China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

China's Near-Term Semiconductor Bottleneck Isn't ASML

TSMC (2330.TT; TSM.US): A16 Technology Continues to Evolve in 1H27.

TSMC (2330.TT; TSM.US): 2Q24F Sales in Line, 2024F Is Lowering the Growth Target Below 25% YoY

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

Thematic (Sector/Industry)

China Semiconductors and semiconductor equipment / Thematic (Sector/Industry)

<ul>
<li>US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.</li>
<li>Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.</li>
<li>To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> to benefit first.</li>
</ul>


US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.
Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.
To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like Xiaomi Corp (1810 HK) to benefit first.


Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Semiconductor Manufacturing International Corp (SMIC)

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short