Goldman Sachs on Hua Hong Semiconductor (1347.HK) China AI Tour: CFO Meeting — 12-Inch Capacity Ramp; Strong Demand Underpinning ASPs; Buy
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Goldman Sachs hosted Hua Hong Semiconductor's CFO at its China AI tour in Shanghai on September 9, 2026, focusing on 12-inch capacity capex, pricing, and advanced-node expansion. Management was positive on order momentum across platforms, especially embedded/standalone non-volatile memory and PMIC, underpinning firm pricing. The first 12-inch fab runs at 95k wpm; Fab 9A targets 83k wpm by end-3Q26 (equipment fully moved in during July 2026) and full utilization in 2027, while a third 12-inch fab (55k wpm) ramps during 2027-29. Hua Hong is acquiring 97.5% of Huali Micro, with regulatory clearance expected in June 2026 and closing in 3Q26. After 2Q26 volume and price gains, management guides 2026 prices up 10-15% yoy on memory, PMIC, MCU, and power-discrete demand, with depreciation and cost control supporting margins. Goldman Sachs maintains Buy with a 12-month target of HK$335.0 (92x 2030E P/E discounted to 2027E at 9.3% COE), implying 200.2% upside from HK$111.60. Revenue is forecast to rise from US$2,402.1mn (2025) to US$3,084.9mn (2026E), US$3,999.4mn (2027E), and US$4,801.3mn (2028E), with EBITDA up from US$692.2mn to US$1,880.8mn. Key risks: weaker end demand, a slower 12-inch ramp, and US-China trade uncertainty.