Such a strategy of TSMC can meet the needs of US customers and avoid excessively impairing its Taiwan headquarters core competitiveness. With this balance, TSMC is able to maintain its technological leadership in the global market and meet the needs of customers from different regions. In addition, TSMCs plan to expand its production in the USA may lead to adjustments in the global semiconductor supply chain. Samsung, the main rival of TSMC, also plans to increase its advanced packaging capacity, while ASE Technology and other packaging firms are responding actively to this regard. Such adjustments will drive the reorientation of the global semiconductor industry and an optimal allocation of related resources.

02

Market Trend（April 15）

How expensive the next-gen EUV lithography machine will be?

As the semiconductor industry continues to seek smaller process nodes, EUV (Ultra Violet lithography) technology is becoming increasingly important. Currently, the only company in the world that can manufacture EUV lithography machines is ASML in the Netherlands, and its latest High-NA EUV lithography machine has become the focus of the industry.

ASMLs next-gen High-NA EUV lithography machine (e.g. EXE: 5000 model) is priced at €350mn, which equals to about RMB2.7bn. This price is almost double the current price of 0.33NA EUV lithography system (priced at ~USD181mn). According to ASML senior executives, EUV lithography system with NA=0.55 will be mass produced in 2025.

The numerical aperture of High-NA EUV lithography machine has increased from 0.33 to 0.55, enabling higher resolution and supporting mass production of chips of 2 nm and even smaller process nodes. This technological progress empowers chipmakers to integrate more transistors on a smaller chip area, thus improving its performance and energy efficiency. High equipment price generates a very heavy cost burden. Chipmakers such as Intel, TSMC and Samsung have shown strong interest in the High-NA EUV lithography system, but they still need to carefully weigh their purchases. For example, TSMC plans to give up using the High-NA EUV lithography system for its 1.6 nm process node to be launched at the end of 2026 to avoid excessive cost burdens.

As the first chipmaker to purchase High-NA EUV lithography machines, intel has installed and used two machines in its facility in Oregon, primarily for R&D. While the High-NA EUV lithography machine can significantly increase chip manufacturing capability, its high cost is prohibitive for many chipmakers. For example, Samsung did not mention the High-NA technology in its latest SF1.4 node promotion, showing its concern about the costs.

Comments: The birth of High-NA EUV lithography machine is a major breakthrough in terms of semiconductor technology. It is capable of supporting fabricating chips of smaller process nodes, thus laying the foundation for future HPC and Ai applications. However, its high price is a huge burden for chipmakers. Related companies must seek a balance between technology leadership and cost containment to prevent their profitability from being impaired due to overinvestment.

ASMLs monopoly in the EUV lithography system sector enables it to dominate market pricing. Although the high price of the High-NA EUV lithography system may limit its market penetration in the short run, its technological advantages will strengthen ASMLs position in the high-end semiconductor equipment market in the long run. Chipmakers such as Intel, TSMC, and Samsung have differentiated their strategies for purchasing High-NA EUV lithography systems. Intel is aggressive in making its layout while TSMC and Samsung are more cautious, which may affect the landscape of the future market to some extent.

The high price of the next-gen High-NA EUV lithography system poses a challenge during its promotion, but its technological advantages also bring new promise to the semiconductor industry. Chipmakers and equipment suppliers need to balance technological innovation and cost control to advance the sustainable growth of the industry.

03

Company Trend（April 15）

Intel sells stake in Altera

Intel has agreed to sell a 51% stake in its Altera programmable chips unit to Silver Lake, a tech-focused private equity firm, to fulfill its plan to divest its non-core assets. According to a statement released on Monday, the deal values Altera at US$8.75bn, about half of the acquisition price paid by Intel ten years ago. Intel will continue to hold a 49% stake in Altera. It is expected that the deal will be completed in H2 2025. Previously, Bloomberg released a report on the negotiations between the two companies. According to insiders, as part of the deal, Intel will receive approximately US$3.4bn in cash from Silver Lake.

After taking office, Lip-Bu Tan made it clear that Intel would divest its mission-independent assets and focus on AI-specific chips and foundry business. The sale of its stake in Altera may be aimed at reducing Intel’s resources allocated for non-core operations so that it can focus on areas with more potential and competitiveness. In recent years, Intels competitiveness in the chip market has declined due to fierce challenges from its rivals such as TSMC, AMD, and Nvidia. By selling its stake in Altera, Intel can free up capital and resources to strengthen its presence in the areas of AI chips and foundry. The sale of its stake in Altera is expected to generate significant cash flow for Intel, improve its financial position, and reduce its operating costs and risks.

Comments: With the rapid development of AI technology, the market demand for HPC chips is increasing. By selling its stake in Altera, Intel is able to better respond to market changes and seize new growth opportunities by investing more resources in AI chips and foundry business. This move is an important step in Intels strategic alignment, helping to optimize its resource allocation and improve its competitiveness in key areas. After selling its stake in Altera, Intel needs to consolidate and optimize its remaining business, which may face certain challenges. How to secure synergies between its businesses and avoid wasting resources and inefficiencies is an important issue to be addressed by Intel. Meanwhile, this strategic shift of Intel reminds other companies to stay focused on their core competencies in the market competition. In addition, it is necessary for industry players to continuously increase investment in R&D and promote technological innovation to adapt to the changes and needs of the market.

