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Memory: TrendForce revised upward its HBM price outlook for 2027 on Sep 29, forecasting the blended average selling price (Blended ASP) to surge by 121% year-on-year. Samsung Electronics stated on the same day that HBM will account for nearly 30% of its total DRAM wafer capacity next year (versus around 20% currently), indicating the super cycle for memory remains intact.
Optical Communications: GF Securities commented on Sep 29 that NVIDIA’s horizontal rollout of CPO is progressing faster than anticipated. It projects Lumentum’s revenue from CPO/NPO lasers to reach USD 427 million / USD 501 million in 2027, expanding to USD 750 million / USD 2.55 billion in 2028.
Semiconductor Equipment: According to the 2026 MOCVD Equipment Industry Research Report by JWEI Consulting, China’s domestic MOCVD tools captured a 78% share of new installations in 2025 (up from 72.5% in 2024). Domestic vendors’ share of new orders hit 53.7%, surpassing imported equipment for the first time.
Wafer Foundry: Samsung Foundry plans to mass-produce its 3rd-generation 2nm process in 2028 and kick off 1.4nm development in 2029. The company expects its client base in 2029 to be five times the size recorded in 2017.
Domestic Memory: CXMT plans to invest a total of RMB 34.9 billion to advance high-end R&D initiatives and Phase II of its memory wafer back-end test base, ramping up DRAM production capacity and supporting infrastructure.
In-depth Analysis
Optical Communications / Optical Chips: GF Securities published a research report on Sep 29, noting NVIDIA’s horizontal rollout of CPO (Co-Packaged Optics) is faster than expected, maintaining a Buy rating on Lumentum. The broker estimates its CPO/NPO laser revenue will hit USD 427 million / USD 501 million in 2027, rising to USD 750 million and USD 2.55 billion respectively in 2028, with NPO as the primary growth driver.
On the domestic industrial front, Hengtong Optic-Electric previously planned a private placement of up to RMB 6.636 billion for new-generation optical fiber and CPO advanced packaging projects. Jwei.com also highlighted LanKun Micro’s OIO optical interconnect chips; OIO/CPO served as core topics at the IICIE Silicon Photonics Summit. Capital expenditure across the CPO/optical engine supply chain continues to accelerate.
It should be noted that the Hong Kong-listed optical communications sector suffered a sharp correction on Sep 28: Yangtze Optical Fibre and Cable dropped more than 16%, and Innolight fell roughly 12%. Most institutions view the pullback as profit-taking after rapid price gains rather than a fundamental reversal.
Advanced Packaging & Semiconductor Testing: PNOV, controlling subsidiary of Chongda Technology, obtained real estate certificates for two land parcels in Kunshan on Sep 28 for its "Edge-side Functional IC Packaging Substrate Project" with total investment of RMB 1 billion. JCET completed the fourth payment of USD 37.44 million and closed the acquisition of an 80% stake in SanDisk Semiconductor on Sep 28. Liyang Chip revised its private placement plan, cutting total fundraising to RMB 870 million, and removed the "Heterogeneous Stack Advanced Packaging Process R&D Project" from the list of funded initiatives.
On the materials side, tight supply persists for ABF substrates and upstream electronic-grade fiberglass cloth. Domestic ABF-like film (CBF) is still undergoing customer verification and small-volume delivery; domestic substitution will take time to materialize.
SiC / Power Semiconductors: No major new updates today. The core recent theme remains silicon carbide epitaxy and automotive-grade adoption. Hantiancheng received Buy ratings from China Securities International and CMBI International (target prices: HKD 166.3 / HKD 161.18). Tianyu Semiconductor raised the shipment proportion of 8-inch SiC epitaxial wafers. Domestic 8-inch SiC substrates are priced at approximately twice that of 6-inch wafers, and industry pricing discipline is maintained.
