[Core Information] Microchip’s revenue plummeted by 40%, Western Digital reduced NAND production, and semiconductor differentiation recovered

1. Microchip: The MCU/analog giant suffered huge losses, and its inventory reached 266 days.

• revenue：$1.026 billion，Year-on-year - 41.9%，MoM - 11.8%
• net profit：Loss $53.6 million(Profit of $419 million in the same period last year)
• Inventory：266 days(Industry health line is about 130–150 days), reaching a record high
• cash flow: Operating cash flow was US$271.5 million and free cash flow was US$253.4 million, remaining resilient.

• Main reason: Weak industrial/automotive/consumer electronics demand,Customer destocking cycle is too long
• Management: Inventory correction still not complete
• Next Quarter Outlook: RevenueUS$9.2–1 billion, continueLoss $79.4 million–$128.5 million
• Self-help:Closure of factories, layoffs, reduction of OEM production capacity, restructure long-term agreement

2. Western Digital: HDD is strong, NAND is under pressure, and spin-off will be completed at the end of March

• Revenue：$4.285 billion，MoM + 5%，YoY + 41%
• net profit：$647 million, year-on-year loss
• business structure: HDD ratio56.22%(12Q high), NAND Flash43.78%

• Estimated NAND revenue for this quarterMoM - 15%
• Phase out NAND supply in 2025, to cope with market oversupply
• 64GB DDR5 and other storage prices continue to fall, intensifying industry pressure

• Flash memory (formerly SanDisk) and HDD businessSpin-off to be completed by end of March
• Key financing has been completed and will become two independent listed companies

3. Wafer foundry: AI drives advanced manufacturing processes and is expected to grow by 20% in 2025

• Global foundry revenue to grow by 20% in 2025
• 22% real growth in 2024, with a scale of$627.6 billion
• 2025–2028 CAGR 13%–15%

• Advanced process (3nm/5nm): The demand for AI chips is strong,Capacity utilization is fully loaded
• Mature process: Automotive/industrial recovery is slow, utilization remains sluggish
• Advanced packaging (CoWoS/3D): Becoming a new fulcrum for growth

• TSMC: AI chip orders are full,3nm revenue surges 600%+ in 2025
• SMIC: Benefit from domestic substitution,Improved bargaining power of advanced processes

4. Market panorama: global growth, regional differentiation, and frequent hot spots

• Sales in 2024$627.6 billion，Year-on-year + 19.1%
• DRAM：+82.6%(Highest in all categories)
• Area:Americas + 44.8%、China + 18.3%；Europe - 8.1%、Japan - 0.4%

• 2024 revenueNT$530.586 billion，+22.4%
• Mobile phone flagship chipRevenue doubled, contributing approx.$2 billion
• Partner with NVIDIASmart cockpit chip, samples will be delivered in 2025

• simulate4,300 yen per shareacquisition100% equity，Launch in May
• Shibaura:Global leader in NTC thermistors
• Strategy: Yageo starts from passive components (resistance and capacitance)Get into sensors, improve the automotive/industrial layout

• ForAEC-Q100 Grade 0(-40℃~150℃) Automotive application
• Adapt to chassis, powertrain, domain controller,High functional safety

Industry Summary: Structural recovery, AI and domestic substitution of dual main lines

• cold zone：MCU / Analog (Microchip), consumer electronics are still being destocked
• hot zone：AI chip/advanced foundry、HDD storage、Automotive semiconductors、Domestic replacement
• Trend：
  1. AI computing powerContinue to drive demand for advanced processes and storage
  2. cost pressureIntensification: Large manufacturers are reducing production (Western Digital NAND), mergers and acquisitions (Yageo)
  3. Intensified differentiation: The strong will always be strong, and small and medium-sized manufacturers will accelerate their clearance