Quanta expects strong growth in 2026, with Meta and Google as major customers

Summary: Quanta and Foxconn both set for ASIC server shipment surge in 2026 from major CSP customers, with margin improvement vs GPU servers.

Quanta Computer listed on TWSE as 2382.TW

▶ Quanta and Foxconn ramp up ASIC server efforts as 2026 market competition intensifies

- Both Quanta and Foxconn expect a surge in ASIC server shipments in the 2026 AI server market, anticipating a margin relief effect.

- While the two companies won in the Nvidia GB series AI server market in 2024–2025, the ASIC server market for CSPs is projected to expand in earnest in 2026.

- Quanta’s ASIC shipments in 2025 were minimal, but the company expects strong growth in 2026, with Meta and Google as major customers.

- Foxconn had 20% of its 2024 AI server revenue from ASICs, and it anticipates growth in 2026 based on confirmed orders from the three major CSPs—AWS, Google, and Microsoft.

- Currently, the AI server market is led by GPU products, and according to Digitimes Research, GPU shipments in 2025 will reach 62.73 million units, while ASIC shipments will stand at 50.62 million units.

- However, more and more institutions expect ASIC server growth to outpace GPU growth. Notably, Goldman Sachs projects a 40% growth rate for ASIC servers in 2026 (vs. 25.6% for GPUs).

- This is because CSPs are accelerating their own ASIC development for cost efficiency, workload customization, and to avoid supply chain dependency.

- Expansion of Nvidia GB200 and GB300 shipments exerts margin pressure on ODMs due to high cabinet costs.

- In contrast, ASIC servers, while more complex in design, are more profitable than GPU servers, making them advantageous for ODMs to defend their margins.

- As a result, the expansion of ASIC shipments in 2026 is expected to be the key breakthrough for ODMs in improving profitability and driving strategic transformation.

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https://t.co/TnziTtbKJy


Foxconn anticipates growth in 2026 based on confirmed orders from the three major CSPs—AWS, Google, and Microsoft

Hon Hai Precision (Foxconn) 2317.TW Taiwan


Summary: Shares JPM Buy-thesis on TSMC: short-term consolidation on FX/tariff risks, but AI drives mid-to-long-term upside; 2026 revenue +14-19%.

structural marker; pre-classified as canonical yfinance ticker

TSMC: AI and Advanced Processes Drive Performance Growth, Exchange Rates and Tariffs Remain Short-Term Risks
JPM (G. Hariharan, 25/07/10)

JPM states that TSMC's 2Q25 revenue slightly exceeded the upper end of its guidance, primarily driven by strong demand for N3/N5 and rush orders for mature nodes. Looking ahead to 2026, AI and N2 will continue to drive growth, though TWD appreciation and tariff issues still present uncertainties.

2Q Revenue Meets Expectations and Exceeds Company Guidance; N3/N5 and Rush Orders Are Key Drivers
2Q25 revenue was NT$934 billion, a 39% year-over-year increase, slightly above the company's dollar-denominated guidance. Growth was primarily driven by strong ramp-up of N3, AI-driven growth in N4/N5, and rush order shipments for older nodes. Even with an 11% appreciation of the New Taiwan Dollar, the gross margin is still expected to fall within the company's guidance range of 57-59%.

3Q Revenue Outlook for Moderate Growth, Full-Year Guidance Potentially Revised Up to Nearly 30%
JPM forecasts 3Q revenue to increase by 3-6% quarter-over-quarter, benefiting from continued N3/N5 demand. Although 4Q revenue is expected to decline by 6% due to diminishing rush order effects, the full-year revenue growth guidance may be revised upwards from mid-20% to high-20%, due to sustained strong AI orders and Apple not making additional cuts for tariff risks.

2026 Growth Driven by Price Increases, N3 Continuation, and N2 Introduction; Gross Margin Under Pressure
JPM estimates 2026 revenue to grow by 14% (19% in USD terms), with key drivers being 6-10% price increases for advanced processes, continued strong N3 performance, and N2 customer expansion. Gross margin may remain flat due to a stronger exchange rate and initial depreciation costs from N2 ramp-up. Capital expenditure is expected to reach $45 billion for expanding N2 capacity in Hsinchu and Kaohsiung, and the second phase of the N3 fab in Arizona.

Five Key Topics for the 7/17 Earnings Call, Including CoWoS Supply/Demand, 4Q Outlook, and N2 Prospects
Investor focus areas include: 1) The sustainability of AI demand and whether CoWoS capacity bottlenecks will ease; 2) Whether non-AI customer demand will be weak in the second half of the year; 3) Whether exchange rate pressures can be passed on to customers; 4) Initial demand and ramp-up speed for N2; 5) Whether TSMC's expansion in the US will help mitigate tariff impacts.

Short-Term Stock Price May Consolidate, AI Remains Core Mid-to-Long-Term Driver
JPM notes that TSMC's stock price has seen significant gains recently, and in the short term, it is pressured by exchange rate and tariff investigation (Section 232) uncertainties. However, if consumer demand in the second half of the year exceeds expectations, it could provide upside for the stock price. AI continues to be the primary growth engine in the mid-to-long term.

$TSM


Summary: Bearish HBM ASP: Samsung entry + all-maker supply increases will drive average selling prices down next year.

HBM memory basket: SK Hynix, Samsung, Micron

Unlike Micron's directors, I anticipate a decline in HBM ASP next year. This is because Samsung will enter the supply chain, and all HBM makers will increase their supply.

Please refer to the table below. (Source: Samsung Securities)

Samsung will supply more than double the amount of HBM next year compared to this year.

Director at Micron - HBM packaging yields have matured, capacity will catch up (via Tegus): https://t.co/1Lb80QfhNQ


Summary: Bullish NVDA on Hon Hai's 2026 AI rack outlook: base 50–60K, bull case 100K, 90% GPU racks.

Hon Hai’s 2026 AI rack outlook:

The base case is 50–60K, with a bull case up to 100K(What?)…

And 90% of these are said to be GPU racks.

$NVDA


NVIDIA's GB200 ranked first with an astonishing profit margin of about 78%

Summary: Morgan Stanley model: NVDA GB200 leads with ~78% margin; AMD suffering significant losses in AI inference — author shares this directional finding.

Morgan Stanley: AI inference is an incredibly profitable business. In its newly released report, the firm used a detailed financial model to calculate, for the first time from an economic perspective, the profitability of global AI compute competition. The conclusion is that standardized “AI inference factories,” regardless of which big tech company’s chips they use, generally enjoy an average profit margin exceeding 50%.

Among them, NVIDIA’s GB200 ranked first with an astonishing profit margin of about 78%. Google and Huawei’s chips were also assessed as “guaranteed profit businesses.” However, AMD, which had been highly anticipated by the market, was found to be suffering significant losses in the AI platform’s inference sector.


