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Industry Prosperity to Last through 2028: As reported by Shanghai Securities News on September 29, institutional investors conducted intensive surveys of 221 electronics and semiconductor firms in September, with leading players across PCB and semiconductor subsegments drawing the most attention. Industry chain feedback indicates segments including PCBs and semiconductor equipment components remain in a state of firm pricing, full capacity utilization and capacity expansion. The robust boom in electronics and semiconductors is expected to extend into 2028.
Accelerated Re-rating of Advanced Packaging: An in-depth report by Jiwei.com on September 29 notes that Yole has revised up its forecast for the global advanced packaging market, projecting growth from approximately USD 55 billion in 2025 to over USD 120 billion by 2031, representing a CAGR of around 14%. TSMC’s monthly CoWoS capacity will reach roughly 130,000 wafers by end-2026, with a supply-demand gap of 10%–20%. NVIDIA is reportedly locked in for about 60% of TSMC’s 2026 advanced packaging capacity.
Substrates Emerge as the “Second Bottleneck”: Goldman Sachs estimates the ABF substrate supply gap at ~10% in 2H2026, ~21% in 2027 and ~42% in 2028. Ajinomoto raised ABF film prices by roughly 30% starting in Q3 2026; Nittobo increased T-glass prices by 20%–30%, with lead times extended from 8–10 weeks to over 20 weeks. Samsung Electro-Mechanics announced on September 28 an investment of KRW 4.27 trillion (approximately USD 3 billion) to expand packaging substrate capacity at its Sejong plant.
Faster Rollout of Advanced Nodes: TSMC’s monthly 2nm capacity may hit 120,000 wafers by year-end, exceeding the prior estimate of 90,000–100,000 wafers. Orders from clients including Apple, NVIDIA and AMD rose by 10%–20%. VSMC, its affiliate, saw its first Singapore wafer fab fully booked immediately upon launch, with initial yield ≥99%; evaluation is underway for a second fab.
Rising Bargaining Dynamics for Memory & HBM: Jensen Huang met with Samsung’s Lee Jae-yong and SK Hynix’s Choi Taewon in New York on September 28, with HBM as the core discussion topic. Samsung aims to penetrate AI chips via an integrated offering of “memory + wafer foundry + advanced packaging”. Micron will release its FY26 Q4 earnings after market close on September 30.
In-depth Analysis
Optical Communications / Optical Chips：The Hong Kong and A-share optical communications sectors saw a sharp pullback on September 28. Yangtze Optical Fibre and Cable slumped over 16%, while Innolight and Cambridge Technology dropped roughly 12%. Innolight topped the list with net main fund outflows of RMB 3.047 billion, reflecting short-term profit-taking at high valuation levels.
On fundamentals: Unisplendour Corporation disclosed that its CPO switches, super-node products and full-stack computing networking products have been delivered in volume, with deep participation in the construction of multiple intelligent computing centers. Its H1 net profit attributable to parent rose 108.18% year-on-year. Photonic chip firm Jiuwei Photonics completed tens of millions of RMB in angel-round financing. Jiwei.com’s in-depth analysis forecasts mass production of CPO switches starting in 2026, with optical engine yield and advanced packaging capacity as primary bottlenecks; large-scale volume ramp is expected for 2027–2028.
Advanced Packaging & Testing：Jiwei.com published an in-depth report titled From Backend Process to Main Battlefield of Computing Power, offering key quantitative figures: TSMC’s monthly CoWoS capacity will rise from 35,000 wafers at end-2024 to approximately 130,000 wafers by end-2026, and is projected to double to around 260,000 wafers by end-2028. Still, the supply gap will only narrow from roughly 20% to 10%. TSMC’s advanced packaging revenue will exceed USD 20 billion for the first time in 2026. ASE raised its 2026 advanced packaging quotations by over 20% again and lifted capital expenditure to a record USD 10.5 billion.
Domestically, Shennan Circuits has mass-produced FC-BGA substrates of 22 layers and below, while samples for products above 24 layers are under customer testing. Shenzhen Fastprint Circuit Tech’s 14–20 layer substrates have passed qualification by leading computing power clients. Zhejiang Huzheng New Material’s ABF-like build-up film (CBF) has been supplied to domestic substrate manufacturers, and Shengyi Technology’s ABF-like film is undergoing customer verification. However, the localization rate of advanced packaging bonding equipment remains below 5%.
