<div id="readability-page-1"><div><p>Citi published a report noting that Huawei unveiled &#34;Tao's Law&#34; (? at the IEEE ISCAS conference held on May 25. This represents a new chip design philosophy that emphasizes time (reducing latency) rather than geometric scaling (shrinking transistors) for chip miniaturization. Taking LogicFolding as an example, Huawei utilizes ultra-fine hybrid bonding (1.5-micron pitch) to vertically stack the active layers of logic, analog and memory circuits, and claims to have achieved a 55% increase in transistor density in its Kirin 2026 chip, reaching 238 million transistors per square millimeter. Citi believes that although geometric scaling constraints remain, this is a credible design response to Chinas limitations at advanced nodes and marks a shift toward innovation in chip, circuit and system design. Citi expects suppliers of advanced packaging equipment and services to be key beneficiaries.</p><p>Citi considers Huaweis &#34;Tao's Law&#34; a credible design solution to address Chinas restrictions at advanced nodes. Huawei is driving chip performance through innovation at the transistor, circuit, chip and system levels. However, due to the lack of extreme ultraviolet lithography technology, geometric scaling remains constrained. The density of 238 million transistors per square millimeter under a 3D design is not equivalent to that of planar designs. In addition, 3D designs may introduce new challenges, including thermal dissipation constraints and limitations in EDA tools.</p><p>The broker believes &#34;Tao's Law&#34; signals a shift toward chip, circuit and system design innovation, and if proven effective, it could see broader adoption. Expected key beneficiaries include (1) advanced packaging equipment providers, particularly hybrid bonding machine suppliers; (2) OSAT players, given rising packaging complexity; (3) foundries, to support advanced chip designs; and (4) EDA tool providers to enable 3D design. Among companies covered by Citi, it holds a more positive view on ASMPT (00522.HK)<span> </span><span> -1.400 (-0.684%)  </span> <span> Short selling $80.17M; Ratio 8.984%  </span>  based on its continued expansion in advanced packaging solutions. (da/j)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-27 12:25.)</p></div></div>

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<p>Citi reports that Huawei's 'Tao's Law' introduces a new chip design philosophy focusing on reducing latency rather than geometric scaling. This innovation, exemplified by the Kirin 2026 chip's 55% increase in transistor density, signals a shift in chip design. Citi anticipates that advanced packaging equipment suppliers, particularly hybrid bonding machine providers, will benefit significantly from this trend, despite challenges in 3D designs and existing geometric scaling constraints.</p>

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Citi: "Tao's Law" Signals Shift Toward Chip/Circuit/System Design Innovation; Advanced Packaging Players Such as ASMPT  Expected to Benefit