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TSMC reported August revenue of NTD 514.8 billion, representing a 53.3% year-on-year increase, hitting a new monthly record and rising for four consecutive months. According to TrendForce, the combined output value of the world’s top ten wafer foundries reached USD 53.49 billion in Q2, up 11.5% quarter-on-quarter and setting another all-time high, as demand for advanced AI processes continues to materialize.
Overnight, memory stocks led declines on US equities (SK Hynix down over 5%, Micron nearly 5%, the Philadelphia Semiconductor Index down more than 2%, Intel over 5%), driven by profit-taking after the prior rally. NVIDIA’s Rubin Ultra plans to reduce HBM stacking from 12 layers to 8 layers for cost control, passing upward pressure from memory price hikes onto upstream computing systems.
The Shenzhen Advanced Materials Innovation & Development Conference on September 9 focused on AI heterogeneous integration packaging. Industry sources state that packaging costs for AI compute chips now account for over two-thirds of total chip costs. 2026 is regarded as the first year of CPO, with low-temperature copper hybrid bonding and photomasks emerging as core targets for domestic substitution.
Optical Communications: Hailight entered a strategic cooperation with GlobalFoundries to advance mass production of 6.4T NPO (small batch rollout in H2 2026, scaled production in 2027). 3PEAK’s supporting solutions for CPO/NPO and ELSFP have passed customer validation.
Macro: US August PPI rose 5.4% year-on-year, above consensus estimates. The ECB raised rates by 25 bps. The probability of a Fed rate hike in September climbed to 71.3%. Surging US Treasury yields suppressed risk appetite.
In-depth Analysis
The industrial chain rolled out a slew of releases during CIOE. Exclusive from Jiwei Web: Hailight announced on September 7 a long-term strategic partnership with GlobalFoundries. Leveraging its silicon photonics process and global production capacity, the two parties will develop 3.2T / 6.4T NPO products. Samples of the 6.4T NPO optical engine have been packaged and sent to leading customers. Small-batch production is slated for H2 2026, with scaled delivery in 2027, building a dual-track manufacturing system covering domestic and overseas markets. 3PEAK showcased a full portfolio of analog chips for optical communications, supporting 800G / 1.6T pluggable modules (compatible with both silicon photonics and EML routes), CPO/NPO co-packaged optics and ELSFP external light source solutions. Its CPO/NPO and ELSFP solutions have both passed customer validation. Industry estimates show CPO can cut power consumption by 25%–30% compared with pluggable modules. No other major updates today.
Advanced Packaging & Testing：The Advanced Materials Innovation & Development Conference (Sep 9, IICIE sub-forum in Shenzhen) delivered abundant insights. The Shenzhen Institute of Advanced Electronic Materials pointed out that packaging accounts for over two-thirds of total costs for AI compute chips. Yole forecasts mass-scale CPO takeoff as early as 2028 and no later than 2030. Anji Microelectronics and City University of Hong Kong separately unveiled fine-grain copper and low-temperature copper hybrid bonding solutions (200°C, 2 MPa, 30 minutes, with 8-inch effective conductivity of 88.2%). On the materials side, Huahai Hitech posted H1 revenue growth of 162% YoY after consolidating Hengsu Huawei. Guotai Haitong initiated coverage on ASMPT with an Overweight rating and a target price of HKD 233, expecting its TCB and hybrid bonding technologies to benefit from HBM and Chiplet. No major new developments for ABF films or IC substrates today.
SiC / Power Semiconductors: Unigroup Guowei disclosed that Ruineng Semiconductor, which it plans to acquire, holds the largest global market share for SiC rectifiers among Chinese manufacturers. At the Advanced Materials Conference, PowerAmerica projected that SiC/GaN power chips will capture over 25% of the power chip market by 2030, and warned that “silicon packaging technology is no longer sufficient for high-voltage high-power SiC/GaN”. Efficiency of 800V DC architecture can be lifted above 90%. China’s SiC sector remains in a phase of price adjustment and inventory clearing; no material new updates today.
Storage & Compute Chips: Memory stocks pulled back sharply overnight: SK Hynix down over 5%, Micron nearly 5%, Western Digital/SanDisk down over 4%. NVIDIA is considering reducing HBM stacking layers from 12 to 8 for Rubin Ultra to optimize per-bandwidth cost. Broadcom disclosed remaining performance obligations of approximately USD 179.2 billion (around 25% to be recognized within the next 12 months), reflecting strong visibility for custom ASIC demand. Microsoft plans to triple its data center capacity to 38 GW. NVIDIA reported Grace Blackwell shipments rose 27% quarter-on-quarter.
Equipment & Materials: TSMC posted August revenue of NTD 514.8 billion, up 53.3% YoY. Its cumulative revenue for the first eight months reached NTD 3.38 trillion, a 39.3% YoY increase. No major fresh updates for photoresist, electronic specialty gases, silicon wafers and other segments today.
Wafer Fabrication: TrendForce reported that the combined output value of the world’s top ten foundries hit a new high of USD 53.49 billion in Q2. At its earnings briefing, Nexchip stated capacity utilization remains high with sufficient order backlog. Its Phase IV project has entered cleanroom renovation, and equipment procurement will proceed as scheduled. The Standardization Administration of China released 298 national standards, including 26 standards covering semiconductor devices and integrated circuits to strengthen industrial chain resilience.
Policy & Macro Environment: US August PPI rose 5.4% YoY, above market expectations. The ECB hiked rates by 25 bps. CME data pegged the probability of a 25bp Fed rate hike in September at 71.3%. The 10-year US Treasury yield hit an intraday high since October 2023. The US issued a cybersecurity notice targeting AI “distillation” involving China. China’s Ministry of Commerce responded with firm opposition, stating the move aims to monopolize computing power and suppress competition.
Daily Investment Tips
1. Risks: Memory and optical communication sectors have seen substantial gains in the prior period. The overnight collective pullback of US-listed memory supply chain names, coupled with surging US Treasury yields and rising rate-hike expectations, amplifies near-term volatility for high-valuation hardware stocks. Caution is warranted over profit-taking and rotation between high and low-valued segments. NVIDIA’s reduction of HBM stacking layers may marginally weigh on HBM demand expectations.
2. Opportunities: AI heterogeneous integration packaging materials (hybrid bonding, low-temperature copper, photomasks, CPO packaging materials) feature extremely low domestic localization rates. The segment is shifting from policy-driven growth to supply-demand resonance. The Shenzhen Advanced Materials Conference delivered clear industrialization signals. Focus on STAR Market material players with customer validation and mass-production breakthroughs. The long-term trend for NPO/CPO in optical communications remains intact; upstream materials such as indium phosphide and silicon photonic SOI merit tracking.
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