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US semiconductor and memory stocks saw notable pullbacks on Oct 13: the Philadelphia Semiconductor Index (SOX) dipped more than 3% intraday before paring losses to close at -0.6%. Applied Materials fell over 6%, Micron and SK Hynix dropped more than 3%, while Western Digital and Seagate slumped over 6%. A Bank of America survey indicated that global semiconductor equities have become the market’s "most crowded trade", pointing to elevated near-term crowding risks.
Earnings reports from TSMC (Oct 16) and ASML (Oct 15) are due this week. Institutional estimates forecast TSMC’s Q3 net profit to rise 65% YoY to NT$746.3 billion, marking six consecutive quarters of record highs. Its CoWoS capacity expansion and 2027 capital expenditure guidance will serve as key validation metrics for AI infrastructure.
Domestic substitution for advanced packaging and substrates is accelerating: CoreApex unveiled six innovative AI substrate products including CLoS-L, alongside capacity expansion plans such as the P2 project (to be operational in May 2027). Shenzhen Fastprint projected its net profit for the first three quarters to surge 204%–227% YoY, driven by rising volume and prices for CSP packaging substrates, plus robust order backlog for mSAP substrates used in optical modules (Q3 net profit up 215%–248% QoQ).
On the equipment side: Applied Materials inaugurated its USD 5 billion EPIC R&D hub in Silicon Valley, with TSMC, Intel, Samsung, Micron and SK Hynix as founding partners; the firm expects its revenue to double in the coming years. SEMI forecasts global semiconductor equipment sales to hit USD 165.9 billion in 2026 (+23.2% YoY) and reach USD 229.5 billion by 2028.
Power semiconductors: Jiejie Microelectronics guided its first-three-quarter net profit to RMB 555–624 million (+60%–80% YoY), with Q3 standalone net profit up 157%–226% YoY. Demand for power devices is jointly fueled by AI computing infrastructure and new energy sectors.
In-depth Analysis
Optical Communications / Optical Chips: At Marvell’s Investor Day, the company raised its FY2028 revenue forecast from USD 18 billion to USD 20 billion, with a FY2031 target of USD 70–90 billion. It is focusing on 1.6T / 3.2T optical interconnects, silicon photonics and CPO. Shenzhen Fastprint’s mSAP substrates for optical modules have secured tier-one industry clients and maintains a robust order backlog. Institutions believe 1.6T products are poised for large-scale mass deployment, while multiple NPO/CPO solutions are advancing, with a high probability of ecosystem maturity by 2027.
Advanced Packaging & Testing: On Oct 13, CoreApex (Nanjing) unveiled six innovative offerings, including CLoS-L (an evolution of CoWoS-L; the industry’s first DCBGA AI GPU substrate with 14 layers and dimensions of 110×110 mm), aETS rigid reinforcement technology, high-speed optical communication substrates (12 layers, DK ≤3.3 / Df ≤0.003), and SPV+ thick copper (copper thickness evolving toward 60/90 μm). The firm’s P2 fab is scheduled to come online in May 2027; the P3 fab will break ground in 2027 and enter mass production in 2028. A RMB 5 billion project for advanced packaging substrates targeting AI and chiplet architectures has landed in Nanjing, with global material leaders including Ajinomoto, Resonac, Doosan and Mitsubishi Gas Chemical participating in the event. Advanced Micro-Fabrication Equipment (AMEC) plans to inject RMB 35 million into bonding equipment maker Qinghe Crystal, lifting its equity stake to 7.07%.
SiC / Power Semiconductors: Jiejie Microelectronics delivered strong Q3 earnings growth driven by AI computing infrastructure and new energy demand. On the industry front, CITIC Securities previously projected accelerated domestic substitution for RF GaN. Separately, Wolfspeed secured a USD 1.5 billion loan from the US Department of Defense for GaN development. Yole forecasts the global RF GaN market to grow from USD 1.3 billion in 2025 to USD 2.4 billion by 2030. No other major updates for the day.
Memory & Compute Chips: Samsung showcased custom HBM, brand-new HBM5 and processing-in-memory technology at the OCP Global Summit, and demonstrated CXL memory expansion jointly with AMD. Marvell launched the industry’s first six-channel CXL 3.2 memory expander, with a single controller supporting up to 9TB DDR4 / 6TB DDR5. Ingenic Semiconductor stated DRAM remains in tight supply, with prices set to rise further in Q4 and supply-demand imbalance persisting into 2027. Apple’s stock rose 1.74% intraday on Oct 13, hitting a new all-time high market cap of USD 5.06 trillion.
Equipment & Materials: Beyond Applied Materials’ EPIC hub, JW Insights reported that Chengdu Zhongtewei (Shuangliu, Chengdu) has exceeded RMB 100 million in orders for its domestically manufactured near-ultraviolet contact lithography machines, with batch deliveries starting in early November. The products mainly serve optical chips, display semiconductors and advanced packaging, holding roughly 80% market share in the optoelectronic display segment. The company targets an annual capacity of 300 units next year and is developing panel-level laser direct-write lithography tools.
Wafer Foundry: TSMC reported Q3 revenue of NT$1.49 trillion (approx. USD 46.7 billion), up 51% YoY and hitting a record high; results were released on Oct 16. Market focus will be on ASML’s capacity expansion guidance in its earnings report on Oct 15.
Policy / Macro: On Oct 13, the Ministry of Commerce released the Measures for the Administration of Export Licenses for Dual-Use Items in the Civil Aviation Sector for public consultation, refining registration and customs clearance procedures for dual-use item export controls. Fed’s Williams stated one additional rate hike may occur this year while no hikes will be needed in 2027, pointing to relatively tight global liquidity expectations.
Daily Investment Tips
1.Earnings week brings both risks and opportunities: Earnings releases from ASML (Oct 15) and TSMC (Oct 16) serve as critical validation for the prosperity of AI capital expenditure. If the capacity of CoWoS / advanced process nodes and 2027 capex guidance fall short of expectations, coupled with the "most crowded trade" flagged by Bank of America and elevated US Treasury yields, the semiconductor sector may face heightened near-term downward pressure. Conversely, advanced packaging, semiconductor equipment and high-speed interconnect segments could receive renewed positive catalysts.
2. Structural opportunities in domestic substitution: AI demand is spreading from computing chips to equipment, materials and power semiconductors across the board. Track the earnings delivery timeline of advanced packaging substrates (CoreApex, Shenzhen Fastprint, Shengyi Technology) and power semiconductors (Jiejie Microelectronics, GaN industrial chain). Meanwhile, remain alert to risks including end-market demand suppression caused by memory price hikes and high volatility within the sector at elevated valuation levels.
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