Upgrade of the ALICE Inner Tracking System during LS3: study of physics performance

This document summarises the studies on several observables whose measurement will be made accessible or largely improved by the upgrade of the inner barrel of the ALICE Inner Tracking System (ITS) for the LHC Run~4 (2029--2032). This upgrade project foresees the construction of a new inner barrel, denominated ITS3, made of three new fully cylindrical ultra-thin layers of monolithic active pixel sensors. This results in a large reduction of the material budget. With a smaller beampipe and, consequently, with the innermost layer positioned closer to the interaction point, the project largely improves the pointing resolution of the tracking, particularly at low momenta. The tracking efficiency is also significantly increased at low momenta. The gain in performance will allow for the first measurements of $\mathrm{B_s^0}$ and $\mathrm{\Lambda_b^0}$ at low transverse momenta, as well as non-prompt $\mathrm{D_s^+}$ and $\mathrm{\Xi_c^+}$ decays in heavy-ion collisions at LHC energies. The first studies on the existence of the exotic c-deuteron might be in reach, as well as an increased precision in hyper-nuclei studies. In addition, it allows to drastically reduce the background of electrons from photon conversions in the material and semi-leptonic charm-hadron decays in the study of low-mass di-electrons. As an outlook, prospects on novel techniques for the reconstruction of weakly decaying strange particles with the direct tracking of charged strange baryons are presented.