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ChangXin Technology’s 5th-generation process platform enters mass production: At the World Manufacturing Convention on September 20, ChangXin Technology (688825.SH) announced the official mass production of its 5th-generation process technology platform and showcased high-capacity LPDDR5X products built on this platform, marking another milestone in the generational advancement of domestic DRAM. (The company notes large-scale sales have not yet been achieved.)
Samsung pivots memory strategy toward HBM: Samsung Electronics will outsource new capacity for DDR5 and SSD, and dedicate all in-house capacity to HBM. The memory supply-demand structure is further shifting toward high-value-added products, while supply elasticity for commodity memory weakens.
Hundred-billion-yuan-scale expansion of domestic IC substrates: On September 19, Advanced Semiconductor’s second Shenzhen campus, a smart manufacturing base for high-end IC substrates, broke ground. Planned total investment is no less than RMB 12 billion. The project focuses on FCBGA substrates for AI, HPC and network communications.
Silicon wafers: depreciation headwinds alongside price hikes. Jiwei’s in-depth analysis shows SUMCO posted a JPY 6.3 billion loss in H1, Siltronic’s depreciation rose 89.4% YoY, while only GlobalWafers recorded a 42.4% profit increase. Meanwhile, negotiations for a 10%–15% price increase for 12-inch silicon wafers have kicked off. Global monthly demand for 12-inch wafers will reach roughly 10 million pieces in 2026, with a supply gap of around 1.5 million pieces.
Optical interconnect evolves toward NPO / 6.4T: NewPhotonics and Tower Semiconductor have mass-produced laser-integrated optical engine PICs (800G–1.6T) based on the PH18DA platform, with 6.4T NPO chip sets scheduled for volume shipment in H1 2027. Shenghong Technology holds full order books for its mSAP capacity, primarily supplying 1.6T optical modules.
In-depth Analysis
Optical Communications / Optical Chips: Tower Semiconductor and NewPhotonics announced high-volume shipments of laser-integrated, serviceable optical engine PICs built on the heterogeneous integrated Indium Phosphide (InP) PH18DA platform. The platform monolithically integrates lasers, SOAs, modulators and photodetectors, supporting FRO/LRO/LPO as well as socketed pluggable NPO solutions compliant with the CPX-MSA standard. Mass-produced products support 800G–1.6T, while the 6.4T NPO chipset NPC505 is scheduled for volume shipment in H1 2027. Domestically, Shenghong Technology disclosed its Huizhou mSAP workshop capacity is dedicated to meeting production demand for 1.6T optical modules with healthy order backlogs. Fulltech stated it supplies DPC products to TEC vendors, indirectly supporting optical module manufacturers. CITIC Securities recommended on September 20 seizing the final offensive window within the year; within tech sectors, top picks include new optical communication technologies and PCB players benefiting from rising manufacturing complexity.
Advanced Packaging & Testing：On September 19, the intelligent manufacturing base for high-end IC substrates at the second campus of Advanced Semiconductor Technology (Shenzhen) broke ground in Bao’an. Planned total investment stands at no less than RMB 12 billion across multiple planned fabs, with a primary focus on FCBGA IC substrates for AI, HPC and network communications. Bao’an District hosts more than 135 PCB-industry-chain enterprises. Separately, TrendForce projects TSMC’s CoWoS-L will remain the mainstream packaging solution for AI chips through 2028 thanks to its maturity and yield advantages. Morgan Stanley forecasts China’s advanced packaging market to hit RMB 100 billion by 2029, with equipment vendors outperforming packaging & testing houses. No major new developments emerged today for domestic materials such as ABF films and CBF.
SiC / Power Semiconductors: No major updates today. Recent milestones including 1400V automotive-grade SiC main drives from Xinyueneng and Xinjuneng entering vehicles, and the ramp-up of 8-inch epitaxy at Hantec, have been covered in prior briefings.
Memory & Compute Chips: ChangXin Technology launched mass production of its 5th-generation process platform and exhibited high-capacity LPDDR5X products. Samsung Electronics will outsource new capacity for DDR5 and SSD, and fully allocate in-house capacity to HBM. Nscale, a UK AI cloud service provider backed by NVIDIA, filed its S-1 with a target valuation of up to USD 35 billion (ticker: NSCL). NVIDIA has invested more than USD 2 billion and signed a USD 1.2 billion capacity lease agreement. Jiwei Net reported Longsys’ Hong Kong IPO traded below its issue price on the first trading day.
Equipment & Materials: Jiwei Net’s in-depth analysis examines the “capacity time lag” among global silicon wafer giants. SUMCO swung from a JPY 7.4 billion profit to a JPY 6.3 billion net loss in H1. Siltronic’s depreciation rose 89.4% YoY, pushing net profit to a loss of EUR 104.3 million. By contrast, GlobalWafers posted a 42.4% profit increase to TWD 2.898 billion. SUMCO confirmed depreciation will peak this year. On the demand side, global silicon wafer shipments reached 3,573 million square inches in Q2 2026 (+7.4% YoY). A single AI server consumes roughly 3.8 times more 12-inch silicon wafers than a general-purpose server, and HBM wafer consumption is triple that of conventional DRAM. HBM wafer consumption is projected to rise 23% next year and advanced logic wafers +12%, while 300mm capacity will increase by only about 3%. On pricing, major wafer manufacturers are negotiating supply prices for next year, centered on a 10%–15% hike, most notably for 300mm wafers. In addition, Beijing Economic and Technological Development Zone released a special policy for new materials, designating semiconductor materials as critical strategic materials.
Wafer Fabrication: No major new updates today. TSMC’s Longtan 1.4nm capacity expansion and upward revision of 2026 capex to USD 60–64 billion were covered in earlier briefings.
Policy & Macro Environment: He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, led a delegation to the US for economic and trade consultations from September 19 to 23. Guangdong Strategic Emerging Industry No.1 Investment Partnership was established with subscribed capital of approximately RMB 16.5 billion, jointly held by Phase II of Guangdong Provincial IC Industry Investment Fund and other investors. A wholly-owned subsidiary of CATL took equity stakes in Jinshajiang Electronics, a developer of new materials and semiconductors. After the Fed’s 25bp rate hike, market pricing focus has shifted back to industry fundamentals, and AI hardware stocks staged a counter-trend rally.
Daily Investment Tips
1. Watch the structural divergence within memory: Samsung outsources DDR5 and SSD production and concentrates its capacity on HBM. Combined with the ramp-up of ChangXin’s 5th-generation process, the supply elasticity of DDR5 and HBM shows divergent trends. HBM and its upstream supply chain (silicon wafers, packaging & testing, substrates) feature stronger conviction than commodity memory. Still, beware of valuation pressure on growth stocks amid rate hikes amid stretched valuations.
2. Substrates and silicon wafers represent a clear volume-price synergy track. Advanced Semiconductor’s RMB 12 billion FCBGA project has been launched. Negotiations for a 10%–15% price increase for 12-inch silicon wafers are underway alongside a monthly supply gap of 1.5 million wafers. Domestic material and equipment vendors enjoy high order visibility. The risk lies in the erosion of short-term profits from incremental depreciation at wafer manufacturers; monitor the ramp pace of capacity utilization rates.
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