01

Policy Trend（May 12）

US and China slashed tariffs bilaterally by 100%, according to joint statement on China-US Economic and Trade Meeting in Geneva

From May 10 to 11, 2025, China and the USA held high-level economic and trade talks in Geneva, Switzerland, and issued a joint statement on May 12, announcing a substantial reduction in bilateral tariffs. According to the statement, the USA will reduce tariffs on Chinese goods from 145% to 30%, and China will reduce tariffs on US imports from 125% to 10%. In addition, the US suspended the 24% “reciprocal tariff” and China also suspended the 24% counter-tariff. This move marked a pragmatic shift from “exert maximum pressure” to “cost control”.

The tariff adjustment will have a positive impact on multiple industries. For example, US sharp reduction in tariffs on semiconductor devices exported to China will ease the purchasing pressure of SMIC, YMTC and other companies, thus accelerating the expansion of mature process production. At the same time, the export of China’s consumer electronics and telecommunication devices to USA will be resumed. In addition, US tariff reduction on lithium batteries from China has brought about a favorable turn for the lithium battery industrys exports to the USA.

Comments: The sharp slash in bilateral tariffs directly reduces the trade costs of companies, helping them to improve their competitiveness and profitability. This tariff adjustment has released a positive signal to the market, which will stabilize market expectations and enhance investors’ confidence. The optimistic mood in the market is driving the US stock market to rise, and Hang Seng Index and Hang Seng Technology Index have also risen sharply. Although the tariffs have been reduced significantly, there is still a certain uncertainty because both sides will continue to negotiate on economic and trade relations in the next 90 days. The trend that US seeks to reduce its dependence on China in the strategic field may still continue. USA may still limit key products, such as high-end chips, from flowing into China, through non-tariff means such as “List of Entities”.

The joint statement on China-US Economic and Trade Meeting in Geneva is an important step taken by both sides in the economic and trade field, and will help ease trade tensions and promote the steady development of bilateral economic and trade relations. However, attention shall be paid to the progress in subsequent negotiations between the two sides and possible new trade frictions.

02

Policy Trend（May 13）

Why US banned Huawei Ascend chips globally？

On May 13, 2025, local time, the Commerce Department not only rescinded the AI Diffusion Rule by the Biden administration but also issued three export control policies, of which the most attractive is the guidance prohibiting usage of Huaweis Ascend chips globally. The Ascend chips are Huawei’s self-developed high performance AI processors. They are widely used in cloud computing, auto pilot, and other fields due to its increasing technological strength. The US move is intended to curb Chinas rise in the field of AI, prevent China from gaining a greater share in the global market, and maintain US dominance in the global AI market. Even if Huawei’s Ascend chips are mainly supplied to the Chinese market, US is worried that China will make breakthrough in manufacturing advanced process chips, which may squeeze the global market share of American AI chip companies.

US requires local companies to reassess their supply chains and prevent technology transfer. This not only affects Huaweis overseas market expansion but also forces some domestic tech companies with overseas business, such as Ali, ByteDance, Baidu, Tencent, etc., to abandon the use of Huawei Ascend chips. The policy not only targets China but also has far-reaching impact on the global semiconductor supply chain, thus increasing the complexity and uncertainty of international cooperation. US included any products allegedly developed using American technologies into the control scope according to IEEPA and IEEPA and Trading with the Enemy Act. This “long-arm jurisdiction” means that the use of Huawei Ascend chips in China could be considered a violation of US export control regulation.

Comments: Some Chinese companies already sanctioned by US or entities that are less affected may continue to use Huawei Ascend chips. At the same time, Chinese companies are also speeding up independent innovation to break through US technological blockade. Although overseas companies rarely use Chinese AI chips, US policy also signals the global semiconductor ecosystem to “take side” and requires the global supply chain to move closer to US standards. This US policy is another manifestation of its scientific and technological hegemony. In the short term, it brings pressure on Huawei and related Chinese companies, but in the long term, it may accelerate China to develop its own AI chips and AI ecosystem. At the same time, such unilateralism also undermines the environment for global scientific and technological cooperation and is not conducive to the healthy development of the global AI industry.

03

Company Trend（May 14）

Samsung to outsource photomasks used for making memory chips

Recently, Samsung Electronics is planning to outsource photomasks used for manufacturing memory chips, according to report by several media including TheElec. This decision marks Samsung’s major shift in its semiconductor manufacturing strategy.

In the past, Samsung has been producing all photomasks by itself to prevent technology leakage. However, as technology advances and market conditions change, Samsung has decided to outsource some low-end photomasks (e.g. i-line 365 nm, KrF 248 nm). At present, Samsung has started the process of assessing suppliers, and the candidates include Tekscend Photomask, a holding subsidiary of Toppan in Japan, and PKL, a subsidiary of Photronics in US. The results are expected to be announced in Q3 2025.

Samsung plans to centralize its internal resources on the production of high-end photomasks (e.g. ArF 193 nm, EUV 13.5 nm) to promote the development of more advanced photometric technology. Samsung’s existing i-line and KrF production equipment is aging and is no longer produced, making it extremely difficult to acquire new equipment. This is one of the important reasons why Samsung is considering outsourcing low-end photomasks.