AMD, which had been highly anticipated by the market, was found to be suffering significant losses in the AI platform's inference sector


We raise our target price to KRW 120,000… We recommend Buy.

Summary: KIS raises Samsung Electronics TP to KRW 120,000 (+26%), Buy; 3Q beat expected, HBM3e certified, 2026 OP estimate lifted 36% to KRW 73T.

KIS: Samsung Electronics (005930) – Target Price KRW 120,000

3Q25 Preview: Normalization of the Abnormal

3Q Earnings Expected to Beat Consensus
We project 3Q revenue of KRW 82.4 trillion (+11% QoQ, +4% YoY) and operating profit of KRW 10.5 trillion (+125% QoQ, +15% YoY), which would surpass the consensus estimate of KRW 9.8 trillion by 7%. Conventional DRAM demand growth is expected to exceed guidance, driving stronger bit growth. HBM revenue is estimated to have surged 98% QoQ, boosting ASPs along with conventional DRAM. In foundry, new customer wins in mature processes (7nm and above) are gradually raising utilization. In addition, one-off costs recognized since 2H24 are coming to an end, significantly narrowing foundry losses compared to the previous quarter.

Signs of Rebound Led by HBM
Samsung’s HBM3e 12-high is believed to have essentially completed NVIDIA certification during 3Q. HBM4 samples of 11Gbps and above have also reportedly been shipped to NVIDIA. In 2H25, sales will mainly focus on HBM3e for customers other than NVIDIA, but starting in 2026, sales are expected to expand to NVIDIA and a broader customer base, with HBM bit growth outpacing the market average. Reflecting recent supply-demand conditions, we revise up our 2026 conventional DRAM ASP forecast from +10% to +25%, and HBM ASP from –2% to +9%. Accordingly, we raise our 2026 operating profit estimate by 36% to KRW 73 trillion (from the previous KRW 54 trillion).

Target Price Raised, Maintain “Second Preferred Pick” in the Sector
We raise our target price to KRW 120,000 (12-month forward BPS of KRW 71,381, target PBR 1.7x), up 26% from the previous estimate, while maintaining our stance as the second preferred pick within the sector. We believe much of the HBM risk has been alleviated with the certification of HBM3e 12-high for NVIDIA, and thus raise the target PBR from 1.3x to 1.7x. As HBM revenue grows, Samsung will gradually narrow the profitability gap with competitors. Investors can expect to benefit from both the conventional DRAM upcycle and the normalization of the HBM business. We recommend Buy.


Summary: Long-term bullish on nuclear stocks; especially Doosan Enerbility on potential Westinghouse acquisition; also likes Hitachi and GE Vernova.

Doosan Enerbility 034020.KS Korea nuclear/power

I have a bullish long-term outlook on nuclear-related stocks.

In particular, I heard that Korea’s Doosan Enerbility is considering acquiring Westinghouse in the U.S. If Doosan successfully acquires Westinghouse, it could become the ultimate all-in-one provider for the entire nuclear power value chain — from A to Z.

Hitachi and GE Vernova also look promising.

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https://t.co/UCnwMvCoFK


Hitachi and GE Vernova also look promising


Summary: Bought LRCX; sees it as promising going forward on stronger memory prices lifting equipment bull case.

industry='Semiconductor Equipment & Materials'

I bought a bit of LRCX yesterday. It looks promising going forward. https://t.co/97G8huBwSk

Memory Semiconductor Equipment: Stronger Memory Prices Push 2026 Bull Case Expectations Higher

Morgan Stanley says that strengthening memory prices are pushing up the 2026 semiconductor equipment bull case scenario to USD 50 billion (vs. previous estimate of USD 43.8 billion), https://t.co/7R9nVPx7IK


Summary: Morgan Stanley (shared/adopted): most bullish on NVDA into 12-month ramp; sees near-term sentiment recovery potential in MRVL and MU despite EW ratings.

NVIDIA: Latest Commentary on Investor Feedback Regarding “2Q Outlook”

Morgan Stanley (J. Moore, 25/08/25)

Regarding our feedback on NVIDIA’s outlook: Although for most of this year we have enjoyed significant optimism around NVIDIA’s performance, earlier on market sentiment was still relatively cautious, with a long list of concerns—DeepSeek, Blackwell delays, cabinet challenges, some customers’ data center construction slowdowns, and macroeconomic worries.

From our investor interactions, it appears that these pessimistic concerns have largely passed, and we share in the current optimism. We had previously forecast October-quarter revenue of $52.5 billion and believed there could be upside, but in some investor conversations the optimism was noticeably higher. Some sell-side analysts have even suggested figures as high as $55 billion, and the market has shown some emotional buy-in to these numbers, though they are not yet locked in. We continue to like NVIDIA at this share price range, because the ramp-up over the next 12 months will be very strong, although we expect the company will remain cautious regarding supply-side issues and the China variable. It is worth noting that the upper bound of this expectation is based on several billion dollars of contribution from China.

From this perspective, the China factor has actually clarified market expectations about the outlook. One major variable in guidance is how management assesses the China opportunity; while a small number of licenses have been approved, there is no clarity on future approvals. Media reports last week intensified market concerns, one claiming that the Chinese government might block domestic customers from purchasing U.S. chips (link), and another suggesting the company would slow its build-out pace (link). NVIDIA’s statement in response was only that “we constantly manage the supply chain to respond to market conditions”—a vague expression, but it did not deny the reports.

This remains an important issue requiring a long-term solution, and we believe ultimately both sides will have incentives to ensure China can obtain U.S. hardware. But how the company guides this part of the business will be one of the key factors affecting the specific guidance number. Against this backdrop, they will clearly take a conservative stance on this portion, which will in some sense lower the market’s hurdle.

We want to make clear that we remain very optimistic about the next 12 months, with many strong supports. It is only necessary to understand the factors that may affect near-term guidance.

Meanwhile, are there any other AI stocks where market sentiment has not turned into “one-sided” optimism?

Yes, we can name a few. We rate them all Equal Weight (EW), but we believe both companies could see a positive sentiment shift.

Marvell (outlook as follows): Market sentiment has been weighed down by Amazon’s Trainium performing only in line with expectations (rather than clearly above) and by concerns about growth next year. We think that, in the long term, expectations for ASIC may be too high, since commercial ASICs usually take longer to reach mass production. However, we still expect Amazon-related business to grow in line with market expectations next year and for the optical business to remain strong. Although reservations about ASIC keep us at EW, there is potential for a near-term positive sentiment shift.

Micron: High Bandwidth Memory (HBM) pricing will face a hard reset next year, with at least one customer—NVIDIA—already committed to full-year 2025 pricing. But current market sentiment is quite negative. We expect HBM will maintain a significant but gradually narrowing premium relative to DDR5. We maintain EW on Micron because the stock is expensive relative to its own history, and even in a strong cycle its free cash flow is quite limited. Still, we believe there is short-term potential for sentiment recovery.

