Huawei has introduced the innovative concept of ‘Tao (τ) Law,’ which seeks to pioneer a new approach to boosting chip performance. This is achieved by optimizing four key layers—transistors, circuits, chips, and systems—thereby minimizing the time constant τ. Leading securities firms, including Guosheng, Huatai, and CITIC, have observed a notable shift in semiconductor investment strategies. The focus is transitioning from the relentless pursuit of geometric process scaling to embracing ‘time scaling’ and collaborative optimization at the system level. This strategic pivot is expected to drive greater prosperity across several domains, including advanced processes, advanced packaging, equipment, EDA (Electronic Design Automation), CPO (Co-Packaged Optics), and mature process technologies. The investment landscape is evolving, with attention broadening from isolated advanced nodes to the harmonious interplay between advanced and mature processes.

While securities firms generally concur that traditional Moore’s Law is encountering formidable cost and physical barriers, their specific analytical lenses vary. Guosheng emphasizes the significance of the industrial cycle, Huatai highlights the importance of technological synergy, and CITIC zeroes in on process decomposition. Innovations like ‘logic folding’ have thrust advanced packaging into the limelight, with foundry services, equipment, EDA, and CPO emerging as the primary beneficiaries. Concurrently, the escalating demand for AI power supplies and the reduction in overseas production capacities are poised to reverse the supply-demand dynamics for mature processes. For investors, discerning the nuances among three distinct timelines is crucial: short-term policy and technological narratives, mid-term order elasticity spurred by technological applications, and the long-term realization of technological advancements.