Comments: By outsourcing low-end photomasks, Samsung can centralize more resources on R&D of high-end photomasks and advanced lithography technology, to improve its competitiveness in the high-end process field. As the risk of low-end photomask technology leakage is comparatively low, Samsung is more willing to focus on developing high-end process technology. This move also provides new market opportunities for other photomask suppliers, facilitating the cooperation and growth of all players. Although low-end photomask technology is relatively mature, outsourced products may make Samsung depend on external suppliers to a certain extent, so it is necessary to secure the stability and security of the supply chain. The semiconductor market is changing rapidly, so Samsung needs to pay close attention to the market trend and adjust its outsourcing strategy in a timely manner so as to respond to possible market fluctuations.

04

Company Trend（May 15）

TSMC to build nine facilities in 2025, with 3nm capacity up 60%! The first-year adoption rate of 2nm chips will be twice that of the previous generation chips

TSMC is planning to ramp up nine new production facilities globally, including eight semiconductor fabs and one advanced packaging plant. The expansion plan marks that TSMC is accelerating its capacity landscape, with three facilities built per year from 2017 to 2020, five facilities from 2021 to 2024, and nine facilities in 2025.

TSMCs 3nm chip capacity is expected to grow by 60% in 2025, the third year of mass production. In H2 2025, TSMC will start mass production of 2nm chips at Fab 20 in Hsinchu and Fab 22 in Kaohsiung. The Fab 25 in Taichung will start construction at the end of 2025 and more advanced chips(smaller than 2nm) will be mass produced in 2028.

As the demand for AI and HPC surges, TSMC is expanding its advanced packaging capacity, and its CoWoS capacity is expected to rise more than 80% from 2022 to 2026. In addition, the first-year adoption rate of 2nm process is twice that of the previous generation (3nm/5nm), showing the high demand for advanced processes.

Comments: TSMCs capacity expansion plan will effectively alleviate the global shortage of chips, especially in the AI and HPC sectors, thus providing customers with more stable goods supply. By accelerating the development and production of advanced process chips, TSMC further strengthened its position as a tech leader in the global semiconductor industry. By building overseas facilities, TSMC will better cope with geopolitical risks, meet customers’ needs and improve market competitiveness. As the adoption of advanced process is accelerated, TSMC needs to keep balance between tech innovation and capacity expansion to cope with competition of other semiconductor companies in the market.

05

Domestic News（May 12）

AMT’s FC-BGA project officially starts and delivers the first batch of products

Recently, the FC-BGA project of AoXin Microelectronics Technology (Taicang) Co., Ltd.(AMT) has officially opened and completed the delivery of the first batch of products. AMTs FC-BGA project focuses on the production of high-end packaging substrates, which fills the domestic gap in this field. The project introduced the high-end production and testing equipment of an international leading brand. The equipment features advanced process, minimum line width/line spacing up to 8 μm/8 μm, and maximum substrate size of 100 mm×100 mm, so it can meet 4-24 layer cabling requirements. The delivery of the first batch of products marks an important breakthrough of AMT in the field of high-end packaging substrates.

AMT has signed strategic cooperation agreements with companies such as Rigger Micro Technologies, and has received orders worth more than RMB500mn at hand. After being fully put into operation, the project will greatly promote the in-depth development of Huangjing Town, Taicang in the field of semiconductor, attracting upstream and downstream companies to gather here, and makes contributions to building a complete industrial supply chain featuring “chip design & manufacturing - substrate R&D - packaging test” in Taicang. 

06

Domestic News（May 13）

Shanghai Sinyang realizes capacity of 100-ton photoresist

On May 13, Shanghai Sinyang stated on the investor interaction platform that it has realized a capacity of 100 tons of photoresist. In addition, the company plans to transfer the capacity of 500-ton photoresist originally to be built in Hefei to Shanghai Chemical Industry Park within the next three years. This adjustment is designed to optimize the allocation of resources and improve production efficiency by relying on the industrial chain and regional advantages of Shanghai Chemical Industry Park.

Shanghai Sinyang continues to make breakthroughs in the field of photoresist technology. The company has sold several types of KrF photoresists in batches and received orders for ArF immersion photoresist. In addition, some optical data of Shanghai Sinyangs ArF immersion photoresist is at the leading level among domestic peers. In the next three years, Shanghai Sinyang will focus on the photoresist production capacity in Shanghai Chemical Industry Park. The company plans to further expand its production capacity at its new base in the Shanghai Chemical Industry Park to meet the growing demand for photoresist in the market. This strategic layout will help the company to further enhance its competitiveness in the sector of semiconductor materials.

07

Domestic News（May 15）

Xiaomi to unveil self-developed chip in May: Industry News and Reviews

On the evening of May 15, 2025, Lei Jun, founder, Chairman and CEO of Xiaomi Group announced on social media that Xiaomi will unveil its self-developed SoC chip “XRING O1” in late May. According to the disclosure, XRING O1 chip, based on TSMCs N4P process and an eight-core three-cluster design, features comprehensive performance comparable to Snapdragon 8 Gen1 and even Snapdragon 8 Gen2. In addition, the chip is expected to integrate Arms most powerful Cortex-X925 CPU mega-core and Immortalis-G925 GPU.

XRING O1 is expected to be applied to Xiaomi 15S Pro, a flagship model for Xiaomi’s 15th anniversary. The release of this chip marks Xiaomi’s major breakthrough in the field of self-developed chip and also shows its competitiveness in the high-end chip market. Xiaomis path of developing chips began with the founding of Pinecone Electronics established in October 2014. Xiaomi released its first self-developed chip Surge S1 in 2017. In recent years, Xiaomi has achieved remarkable results in the field of special chips for video, fast charge, etc.