We continue to prefer NVDA the most. Despite higher expectations, in a very strong AI environment, its positive sentiment still has the chance to spread to these peers.

$NVDA $MRVL $MU


there is potential for a near-term positive sentiment shift


we believe there is short-term potential for sentiment recovery


Summary: Shares/endorses Barclays Buy on NVDA; $2T+ planned AI spend makes Jensen's $3-4T TAM forecast look credible.

With the wave of announcements that have come over the last 6-9mo, we now estimate over $2T of planned spend at ~40GW of power in total.  Within that, we attribute ~65-70% to compute & networking with more deals likely in the pipeline, which starts to make the updated guidance of $3-4T look much more real.

$NVDA

Barclays buy thesis on $NVDA:

"When tracking AI capacity additions over the LTM, AI TAMs don't seem so outlandish anymore and NVDA looks like the most interesting name in our group.  When Jensen first forecast a $1T industry by the end of the decade, we admittedly balked.  With


Summary: Memory supercycle thesis: Samsung, Hynix, Micron all benefit as HBM-driven supply tightness + AI/server demand push DRAM/NAND prices higher through at least 2026.

Samsung, SK Hynix Raise DRAM and NAND Prices – Growing Expectations for a “Memory Supercycle” [biz-plus]

The tectonic plates of the memory semiconductor market are shifting. Samsung Electronics (005930) and SK Hynix (000660) have simultaneously raised prices for their flagship memory products such as DRAM and NAND flash, signaling the end of a prolonged downturn. With the expansion of the artificial intelligence (AI) market sparking supply chain restructuring and surging demand, expectations are mounting that the industry is entering a new “supercycle.”

According to industry sources on the 22nd, Samsung Electronics is currently negotiating fourth-quarter DRAM and NAND flash prices with major clients. Foreign media reported that Samsung has notified some customers that it will raise DRAM prices by up to 30% and NAND flash prices by up to 10% in Q4. SK Hynix has yet to formally announce price increases but is reportedly negotiating with clients under the principle of charging higher prices in line with market conditions. With the two memory giants effectively moving together on price hikes, analysts say the market has decisively shifted to a supplier-led dynamic.

The root cause of this price surge lies in the structural changes to the memory market brought on by the AI era. The centerpiece is, without question, high-bandwidth memory (HBM). Serving as the “heart” of AI semiconductors, HBM boasts far higher profitability than standard DRAM. Global memory leaders—Samsung Electronics, SK Hynix, and Micron—are allocating their limited wafer capacity to HBM production as a top priority. Because HBM chips are two to three times larger than conventional DRAM, far fewer chips can be produced from a single wafer. As a result, the more capacity is devoted to HBM, the less supply is available for PC, mobile, and general-purpose server DRAM.

While supply has tightened, demand is exploding at a pace far exceeding forecasts. The strongest demand driver, by far, is AI data centers. Training and inference for AI models require processing enormous amounts of data at high speed, making high-performance DRAM and large-capacity enterprise solid-state drives (eSSD) essential. Market research firm TechInsights projects that DRAM capacity per AI server will grow from an average of 1TB in 2024 to 2.5TB by 2030—more than a 2.5-fold increase.

On top of this, replacement demand from the general server market is further fueling growth. Data center servers worldwide, which were massively deployed during the last supercycle in 2017–2018, are now hitting their 4–5-year replacement cycle. As enterprises resume general server investments that had briefly slowed due to the AI boom, demand for commodity DRAM is soaring. Global investment bank Morgan Stanley noted in a report that “AI-related demand is stimulating demand for general-purpose server and mobile DRAM as well, driving a rebound in prices.”

The NAND flash market is following a similar pattern. Exploding demand to replace or supplement traditional hard disk drives (HDDs) with eSSDs for AI data processing is already creating visible shortages. Morgan Stanley predicts that the 2026 order volume for large-capacity eSSDs from U.S. hyperscale data center operators alone could surpass the total size of this year’s entire eSSD market. It forecasts the NAND market will flip into shortage by 2026.

These market shifts are raising expectations for upcoming corporate earnings. All eyes are on Micron’s earnings release scheduled for the 23rd (local time) in the U.S. The outlook and pricing policies Micron presents for the HBM market will serve as an important benchmark for the strategies of Samsung Electronics and SK Hynix. Wall Street expects Micron’s Q4 revenue to surge 43% year-on-year.

Samsung Electronics and SK Hynix are set to announce their Q3 earnings in the weeks of October 13 and October 20, respectively. With HBM revenue beginning to flow in and the decline in commodity memory prices halted, both firms are projected to show clear earnings improvements. An industry insider commented, “With supply structurally constrained and demand rising from both AI and general servers, memory prices are likely to keep climbing, significantly boosting corporate profitability for the foreseeable future.”

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https://t.co/sNy0byQgbp


Wall Street expects Micron's Q4 revenue to surge 43% year-on-year


Summary: Bullish MediaTek on cloud ASIC wins: Meta MTIA v4 ($3-4B/yr), AI glasses ($2B), Google TPU v7e ($1.5-2B); TSMC 2nm as process node beneficiary.

MediaTek Industry Note:

European institutional investors point out that MediaTek views cloud ASICs as a mid-to-long-term growth driver and is actively expanding its collaborations with key clients. According to their report, MediaTek is highly likely to cooperate with Meta on the development of the next-generation MTIA v4 ASIC, with mass production expected in 2028 and adoption of TSMC (2330) 2nm process. Previous versions, MTIA v1/v2/v3, were all designed by Broadcom. Compared to Google's TPU, the MTIA project requires more front-end design services and relies on SerDes IP technology support. If MediaTek successfully secures this project and achieves mass production, it will help establish its technological and market position in the cloud ASIC field. This report estimates that if the MTIA v4 project materializes, it will bring annual revenues of $3-4 billion to MediaTek from 2028 to 2029, which accounts for over 10% of its total revenue growth.

Potential Collaboration on AI Glasses ASIC
Furthermore, European institutional investors suggest that Meta may also collaborate with MediaTek on the development of an AI glasses-specific ASIC, potentially replacing the current Qualcomm solution. Meta is a leader in the AI glasses market, with shipments of approximately 2 million units in 2024, expected to reach 10 million units in 2025. This project aims to enable large language model execution on devices by adopting the N3 advanced process and a four-layer stack VHM (Very High Bandwidth Mobile Memory). This ASIC is scheduled for mass production in mid-2027, and is expected to contribute approximately $2 billion in revenue in 2028. (Calculated at $100 per chip, this would imply shipments of 20 million units.) European institutional investors also anticipate that this project could generate $200 million in NRE (Non-Recurring Engineering) revenue between 2026 and 2027.

Google TPU Project and Short-Term Outlook
Regarding the collaboration with Google, European institutional investors expect that the TPU v7e will undergo Tape Out (design completion) in September 2025. Although the mass production timeline remains uncertain, it is likely to fall between late 2026 and early 2027, and Google's commitment to its self-developed computing architecture remains unchanged. If TPU v7e successfully reaches mass production, it is estimated to contribute $1.5-2 billion in revenue in 2027.


