Golden Finance News | Morgan Stanley's research report pointed out that the wafer price increase in the second half of 2025 for Hua Hong Semiconductor (01347) was slower than expected, mainly due to weak end-demand environment. However, the progress of Hua Hong's new 12-inch wafer plant (Fab9) investment is smooth, which may help increase the overall sales average price. Capacity expansion may also continue to be a revenue driver for its 2025 fiscal year.

The bank expects fourth-quarter revenue to reach $0.53 billion to $0.54 billion, implying a 1% to 3% quarterly increase; gross margin maintained at 11% to 13%. Management also mentioned that the demand for 12-inch wafers remains strong, while the average selling price (ASP) of 8-inch wafers will still face some price pressure.

The bank has raised Hua Hong Semiconductor's target price from HK$26 to HK$28 and reiterated a 'shareholding' rating. The company's third-quarter revenue this year was $0.526 billion, up 10% quarterly and down 7% year-on-year, with a gross margin of 12.2%, slightly exceeding expectations. In addition, Hua Hong's overall utilization rate (UTR) reached 105%, significantly better than the 98% in the second quarter.