The following is the original translation: Some thoughts about XFAB (thinking about mobile phone fragments): 1. NVIDIA promotes 800V DC architecture and seeks GaN/SiC players and power semiconductor targets. NVTS and other fabless/light wafer fabs that benefit from Nvidia's promotion may adopt a foundry model. 3. Focus more on Western supply chains rather than Asia, as the West is actively building local capabilities and enjoying Western premiums. http://4.xn--fiqs8s There is ample production capacity, and there may be risks before 2028, but the overall trend is still to establish Western supply chains. 5. XFAB is the only large-scale SiC foundry in the United States (ON or Infineon are both in vertical integration mode). 6. We have advanced 6-inch SiC and 8-inch GaN on Si, and are currently expanding our 8-inch GaN production line. They may be using CHIPS Act funds to develop 8-inch SiC, but it has not been publicly disclosed yet. 8. Checked SiC revenue - a year-on-year increase of 152%, which is good. The market may have overlooked this point, as the drag from the automotive business has resulted in overall data looking poor, which should become apparent once the automotive industry recovers. POWI also explicitly references XFAB and other clients in the document. 10. Both are clear partners of NVIDIA Power Semiconductors and are excellent exposure indicators for tracking 800V power semiconductor players. 11. The US Department of Commerce has listed XFAB as the only large-scale SiC OEM factory in the United States and provided $50 million PMT funding. The endorsement of key links in the supply chain by the US government is extremely valuable. 13. The EU CHIPS Act provides XFAB with 128 million euros for OEM business (MEMS, AI, etc.); They are also key MEMS foundries. 14. This means obtaining the endorsement of the EU government for a crucial position in the supply chain - the Two Continents Subsidy. From this, it can be seen that XFAB is a key MEMS foundry, with SiC capabilities, GaN development potential, and MEMS upstream space. They also received 47.6 million euros in EU funding to establish a leading silicon photonics supply chain in the EU - EU funding covers multiple dimensions. I know all the players in the Silicon Photonics ecosystem, including SmartPhotonics related information from GFS. NFDA and NOK are conducting high volume silicon photonics (HVM) qualification certification for it. I think this is mainly from the perspective of government endorsement of the EU photonics industry, with a higher probability of success - similar to the logic of the US government promoting the use of INTC. CHIPS Act 2.0 will be introduced next week... They are likely to receive additional funding or revenue commitments. 20. Price to book ratio of 1.28 times, is this probably just the book cost? It may still be in a traditional business drag cycle similar to SOI. 21. We have done some modeling of reset value, and the actual price to book ratio corresponding to reset cost is about 0.5-0.7 times. 22. Equivalent to free delivery service, while enjoying the recent upward space of SiC and the main growth curve of silicon photonics/GaN after the second half of 2027. Overall view: The price to book ratio and reset value provide a safety margin, with a macro level downside risk of approximately 20%. However, given the strategic importance of the two continents, the downside risks appear limited, while the upside potential is quite attractive. A large amount of capital expenditure may be supported by the upcoming CHIPS bill catalyst and national security considerations. A 2.5-4x revaluation seems possible and reasonable. It's not a 10-20 times chance, but a recovery from suppressing valuations - driven by the upward trend of silicon photonics, SiC/GaN demand serves as a short-term support and transitional bridge. TLDR: There is a high probability that the transaction will be lower than the reset value, and the subsidies from both continents are likely to cover capital expenditures. The government funding confirms its importance in the Western supply chain; Photons represent long-term upward logic, while SiC/GaN requires catalysts and transition bridges in the near future. The recent fluctuations are not under control, but it should be able to screen out those who are not firm enough in logic. The EU CHIPS Act 2.0 is about to be introduced, and XFAB has been included in the early optical ecosystem blueprint. After its introduction, there should be a catalyst boost in the near future. The current risk return ratio looks quite attractive, and further verification remains to be seen.