Competitors can't even see their taillights... the AI server market continues to boom, providing a critical growth engine for ODMs and component suppliers in the second half of the year

Summary: GB300 production underway with smooth ramp, robust GB200 demand, and booming AI server market into H2 2025; bullish NVDA.

Report: GB300 production underway: Nvidia's strategic shift brings relief to ODMs

Nvidia has begun limited production of its next-generation AI server platform, the GB300, with volume shipments expected to ramp up starting in September 2025, according to sources in the supply chain. Industry insiders expect a smooth production trajectory into the second half of the year, thanks to a strategic shift that's easing the burden on manufacturers.

In a key move, Nvidia has chosen to reuse the motherboard design from its current GB200 platform—known as the Bianca board—for the GB300. This reuse has significantly shortened the learning curve for suppliers, many of whom had struggled to keep pace with Nvidia's blistering product update cycle in the past.

"There are no major issues with the GB300 at this stage. Shipments should proceed smoothly in the second half," noted one ODM representative.

Currently, demand for the GB200 remains robust, though its reliance on liquid cooling has led to widespread reports of coolant leaks. Despite the unresolved issue, enterprise customers remain eager to deploy the systems, opting for temporary solutions such as leak testing and localized shutdowns. The urgency of staying competitive in AI development has pushed data center operators to prioritize speed over technical perfection.

"Nvidia's upgrade pace in AI servers is like a military blitz," said one industry executive. "Competitors can't even see their taillights, but the supply chain is feeling the strain."

Nvidia's rapid generational shifts—from Hopper to the current Blackwell architecture—have consistently introduced sweeping changes. The GB200, for example, dramatically compressed server layout, leading to repeated delays in mass production. However, with the GB300 reusing existing infrastructure, suppliers no longer face the same steep ramp-up challenges.

ODM firms are now actively testing the GB300, and early production results are promising. The transition is expected to occur seamlessly, with steady shipments projected through the third quarter, and volume is expected to pick up further in the fourth quarter. Compute board supplier Wistron has confirmed that revenue this quarter will not grow sequentially due to the generational overlap—an indirect confirmation that GB300 production is underway.

Looking beyond: The Rubin series will bring new challenges
While the supply chain is momentarily relieved, preparations are already underway for the next architectural leap: Nvidia's Rubin platform. Unlike the GB300, Rubin will introduce chiplet-based GPUs—designed in partnership with TSMC—and feature a completely redesigned Kyber rack (VR300 NVL 576), replacing the current Oberon rack.

The new design will increase GPU density, thereby demanding more robust thermal solutions. Liquid cooling, which has become more prominent with the GB200, will become essential with Rubin.

Currently, the most vulnerable component in the GB200's liquid cooling systems is the quick-connect fittings, which are prone to leaks, even after stress testing at the factory. ODMs note that real-world deployment scenarios vary widely in water pressure and plumbing design, making leaks difficult to fully eliminate. Post-shipment servicing has consumed considerable manpower.

Despite these challenges, ODMs remain confident about the GB300 rollout. Even as the US tariffs on Chinese imports threaten consumer electronics, the AI server market continues to boom, providing a critical growth engine for ODMs and component suppliers in the second half of the year.

$NVDA

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https://t.co/iTGxxTYcM9


I maintain my view of Samsung's strength. Samsung has a higher chance of seizing leadership in HBM compared to other memory makers. I believe this is Samsung's true strength.

Summary: Bullish Samsung: in-house design capabilities give it a structural edge in HBM leadership over Micron and Hynix.

Myron’s view is truly fascinating.

NVIDIA designing its own HBM base die could be an example of this.

The more parts of HBM that get outsourced, the more memory companies risk ending up producing just the “shell” of HBM.

I expect memory makers and fabless companies will wrestle for control over HBM.

Also, I maintain my view of Samsung’s strength.

Unlike Micron and SK Hynix, Samsung possesses its own design capabilities.

This means Samsung has a higher chance of seizing leadership in HBM compared to other memory makers.

I believe this is Samsung’s true strength.

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https://t.co/jaaPZKkAmH

I really enjoyed reading this.


Summary: Long ASML as foundry monopoly breaks down and Intel/Samsung challenge TSMC, restoring ASML's pricing power on EUV.

It seems that reasons for showing strength in ASML are gradually emerging.

Until now, the foundry sector has been virtually monopolized by TSMC, so Intel and Samsung had no reason to expand their fabs.

The reason why semiconductor equipment companies’ stock prices have been relatively weak during the first half of this year is that investors were focused on the back-end process.

Since TSMC monopolized the volume from Big Tech, naturally, market attention concentrated on CoWoS, and CoWoS was mistakenly perceived as an unrivaled technology unique to TSMC that no one else could challenge. In reality, the front-end process is the most important, and companies like Samsung, lacking customers, simply did not have the capacity to invest in the back-end, which inevitably put them at a disadvantage in packaging.

Although ASML is a company with strengths in the front-end process, its performance has been sluggish because the foundry industry has transformed into a TSMC monopoly structure. In fact, TSMC has tried to rein in ASML by delaying the introduction of High-NA EUV and even succeeded in making the supply conditions of EUV machines favorable to itself.

However, now with Intel receiving support from the U.S. government and Samsung joining forces with Elon Musk, I’m beginning to think that competitors in the foundry space are finally emerging.

In other words, TSMC can no longer strong-arm ASML when purchasing EUV lithography machines.


TSMC can no longer strong-arm ASML when purchasing EUV lithography machines

TSMC listed on NYSE as TSM (ADR); also 2330.TW


Morgan Stanley believes that GOOGL and META are leaders in Diffusion model-driven video and image generation tools...bringing upside potential to mid-to-long-term valuations

Summary: Shares Morgan Stanley Buy-aligned thesis: GOOGL and META diffusion model video tools to boost engagement and ad monetization, driving mid-to-long-term valuation upside.

industry='Internet Content & Information'

Diffusion Models - Google and Meta: Video Generation Tools Drive Growth in Both Engagement and Monetization
Morgan Stanley (B. Nowak, 25/07/09)

Morgan Stanley believes that GOOGL and META are leaders in Diffusion model-driven video and image generation tools, which can enhance content creation efficiency, improve ad personalization and relevance, and thus significantly boost user engagement time and ad monetization capabilities, bringing upside potential to mid-to-long-term valuations.

Google Strengthens YouTube Creation and Ad Tools with Veo 3 and Imagen 4
GOOGL's YouTube has embedded Veo 3 and Imagen 4 models into its creator and advertiser tools, including features like Dream Screen and Flow, supporting text-to-video/image generation.
Approximately 57% of advertisers have adopted these tools, which is expected to enhance ad content diversity and
personalization.