Memory & Compute Chips: TrendForce upgraded its 2027 blended ASP forecast for HBM, projecting a 121% YoY increase, driven by higher HBM4 penetration and HBM4e volume ramp in the second half of the year. Samsung stated HBM will account for nearly 30% of its DRAM wafer capacity next year. Domestically, CXMT plans to invest RMB 34.9 billion in R&D and Phase II of its back-end test base. After mass production of DDR5 5th-generation RCD05, Montage Technology also achieved mass production for CK01P, the upgraded DDR5 clock driver.
On the computing side, IDC data shows global server market size reached USD 166.3 billion in Q2, a record quarterly high, with GPU-accelerated server revenue of USD 87.4 billion (+28.1% YoY).
Equipment & Materials: According to JWEI Consulting’s MOCVD report, the global MOCVD equipment market reached USD 1.246 billion in 2025 (+10.30% YoY), while China’s market stood at RMB 4.86 billion (+12.3% YoY). Advanced Micro-Fabrication Equipment Inc. (AMEC) captured over 60% of the global market share for GaN-based LED MOCVD tools.
Nevertheless, localization varies widely across core components: high-precision MFC stands at ~45.3%, cryopump modules at 26.1%, while high-end processes remain below 5%. For photoresist, CEMIA data shows China’s photoresist market hit RMB 19.806 billion in 2025 (+23.2% YoY), of which the IC segment was RMB 6.637 billion. It is projected to reach RMB 7.794 billion in 2026 (+17.43% YoY).
Shanghai Simgroep announced that Chairman Jiang Haitian resigned due to job rotation. The firm posted H1 revenue of RMB 2.317 billion (+36.51% YoY) and net loss attributable to parent of RMB 965 million.
Wafer Foundry: Samsung Electronics said its foundry business will expand into AI/HPC. It plans mass production of 3rd-generation 2nm in 2028 and to kick off 1.4nm in 2029, expecting five times as many customers in 2029 as in 2017. TSMC’s monthly 2nm wafer capacity may reach 120,000 wafers by year-end (customer orders up 10%-20%). SMIC and Hua Hong disclosed no new capacity or pricing updates recently. Hong Kong-listed chip stocks broadly declined on Sep 28: Hua Hong Semiconductor down over 4%, SMIC down over 3%.
Policy / Macro Environment: On the evening of Sep 29, Trump met at the White House with leaders of NVIDIA, OpenAI, Anthropic, xAI, Google and other tech firms, jointly signing AI-related agreements covering "internal and external reviews". Fed officials Barr, Williams and Musalem successively called for further rate hikes. CME data indicates probability of holding rates steady in October stands at ~49.6%, with a 25bp hike at ~50.4%. The eight-point consensus from the China-US summit (including establishing an AI dialogue mechanism) continues to underpin the compute supply chain. Sep 30 will be the last trading day before the National Day holiday; markets will be closed Oct 1–7.
Daily Investment Tips
1. Memory Price Uptrend: The upward pricing trend for HBM/DRAM is well-defined (HBM blended ASP projected to rise 121% in 2027). Coupled with CXMT’s RMB 34.9 billion capacity expansion, we recommend monitoring memory manufacturers, module vendors, and upstream equipment & materials. Risks include suppression of end-market demand such as smartphones and PCs caused by overly rapid price hikes, and pressure on high-valuation tech stocks amid rising Fed rate-hike expectations.
2. CPO / Optical Communications & Equipment Localization: Accelerated volume ramp of NVIDIA’s CPO delivers medium-to-long-term order visibility. Nevertheless, the sector has posted substantial gains earlier with heightened volatility (sharp sell-off in Hong Kong-listed optical communication names on Sep 28). Profit-taking pressure should be watched ahead of the holiday break. On the equipment side, domestic substitution for tools including MOCVD is picking up speed. However, core components such as MFCs and cryopump modules remain bottlenecks. Investors may track investment directions of the 3rd phase of China’s National Integrated Circuit Industry Investment Fund.
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