At company level: Pulnuo, a subsidiary of Chongda Technology, obtained the real estate title certificate for its end-user functional IC packaging substrate project (total investment of RMB 1 billion). Liyang Chip removed the “Heterogeneous Stack Advanced Packaging Process R&D Project” from its private placement fundraising scope, cutting fundraising size to RMB 870 million. Shengyi Electronics plans to inject RMB 1.1 billion capital into Ji’an Shengyi to expand high-layer computing power circuit boards.
SiC / Power Semiconductors: No major new developments today. Focus on Lianxin Integrated, which guided H1–H3 2026 revenue of approximately RMB 7.766 billion (+43.23% YoY) and net profit attributable to parent of RMB 681 million, turning profitable year-on-year. Q3 net profit reached about RMB 403 million, up 9% quarter-on-quarter, with scale effects continuously released for automotive-grade power and SiC businesses.
Memory & Compute Chips: Montage Technology announced mass production of its 5th-generation DDR5 Registered Clock Driver chip (RCD05), targeting high-performance DDR5 RDIMM and AI servers. Yuanlin Co., Ltd. plans to acquire a 93.5% stake in Hualan Micro, a memory controller and module vendor, to enter the domestic memory chip sector by cross-industry acquisition. US memory stocks broadly declined on September 28, with Micron, SK Hynix and SanDisk all down. Micron’s earnings release on Wednesday, September 30, serves as a key observation window.
Equipment & Materials: CEMIA data shows China’s photoresist market reached RMB 19.806 billion in 2025 (+23.2%), among which IC photoresist stood at RMB 6.637 billion. The segment is projected to hit RMB 7.794 billion in 2026 (+17.43%). Qingyi Optronics delivered 55nm PSM phase-shift masks and the products have entered customer on-site qualification. Huchuangxin Micro signed an agreement to locate its electrostatic chuck headquarters project in Wuxi High-tech Zone. Hymson plans to raise no more than RMB 2.263 billion for AI computing power, solid-state batteries and other initiatives.
Wafer Fabrication: Besides TSMC’s upward revision of 2nm capacity, VSMC — the joint venture between TSMC affiliate VIS and NXP — kicked off trial production at its Singapore fab in June and targets mass production in early 2027. It will help TSMC manufacture critical interposers for AI customers including NVIDIA, Google and Broadcom. Hong Kong-listed chip stocks traded lower on September 28; Hua Hong Semiconductor fell more than 4% and SMIC dropped over 3%.
Policy & Macro Environment: This week’s State Council executive meeting called for stronger counter-cyclical macro policy adjustments and research on reserve policies to boost domestic demand. The China-US AI dialogue mechanism has been established. In markets: The 10-year US Treasury yield rose above 5.27%, hitting the highest level since 2007, while the 30-year yield set a new high since 2002. The Nasdaq declined 0.92% overnight and the Philadelphia Semiconductor Index fell 3%. A-shares will be closed from October 1 to 7. The September official PMI figure scheduled for release on September 30 is a key pre-holiday indicator.
Daily Investment Tips
1. Opportunities: Advanced packaging is evolving from a “backend manufacturing step” into the primary battlefield for computing power. Supply shortages will widen in 2027–2028 for segments including ABF substrates, ABF-like build-up films (CBF/NBF), T-glass fiberglass cloth, and TCB/hybrid bonding equipment, with supply heavily concentrated (Ajinomoto and Nittobo hold near-monopoly positions). Validation and volume ramp progress for domestic substrate vendors (Shennan Circuits, Fastprint Circuit Tech) and material suppliers (Huazheng New Material, Shengyi Technology) warrant priority monitoring.
2. Risks: The US Philadelphia Semiconductor Index dropped 3% in a single session, while optical communication and memory sectors pulled back from elevated levels. Combined with shrinking trading volume in A-shares ahead of the long holiday and valuation pressure from surging US Treasury yields, sentiment-driven pullbacks in high-beta names should be watched closely. In addition, a below-consensus Micron earnings print on September 30 could amplify volatility across the memory supply chain.
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