Meta Launches Emu and MovieGen, Accelerating Innovation in Video Creation Experience
META has introduced multimodal Diffusion models like Emu and MovieGen, which support text-to-video generation with sound effects and music. New features such as Video Generation and Video Highlights have been added to improve automatic ad generation efficiency and viewability. Surveys show that 56% of advertisers have already adopted these tools.

AI Content Generation Will Drive Higher Personalization and Engagement
Based on their leading data infrastructure and algorithmic capabilities, GOOGL and META can enhance recommendation accuracy and user experience through AI-generated content. For example, Meta's AI recommendations have already increased user time spent by 6-7%, and AI creation tools are expected to further drive content diversity and ad suitability in the future.

Ad Monetization Has Quantifiable Growth Potential
On the YouTube platform, every 1% increase in engagement or monetization capability can bring approximately $1 billion in incremental revenue. Although this accounts for only 15% of GOOGL's advertising revenue, its positive impact on valuation is significant. For META, due to higher average ad value per person, every 1% increase can boost ad revenue by approximately $5 billion and has about 2% upside elasticity on the stock price target.

Small and Medium-Sized Advertisers Benefit from AI Automation Empowerment
Through Diffusion model-driven video generation tools, small and medium-sized advertisers, traditionally limited by production resources, can efficiently achieve customized and automated video advertising, improving ad quality and return on investment. This is an important driver for the democratization of advertising technology in the future.


Summary: NVDA China revenue expected to rebound significantly H2 2025 via RTX 6000D; TSMC benefits from 4nm utilization surge.

Exclusive: Jensen Huang's third visit to China in 2025; RTX 6000D aims for two million shipments

Nvidia CEO Jensen Huang made his third visit to China in 2025, demonstrating significant sincerity to revive the Chinese market. According to supply chain sources, Nvidia has confirmed it will supply the RTX 6000D in the third quarter of 2025, manufactured using TSMC's 4nm process. The shipment target is set at around two million units by year-end, aiming to fill a revenue gap exceeding US$10 billion.

The RTX 6000D and the Blackwell series have also driven TSMC's 4nm production capacity utilization to unprecedented levels, contributing significantly to its revenue.

Reportedly, to counteract the decline in revenue from China—from 13% down to single-digit percentages—Huang visited China again on July 14 under close scrutiny from US authorities. This marks his third appearance in China in 2025.

Supply chain insiders revealed that besides showing his commitment to the Chinese market, Huang also presented multiple clients with Nvidia's solutions amid ongoing US-China tensions.

Impact of US export bans on Nvidia
Huang's active push to ship downgraded AI chips to China reflects the critical situation. Nvidia's fiscal year 2025 financial report showed that revenue from China (including Hong Kong) reached US$17.108 billion, accounting for 13.11% of total annual revenue.

Following the US ban on H20 chips, Nvidia immediately recognized inventory losses up to US$5.5 billion. Its May financial report disclosed impairments of US$4.5 billion related to inventory and procurement obligations, along with approximately US$2.5 billion in lost potential revenue recognition.

As Nvidia nearly monopolizes the AI GPU market, it has been one of the hardest-hit companies under these restrictions. The US Department of Commerce first imposed export controls targeting AI chips to China in 2022, banning products like Nvidia's A100 and H100 from being exported to China. In response, Nvidia urgently launched downgraded versions, the A800 and H800, to continue supplying the Chinese market.

A year later, the US government further blocked exports of the A800 and H800. Nvidia then shifted focus to developing downgraded H20 and L20 products, but even flagship gaming GPUs such as the RTX 4090 faced restrictions.

In 2025, the supply of the special edition RTX 5090D was also hindered, and the ban on H20 sales to China almost pushed Nvidia's revenue share in the Chinese market below 5%.

The new RTX 6000D: A tactical response
Determined not to abandon the Chinese market, Nvidia plans to launch the "RTX 6000D" in the third quarter of 2025, complying with US regulations. This modified version of the RTX 5090 uses TSMC's 4nm process, offers up to 1,100GB/s bidirectional bandwidth, and features next-generation GDDR7 graphics memory. It aims to deliver memory performance comparable to high-bandwidth memory (HBM).

Industry experts caution that supply constraints on GDDR7 could pose risks in the second half of 2025. The current shipment target for the RTX 6000D starts at a minimum of one million units, potentially reaching up to two million if obstacles are overcome.

Analysts note that while Chinese firms like Huawei and Cambricon accelerate AI chip development, they face limitations due to SMIC's manufacturing capacity, Huawei's process capabilities, high production costs, memory bandwidth challenges, system integration difficulties, and immature software ecosystems. Replacing Nvidia's CUDA ecosystem remains highly challenging.

If the RTX 6000D can be supplied smoothly and maintain Chinese clients' purchasing dependence, Nvidia's revenue from China is expected to rebound significantly in the second half of 2025, driving robust overall growth.

---

https://t.co/BHM5yrkHG7


The RTX 6000D and the Blackwell series have also driven TSMC's 4nm production capacity utilization to unprecedented levels, contributing significantly to its revenue


Micron announced strong demand-driven results in its May 2024 quarterly earnings and provided a positive outlook for the August quarter. HBM demand surpassed $1.5 billion, a 50% increase quarter-over-quarter. HBM revenue could approach $8 billion on an annualized basis, and Micron is expanding its customer base by mass-producing additional HBM4 products by 2026

Summary: Shares JPM bullish thesis: DRAM supply balanced, no ASP downcycle; MU HBM ramping to ~$8B annualized; NAND faces declines in 2025-2026.

JP Morgan) Regarding Memory Semiconductors:

The HBM market continues to face tight overall supply due to a surge in memory content, driven by increasing demand for AI and high-performance servers. This, coupled with rising shipments and improved average selling prices (ASPs) for DDR4 and DDR5, and the stable trend in NAND prices, indicates a recovering demand in consumer applications as well. In particular, the rapid inventory clearance by customers and distribution channels is creating a favorable short-term supply-demand structure, accompanied by some pre-emptive demand related to tariffs. However, it's also assessed that these tariff factors could act as a demand headwind in the second half of the year, potentially limiting the quarter-over-quarter improvement in ASPs and shipments.

DRAM revenue surged by 96% in 2024, and we anticipate growth of 31% in 2025 and 15% in 2026. In contrast, NAND is projected to increase by 91% in 2024, followed by a 9% decrease in 2025 and a 5% decrease in 2026. For DRAM, supply and demand are expected to balance out in 2025, and a double-digit ASP decline, typical in a downcycle, is not foreseen. This is because the increasing proportion of cleanroom investment in infrastructure and the additional cleanroom space occupied by HBM expansion limit the overall capacity for bit production growth. In the NAND market, companies with portfolios focused on data centers and eSSD are expected to perform relatively well, while slowing consumer sentiment and macro uncertainties could weigh on consumer-facing demand.

