On October 22, Goldman Sachs issued a report announcing a 13.7% reduction in the target price for Hua Hong Semiconductor (01347.HK), bringing it down from HK$335 to HK$289, while retaining its 'Buy' rating. Goldman Sachs noted that, after factoring in the integration of Hua Li Microelectronics, it has adjusted the net profit projections for Hua Hong Semiconductor downward by 5% and 2% for the fiscal years 2026 and 2027, respectively. Conversely, it has raised the forecast for 2028 by 3%. Goldman Sachs predicts that investments in the generative AI sector, along with customer strategies, will fuel market demand for embedded and standalone non-volatile memory as well as power management integrated circuits. Although short-term profitability may face pressure due to escalated depreciation and initial integration expenses, the expansion of 12-inch manufacturing capacity is anticipated to generate economies of scale and bolster operational leverage over the long haul.