From October 20 to 22, along the banks of Shanghai's Huangpu River, the 2026 Sustainable Global Leaders Conference will return once again. Nobel Prize and Turing Award laureates will take the stage to discuss the future and trends of technology, and the internet-famous professor who "rescues" people from anxiety and the era of involution — Macfarlane — will hold a live dialogue with Xiang Biao!
Limited seats available, first come first served. Let us journey together toward a sustainable future!
CLSA has issued a research report stating that thanks to strong AI demand and accelerating domestic substitution, orders and capacity utilization rates at AI PCB, wafer foundry, equipment, and AI computing chip companies within China's semiconductor supply chain remained at high levels in the third quarter, with profitability continuing to improve.
The report points out that although upstream component shortages have slowed delivery progress in the short term, CLSA expects the upstream supply-demand dynamics to gradually improve from the fourth quarter of this year through 2027, which will also boost corporate revenues.
The firm prefers targets with high AI exposure, strong fundamentals, and potential for domestic substitution.
The firm believes the PCB/copper-clad laminate sector has the strongest fundamentals. Driven by accelerating AI PCB shipments, combined with price increases on traditional products, structural optimization, and capacity release, its profitability is expected to improve significantly in the third quarter. In wafer foundry, driven by AI chip demand, overseas order回流, and local manufacturing, capacity is fully loaded and average selling prices are rising quarter by quarter, but new capacity construction and advanced process depreciation will suppress margin space in the short term.
On individual stocks, SMIC is benefiting from product pricing and mix optimization as well as yield improvement, with strong growth momentum in the third quarter and a positive outlook. Hua Hong Semiconductor has third-quarter revenue guidance of $770 million to $780 million, with backlog orders reaching 1.5 to 2 times existing capacity. Its average selling price is expected to increase by another 10%-15% by the end of 2026, with room for further price increases next year. Additionally, driven by downstream recovery and volume ramp-up of AI server power products, the firm expects NOVOSENSE third-quarter revenue to surge 72%-84% year-on-year to 1.45 billion to 1.55 billion yuan, with the benefits of price increases accelerating from the fourth quarter through 2027.
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