Micron announced strong demand-driven results in its May 2024 quarterly earnings and provided a positive outlook for the August quarter. Notably, HBM demand surpassed $1.5 billion, a 50% increase quarter-over-quarter, and improvements were also observed across the datacenter, mobile, and industrial/embedded markets. The ramp-up of HBM3E 12-high is proceeding smoothly, and HBM market share is expected to reach a level similar to Micron's overall DRAM share by the end of the year. This implies that HBM revenue could approach $8 billion on an annualized basis, and Micron is expanding its customer base by mass-producing additional HBM4 products by 2026. Currently, collaboration with a total of four customers is underway.

$MU


DRAM revenue surged by 96% in 2024, and we anticipate growth of 31% in 2025 and 15% in 2026. For DRAM, supply and demand are expected to balance out in 2025, and a double-digit ASP decline, typical in a downcycle, is not foreseen

DRAM sector basket: Micron, Samsung, SK Hynix


NAND is projected to increase by 91% in 2024, followed by a 9% decrease in 2025 and a 5% decrease in 2026. slowing consumer sentiment and macro uncertainties could weigh on consumer-facing demand


Azure Growth Expected to Meet or Exceed Upper Guidance… UBS has therefore raised its FY26 operating margin forecast by approximately 50 basis points

Summary: Shares UBS bullish outlook on MSFT: Azure to meet/beat guidance, FY26 margins revised up ~50bps, enterprise spending improving.

Microsoft Outlook: Azure Growth and Profitability Expectations Positive, OpenAI Partnership Draws Attention
UBS (K. Keirstead, 25/07/22)

Microsoft's upcoming Q4 earnings report is expected to bring positive signals regarding Azure growth and profitability revisions, but the market is also closely watching changes in its relationship with OpenAI and long-term capital expenditure trends.

Azure Growth Expected to Meet or Exceed Upper Guidance, Enterprise Spending Environment Marginally Improving

UBS states that market expectations for Azure's year-over-year growth this quarter are 36%, with guidance for a slight slowdown to 34% next quarter. Although this requires historical levels of sequential revenue growth, feedback from enterprise customers and partners indicates that spending sentiment has improved compared to the February-April period. AI demand remains strong, ChatGPT inference load is increasing, and supply bottlenecks have not worsened.

FY26 Margin Outlook Improves, Cost Control Measures Show Initial Results

Microsoft continues to implement cost control measures on operating expenses to offset gross margin pressure. UBS has therefore raised its FY26 operating margin forecast by approximately 50 basis points, now expecting margins to remain stable rather than decline.

Microsoft-OpenAI Partnership Creates Uncertainty, Compute Demand Structure May Change

The market continues to focus on reports of adjustments to the terms of the Microsoft-OpenAI partnership, especially the risk of compute workload potentially shifting from Microsoft to Oracle and CoreWeave. UBS believes the market currently has no clear conclusion on this but generally tends to trust Microsoft's execution capabilities.

Other Financial Variables Also Under Scrutiny, Including Capex and Tax Policy Impact

In addition to core growth metrics, UBS points out that the scale of FY26 capital expenditures, changes in tax legislation, and adjustments to asset depreciation rules could also impact financial performance, warranting continuous monitoring.


Summary: Morgan Stanley raises TSMC outlook: 30% revenue growth in 2025, 33% in 2026, driven by AI/GPU demand, 2nm ramp, and potential tariff exemptions; bullish on gross margin staying above 53%.

TSMC: 2025 Revenue Growth Guidance Raised, Strong AI Demand Drives Growth
Morgan Stanley (C. Chan, 25/07/17)

Morgan Stanley believes that TSMC's 2025 revenue growth guidance has been raised to a 30% year-on-year growth rate, and strong growth is expected to continue in 2026, with AI demand, especially AI GPU demand from the Chinese market, being the main driving force. TSMC expects revenue to grow by 33% in 2026 and plans to continue expanding 2nm capacity in the coming years. TSMC also anticipates AI semiconductors to achieve a compound annual growth rate (CAGR) of over 45% in the next five years, further boosting the company's revenue growth.

Revenue Growth Guidance Raised: TSMC has raised its 2025 revenue growth guidance to 30% year-on-year, better than the originally anticipated mid-20%. This upward revision reflects strong expectations for High-Performance Computing (HPC) and AI demand. TSMC expects to achieve 33% USD revenue growth in 2025, with 2026 revenue also projected to grow by 33%. Although a 10% sequential decline is expected in the fourth quarter, Morgan Stanley considers this too conservative and expects the fourth quarter to be flat quarter-on-quarter.

AI Demand Drives Growth: TSMC's AI business, especially GPU demand from the Chinese market, is expected to contribute 2-3% to the company's revenue in 2025. The company expects revenue from AI semiconductors in cloud computing to achieve a mid-40% CAGR over the next five years. TSMC also stated that with the resumption of H20 shipments, AI demand will further drive the company's growth in the coming years.

2026 Gross Margin Outlook: TSMC expects its gross margin in 2026 to remain above 53%, despite potential foreign exchange impacts. TSMC plans to offset possible cost pressures by raising wafer prices. Morgan Stanley believes that due to tight 3nm and 4nm capacity, TSMC may raise prices by 3-5% in 2026. Prices for 4nm capacity at US fabs are expected to increase by more than 10%.

Semiconductor Tariffs: Semiconductor tariffs remain a potential burden for TSMC. TSMC mentioned in its Q1 2025 earnings call that tariffs could threaten electronics demand and reduce company revenue. However, Morgan Stanley believes that TSMC's $165 billion investment in the US increases the likelihood of obtaining tariff exemptions. If tariff exemptions apply to equipment and chemical imports, TSMC's long-term gross margin will be able to stay above 53%.

2nm Capacity Build-out: TSMC plans to begin mass production of 2nm in the second half of 2025, with 2nm capacity expected to reach 90k wafers/month by the end of 2026. Major customers include Apple, AMD, and Intel. The application of 2nm technology will drive TSMC's continued growth in smartphones and High-Performance Computing (HPC). 2nm technology is expected to become a key pillar for the company's future growth, with AI semiconductor revenue contribution projected to grow from 13% in 2024 to 34% by 2027.

$TSM


SK Hynix's HBM price negotiations with Nvidia are likely to turn out better than the market had feared

Summary: Shares UBS view that SK Hynix HBM pricing with Nvidia will beat market fears; implied bullish.

UBS: SK Hynix’s HBM price negotiations with Nvidia are likely to turn out better than the market had feared. https://t.co/6PdDViWxWr


Market Undervalues Amazon AWS's 'AI Potential'

Summary: Shares Barclays call that market undervalues AMZN AWS AI potential; Anthropic/Claude 5 ramp could add 4pp to AWS quarterly revenue growth.

