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Samsung Electronics Q3 Earnings Briefing: HBM4 revenue more than tripled quarter-on-quarter, 2027 HBM capacity is fully sold out, Q4 DRAM shipments to rise 15%-20% quarter-on-quarter, HBM4E to enter mass production in H1 2027. The company also stated that chip shortages will worsen further next year — pricing power for memory remains with upstream players.
TSMC acquired nine factories and facilities of AUO in Taichung for NT$38.8 billion (approximately US$1.2 billion), securing fab space for capacity expansion of advanced processes and advanced packaging.
Q3 results delivered yet with divergent quarter-on-quarter performance: Innolight recorded a Q3 net profit of RMB 8.587 billion (+173.74% YoY); Tongfu Microelectronics posted a Q3 net profit of RMB 1.343 billion (+199.54% YoY); Longsys reported a Q3 net profit of RMB 3.745 billion (+436.60% YoY, -44% QoQ).
Jiwei In-depth Report: Advanced packaging materials hit an inflection point from “verification to volume ramp-up”. Aisen Chemical secured over RMB 10 million in orders for plating chemicals for advanced nodes in Q3. JCET raised its 2026 capital expenditure budget to RMB 18.2 billion (+65%).
Wafer prices rose across all sizes for the first time in more than three years. Fortune Precision stated it has a solid backlog, with notable order growth among leading equipment vendors.
In-depth Analysis
Optical Communications & Optical Chips: Innolight posted Q3 revenue of RMB 27.769 billion (+171.83%) and net profit of RMB 8.587 billion (+173.74%). Its revenue for the first three quarters reached RMB 69.547 billion (+178.13%), with sustained volume ramp-up of high-end 800G/1.6T products. Linktest Instruments recorded Q3 revenue of RMB 2.512 billion (+711.40%) and net profit of RMB 1.439 billion (+3488.07%). Capacity expansion by optical module and optical chip manufacturers has driven demand for test equipment. In the secondary market on Oct 29, the CPO sector led declines; TFC Communications fell by more than 10% and Innolight H-shares dropped 10%. This was driven by profit-taking after prior gains, while order visibility remains unchanged.
Advanced Packaging & Testing: Tongfu Microelectronics reported Q3 revenue of RMB 8.844 billion (+24.95%) and net profit of RMB 1.343 billion (+199.54%), with first-three-quarter net profit at RMB 3.061 billion (+255.68%). JCET further raised its 2026 capital expenditure from RMB 17.31 billion to RMB 18.2 billion, of which RMB 7.8 billion will be invested in its advanced packaging and testing fab in Lingang, Shanghai (Phase 1 to be completed in H2 2028). The company also plans to raise no more than RMB 6.5 billion to expand packaging capacity for high-performance computing. Jiwei In-depth Analysis shows domestic substitution of packaging materials is moving toward higher-end grades: Aisen received over RMB 10 million in orders for plating chemicals for advanced nodes in Q3; its copper plating base fluid passed qualification at Huatian, and silver-tin additives obtained JCET certification. Following supply constraints of Asahi Kasei’s PSPI, the firm secured the first domestic order for its self-developed PSPI. Feikai’s Q3 net profit rose 102.05%, and Yake’s precursor revenue increased by 30%. There were no new price quotes or capacity expansion announcements for ABF films / IC substrates today. Ajinomoto supply tightness, together with qualification progress for Huazheng’s CBF, Lianhua’s NBF and Hongchang’s GBF, remains consistent with prior expectations.
SiC & Power Semiconductors: No major developments today. New update: Hongguang Semiconductor plans to accept RMB 80 million in capital injection to expand its GaN module packaging line in Chizhou. SiC prices have not followed the uptrend, and inventory destocking for automotive-grade products is still ongoing. The sector is in a phase of “growing shipment volume with stable pricing”.
Memory & Compute Chips: Samsung’s memory business hit a new profit high in Q3; HBM4 revenue more than tripled quarter-on-quarter, 2027 HBM capacity is fully sold out, and long-term agreements (LTAs) will cover 60%-70% of capacity by 2030. Longsys posted Q3 revenue of RMB 14.630 billion (+123.74%) and net profit of RMB 3.745 billion, down 44% quarter-on-quarter. The company clarified that DRAM/NAND price hikes are narrowing and the marginal contribution of wafer price increases is moderating. Puyan recorded first-three-quarter revenue of RMB 3.050 billion (+479.25%) and non-recurring net profit of RMB 720 million (+6803.88%). Dapu Micro turned profitable with Q3 revenue of RMB 5.113 billion (+891.31%). Montage Technology’s Q3 net profit rose 161.98%, and Empyrean Technology’s Q3 net profit surged 1101.5%. On the AI front, NVIDIA is negotiating to provide billions of US dollars in credit facilities to support the USD 45 billion deal between cloud providers and Anthropic.
Equipment & Materials: For the first time in more than three years, 8-inch and 12-inch silicon wafers saw synchronized price increases across all sizes. Fortune Precision stated it has a healthy order backlog; its electrostatic chucks have completed domestic substitution qualification, and metal heating plates have passed certification by leading domestic and overseas customers. KINGSEM recorded Q3 revenue of RMB 673 million (+34.73%), with an R&D expense ratio of 37.67%.
Wafer Foundry: amsung stated its foundry revenue in Q4 will achieve double-digit quarter-on-quarter growth amid robust demand for advanced processes. On Oct 29 in the Hong Kong stock market, SMIC fell nearly 6% and Hua Hong Semiconductor dropped more than 7%. Southbound capital recorded net outflows for 12 consecutive trading days (a cumulative HKD 33.763 billion). No updates on domestic foundry quotations or utilization rates.
Policy & Macro: MIIT issued the Guidelines for Internal Compliance of Export Control of Monitoring Chemicals for public comments, extending the export control compliance framework to segmented product categories. US investment restrictions targeting China’s semiconductor, AI and quantum sectors are still under consultation. On Oct 29, the A-share semiconductor sector pulled back sharply; the CSI Semiconductor Materials & Equipment Index fell 5.3%, and Nasdaq futures dropped another 1.38% early this morning.
Daily Investment Tips
1. Beware of the pattern of “strong year-on-year growth coupled with slowing quarter-on-quarter momentum”: Longsys (-44%), Biwin (-62%) and Eoptolink (-19%) all indicate diminishing marginal price elasticity in the memory module and optical module segments. Delivery performance in Q4 hinges on the mix of high-end products rather than price hikes alone.
2. Portfolio allocation may tilt toward the “pick-and-shovel” segment: Silicon wafers see across-the-board price increases, packaging materials (plating chemicals / PSPI / temporary bonding adhesives) are entering the volume ramp-up phase, and equipment components boast robust order backlogs. That said, ABF/CBF-type materials face a 1–3 year qualification cycle and are unlikely to deliver near-term earnings upside.
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