04

Policy Trend（April 16）

Break news! Export of Nvidia H20 to China is banned

According to the latest regulatory documents, the US Commerce Department has officially notified Nvidia to follow an open-ended export licensing approval mechanism when applying for exporting high-performance H20 chips to China from this week. The US government stressed that the measure was aimed to address the potential risk that "controlled technology may be used for or transferred to supercomputing equipment located in PRC." Due to the direct impact of the policy, it is expected that Nvidia will make a provision for special expenses of approximately US$5.5bn in its Q1 financial statements (as of April 27), primarily to address such items as adjustments of H20 chip inventory, changes in long-term supply commitments and compliance reserves.

Although the industry previously expected that the Trump administration would take a new round of measures to restrict the export of Nvidia H20 chips, insiders revealed that the White House may ease the policy following a meeting between the US President Donald Trump and Nvidias chief executive Jensen Huang at a dinner at Mar-a-Lago in Florida last week and that the outside world believed the long-awaiting restrictions may be postponed. However, the regulatory game involving deals of billions of dollars ended in a dramatic turn – the export control rule finally came into effect after months of preparation. The special export licensing system for sales for China was launched on April 9 and was upgraded to an open-ended control rule on April 14.

Comments: Although Nvidia has strong technological advantages in the field of AI chips, the US export restrictions prevent it from fully utilizing the demand of the Chinese market to advance technological innovation and scale economy. This may weaken its competitiveness in the global AI chip market. As Nvidias business in China accounting for 13% of its total revenue, the export restrictions will cause a significant decline in its market share and a sharp drop of its revenue in China. At the same time, Nvidia has to adjust its global supply chain and sales strategy to respond to this change, which will increase its operating costs and complexity. The export ban of H20 chips will cause Chinese AI companies to face the shortage of hardware supply, especially those that rely on Nvidia chips for training their models. For instance, some companies such as ByteDance, Alibaba and Tencent previously purchased a large number of H20 chips to train their AI models. In the short run, these companies may need to adjust their AI development programs and find alternatives.

05

Domestic News（April 14）

Chinese chip giant: no fear of high tariffs imposed by USA

According to the report by South China Morning Post, several Chinese listed companies informed investors that the tariffs imposed by the USA during the recent trade war have no impact on their business, mainly because they had previously been unable to sell products to the USA due to sanctions. Although China has many world-class high-tech companies with competitive products in the international market, sanctions in recent years have blocked Huawei and Loongson from selling products in foreign markets. The report summarized a number of investor-specific reports provided by Cambricon (AI chip), Loongson (CPU), Leaguer Microelectronics Corp. (IoT IC), Longsys Electronics (a storage system manufacturer) and Maxscend Microelectronics (RF chip) all stated that their business would not be impacted by the high tariffs imposed by the US government.

The trade war promotes Chinese companies to re-examine their supply chain layout. Some companies have chosen to move their production lines to Southeast Asia, India and other places to reduce costs, but they still face risks such as tariffs. This suggests that global supply chains are undergoing a restructuring, and related companies have to seek balance between costs and risks.

Industrial upgrading and innovation: The trade war forces companies to carry out technological innovation and industrial upgrading. By increasing the added value of their products and optimizing their supply chain management, relevant companies will become more competitive in the global market. For example, the domestic high-tech industry has reduced its dependence on US technology through independent R&D and technological innovation and seeks to develop markets in Europe, Japan and South Korea.

06

Domestic News（April 16）

Melexis China strategy highlights full localization of supply chain

According to the news of the official WeChat account of Melexis, on April 16, Melexis officially announced the future plan of its China strategy: based on its existing business base in China, the company will additionally set up local logistics centers to achieve fully localized manufacturing.

It is learned that since the beginning of 2024, Melexis has actively made its layout and successfully set up a local outsourcing semiconductor assembly and testing (OSAT) partner system to enhance its local service efficiency. As a key part of its strategic expansion, Melexis, after completing a rigorous screening process in late 2024, added a new Chinese semiconductor wafer fabrication partner, and has started the production process of products customized for the Chinese market in the plant of the partner. Currently, the relevant products are in the development stage and they are expected to be officially launched in H1 2026.

Melexis’ vice president of China Strategy said: "These moves will continue to advance and expand the strategic blueprint of Melexis in China. In 2024, Melexis signed a cooperation agreement on promoting local production comprehensively. The agreement will bring a substantive breakthrough in early 2026: A new product made by Chinese wafer vendors will be officially launched, which means that the lead time of the product will be significantly shortened. In this fast-growing market, Melexis has received positive feedbacks from our existing customers with our series of layout."

07

Domestic News（April 17）

DATSSD unveils enterprise-grade SSD

Recently, Datang Storage Technology Co., Ltd. (DATSSD) officially unveiled its new enterprise-grade SATA Solid State Drive (SSD) - DTS510S60 and DTS510S63 series. The launch of this series of new products marks an important step of the company in the enterprise-grade storage field, further consolidating its position in the domestic storage market.

DTS510S60 and DTS510S63 series employ DSS510 chip developed by DATSSD and are equipped with the latest Xtacking ® X4-9060 architecture storage chips. The application of these technologies enables the new product to achieve industry-leading performance and reliability. These series support the SATA 6.0Gbps interface standard with capacity ranging from 480GB to 7.68TB and can meet the needs of a variety of enterprise-grade applications.

As the first fully homemade read & write mixed SATA enterprise-grade X4 SSD with DWPD ≥ 3 , DTS510 series has outstanding performance in terms of durability, versatility, and compatibility, better than most similar products in the market. This makes the product series better adapt to scenarios of demanding high-performance computing capacity such as data centers, cloud computing platforms, and high-performance computing.

In addition, DATSSDs enterprise-grade storage business grew significantly in 2024 and it has established partnerships with well-known companies such as China Mobile. The release of its new DTS510 series not only further expands its product line but also gives it a strong support to explore the enterprise storage market.