Barclays: Market Undervalues Amazon AWS’s ‘AI Potential’; “Deep Integration” with Anthropic, API Business Already Surpassing OpenAI

• Barclays analyzed that Anthropic’s API business has already outpaced OpenAI in both scale and growth rate, contributing significantly to AWS’s revenue. According to the data, Anthropic’s API business is projected to surge to $3.907B in 2025 (YoY +662%), while OpenAI is expected to see only +80% growth over the same period.

• Furthermore, Barclays noted that with Anthropic beginning pre-training of Claude 5 in Q4 this year and adding inference revenue on top, Anthropic alone could lift AWS’s quarterly revenue growth rate by 4 percentage points.

$AMZN


LG Display will accelerate its OLED-focused business transition and achieve improved earnings not only this year but also next year

Summary: LGD gains iPhone OLED share from BOE, expanding AP4 line for iPhone 18; equipment suppliers Shinsung ENG, DMS, and Jusung Engineering seen as beneficiaries.

[Exclusive] LGD to Supply iPhone Panels Instead of China’s BOE- Fnnews

LG Display has begun expanding its Paju-based AP4 plant line to respond to increased orders for Apple iPhone OLED (organic light-emitting diode) panels. This comes as part of the iPhone panel volume previously handled by China’s BOE has shifted to LG Display. Analysts say this once again proves big tech’s trust in Korean display products. There is growing consensus that Korea should leverage its technology and quality edge to further expand its strategic gains during the global supply chain restructuring triggered by U.S.-China tensions.

According to Financial News’ coverage on the 15th, LG Display last month formed a task force (TF) for the expansion of the Paju AP4 line.

AP4 is LG Display’s 6th-generation mobile OLED production line, where TFT (thin-film transistor) substrates used in iPhone panels are processed. Back in late 2023, LG Display increased the production capacity of the AP4 plant from 30,000 sheets per month to about 45,000. Now, nearly two years later, it has decided on another expansion. The TF is expected to complete equipment selection this month, after which sequential purchase orders will be placed with equipment partners starting in October. Industry watchers expect that, with LG Display’s expansion of this line for the first time in years, the company will accelerate its OLED-focused business transition and achieve improved earnings not only this year but also next year.

Apple has been reducing BOE’s share of iPhone panel supply, and LG Display has absorbed part of that volume—hence the push for expansion. According to industry estimates, Samsung Display currently supplies 50% of iPhone OLED panels, LG Display 30%, and BOE had raised its share to about 20%. However, with U.S.-China trade conflicts dragging on, restrictions on Chinese firms are intensifying, and Apple, as a U.S. strategic partner, appears to be restructuring its supply chain to reduce reliance on China.

Through this expansion, LG Display is expected to secure an additional capacity of 15,000 sheets per month, bringing AP4’s total capacity to 60,000. The bulk of the 1.26 trillion won OLED investment plan approved by the board in June is also interpreted as being allocated to the AP4 line expansion. Mass production at the expanded line is expected to begin next year, with the new volume likely to be adopted in Apple’s next-generation iPhone (iPhone 18 series), anticipated for release in the second half of next year.

These developments have also heightened expectations for a rebound in earnings. LG Display posted an operating loss of 116 billion won in Q2 this year, reverting to a quarterly deficit after achieving consecutive profits in Q4 2023 and Q1 2024.

Still, the company has pledged to drive toward “annual profit” from the second half onward, based on an upgraded focus on OLED panels, raising expectations. Industry insiders believe that not only in the second half of this year but also with expanded iPhone OLED orders next year, LG Display will stabilize earnings and return to annual profitability.

The expansion is also expected to bring a boost to equipment makers. As LG Display pushes ahead with OLED investments, suppliers are expected to benefit from new contracts. Shinsung ENG is seen as a strong candidate to supply cleanroom systems for OLED production spaces. DMS has the capability to supply LG Display with wet process equipment such as cleaning, etching, stripping, and developing in an integrated package. Jusung Engineering is focusing on oxide deposition equipment as well as encapsulation deposition equipment.

An industry official said, “As LG Display accelerates its expansion of iPhone OLED lines, a trickle-down effect is expected across the domestic display equipment ecosystem.”

---

https://t.co/bc8XJoayU3


Shinsung ENG is seen as a strong candidate to supply cleanroom systems for OLED production spaces

Shinsung ENG (Korea cleanroom/display equipment) listed as 011930.KS

industry='Building Products & Equipment'


Jusung Engineering is focusing on oxide deposition equipment as well as encapsulation deposition equipment

Jusung Engineering 036930.KQ Korea KOSDAQ deposition equip


Summary: Bullish TSMC on AI-driven node demand and FX-adjusted beat; domestic memory IDMs to benefit from DRAM ASP rebound; focus on AI-linked CCL/PCB names.

250711_TSMC: June 2025 Performance

[Implication]

(1) TSMC's 2Q25 revenue met its guidance and slightly exceeded market expectations, despite negative exchange rate effects [strong TWD].

(2) TSMC is currently experiencing 1) continued demand for advanced nodes, centered on N3, for AI GPUs and ASICs, 2) anticipation for N2 for Apple in the second half of the year, and 3) even urgent orders for older nodes recently.

(3) Meanwhile, it is also notable that Nanya mentioned 1) a QoQ increase of +70% in bit shipments and 2) the possibility of a DRAM ASP rebound in Q3. This is because a rebound in D3 and D4 ASPs is highly likely to promote buyers' transition to D5, thereby positively impacting domestic memory IDMs.

(4) Furthermore, starting next week with TSMC's 2Q25 conference call, earnings announcements from major US tech companies are scheduled from mid to late July. Accordingly, there is a high probability that additional momentum will flow into the domestic memory industry.

(5) Meanwhile, material, component, and equipment companies are in a somewhat conservative situation due to persistent uncertainty in IDM CAPEX and continued sluggish demand for consumer products. Therefore, attention should be paid to CCL/PCB companies directly related to AI products.

[Contents]

(1) TSMC June revenue increased YoY +27%. 2Q25 revenue increased YoY QoQ +17%.

(2) In Taiwan Dollar terms, 2Q25 top line was NT933,792mnvs.NT927,996mn.

(3) Considering that TWD strengthened by +13.7% against the USD from April 1st to June 30th, it is essentially a huge surprise.

(4) By node, the continued ramp-up of N3, sustained strong performance of N5, and even urgent orders for some older generation processes are expected to result in a GPM that at least meets guidance, similar to the top line.

(5) Below are the opinions from each firm.

(6) Bernstein ■ Top line is consistent with the midpoint of guidance and slightly exceeds consensus by +0.5%. Considering the negative FX effect of approximately 5%, 2Q25 performance in USD terms exceeded the upper end by +3%. ■ Future price increases are expected to offset future FX headwinds.
(7) Wedbush ■ Our estimate is $30.2bn, which is approximately +5% higher than TSMC's guidance midpoint. ■ This strong performance is evidence of continued momentum in AI semiconductors.
(8) JPMorgan ■ '25 and '26 estimates adjusted down by -1% and -2% respectively, reflecting FX. ■ Q3 guidance is expected to show +3~6% growth QoQ in USD terms, and GPM is expected to slightly decline to around 56% in the second half due to FX impact. ■ N3 demand is expected to remain strong throughout the year, with additional upside expected in the second half due to the N3 transition of AI accelerators.
(9) Mizuho ■ Annual revenue growth guidance [+25%] could easily be raised, and it is possible to exceed the market consensus estimate of 27%. ■ However, +27% growth alone may not be enough for the stock price to maintain momentum until the end of '25.


a rebound in D3 and D4 ASPs is highly likely to promote buyers' transition to D5, thereby positively impacting domestic memory IDMs

Nanya Technology Corp listed on TWSE as 2408.TW


attention should be paid to CCL/PCB companies directly related to AI products

Korea CCL/PCB: Doosan+Iljin Materials basket

Drug Manufacturers - Specialty & Generic


TSMC will continue to maintain over 90% market share at advanced process nodes, and it maintains an 'Overweight' rating on TSMC with a target price of NT$1,275

Summary: Shares/endorses JPMorgan Overweight on TSMC with NT$1,275 PT; Intel foundry 'illusory competition' is net positive for TSMC's dominance.

Intel’s entry into foundry is actually a benefit for TSMC – JPMorgan

The “revival” of Intel’s foundry business as a potential threat to TSMC is likely overstated by the market.

On August 21, JPMorgan’s Technology and Telecoms team said in its latest report that Intel Foundry’s “illusory competition” is actually more beneficial to TSMC.

The analysts believe that the existence of Intel’s foundry business can in fact help TSMC avoid regulatory pressure stemming from a monopolistic position. JPMorgan also said that customer participation in Intel Foundry’s “revival plan” is not purely negative, and that the fundamental challenges facing Intel Foundry go far beyond capital.

The bank said TSMC will continue to maintain over 90% market share at advanced process nodes, and it maintains an “Overweight” rating on TSMC with a target price of NT$1,275.

The illusion of “having a choice” is more valuable than an absolute monopoly
JPMorgan’s analysts noted that aside from the initial frenzy (in the second half of 2020, when the market expected Intel to massively outsource manufacturing, TSMC’s P/E once reached 25–30x), talk of TSMC potentially becoming a monopolist in advanced-node foundry has not led to a significant uplift in its valuation multiple.

JPMorgan believes that such a potential monopoly would instead invite more scrutiny (from government agencies) and amplify geopolitical risks—factors that typically depress valuation multiples.

The bank argues that if there is a somewhat weaker competitor in advanced nodes that creates for customers an illusion of “having a choice,” it could actually be a more favorable scenario for TSMC. This is because it can ease ongoing scrutiny from governments and reduce pressure from policy demands such as “manufacturing reshoring to the United States.”

Customer participation in Intel Foundry’s revival is not purely negative
The market may view participation by TSMC’s major customers—such as Apple or Nvidia—in Intel Foundry’s revival plan as a direct loss of TSMC’s market share. But JPMorgan does not see this as purely negative.

The analysts point out that Intel Foundry would need to execute flawlessly on at least two to three advanced process nodes in order to gain credibility with fabless customers and achieve meaningful scale at the leading edge.

Meanwhile, Intel’s product business may continue to face competitive pressure from AMD, ARM, Nvidia, and in-house chips, forcing Intel to keep outsourcing more products to the most competitive foundry—TSMC.

The analysts believe that, regardless of how many customers support Intel Foundry, it is unlikely to resolve the inherent conflict of interest between the product business and the foundry business. Therefore, TSMC will continue to maintain over 90% market share at advanced nodes for the foreseeable future.

Intel Foundry’s issues go far beyond funding
While most observers attribute Intel’s foundry problems to funding, JPMorgan believes the fundamental challenges lie elsewhere. The report states:

Due to a severe deterioration in cash flow in its product business, Intel may currently be unable to fund foundry-related expansion, but even when Intel was quite dominant in CPUs and held a process technology lead, its foundry strategy never truly worked.

The analysts note that the foundry business requires a very different corporate culture, a service mindset, a focus on cost efficiency, and customer-centric innovation—capabilities that are difficult to cultivate quickly for a company that has focused on products for almost its entire existence.

Intel Foundry’s best chance of success is to adopt an N-1 approach (considering that even at N-2 or N-3 nodes there is a lack of a second supplier in the foundry space), which would reduce risk for potential customers and may make capacity ramps easier, rather than competing head-on with TSMC at the cutting edge.

However, JPMorgan warns that as the leading domestic foundry recipient of U.S. government investment, such a cautious approach may not be a viable strategy.

$INTC $TSM


Summary: BofA cloud capex review names NVDA, AMD, MRVL, AVGO as core beneficiaries of AI datacenter/accelerator buildout; upward-revised 2025/26 capex forecasts support the theme.

2Q Cloud Capex Review (BofA)

1. Industry Trends
The 2025/26 global cloud AI Capex forecast has been revised upward to +54%/+16% YoY, with total spending expected to reach $432B/$500B, respectively.
Q2 global hyperscale Capex came in at $112B, up +27% QoQ and +74% YoY, exceeding expectations.
All major cloud players are increasing the proportion of spend on servers (especially CPUs/GPUs). Capex intensity remains at 23–25%, well above the historical average of 10–12%.
GPU shipments to China could add about 10% to AI TAM, and there is potential for easing of U.S.–China trade tariff risks.
AI infrastructure demand is expanding beyond hyperscalers to neo-cloud providers, enterprises, and national-level projects.

2. Company-Level AI Investment Trends
Google: 2025 Capex outlook raised to $85B, with servers accounting for over two-thirds of spending.
Microsoft: Higher proportion of short-term assets such as servers; demand exceeds supply; backlog of $368B.
Meta: 2026 Capex expected to approach $100B, server-centric; hinted at the possibility of raising external capital.
Amazon: Q2 Capex +30% QoQ; 2025 Capex guidance of +40% YoY.
Oracle: Sustained high growth driven by cloud expansion.

3. AI TAM Outlook
AI accelerator market projected to grow from $126B in 2024 to over $650B in 2030, with a 2025–2030 CAGR of +26%.
AI servers to account for 85% of AI DC systems, reaching ~$700B by 2030.
HBM market projected to grow from $17B in 2024 to $87B in 2030.
Market share expectations: NVIDIA 80%+, AMD 5%, ASIC ecosystem 10–15%.

4. Key Beneficiaries
NVIDIA, AMD, Marvell, Broadcom: Core beneficiaries of AI datacenter and accelerator market growth.
Semiconductor equipment, EDA, and optical component companies also expected to benefit.

5. Large-Scale AI Projects by Country
U.S.: Stargate ($500B, ramping in 2028), Pennsylvania AI Energy Corridor ($90B).
Saudi Arabia: HUMAIN AI Factories ($30B, 2025–2030).
UAE: 5GW AI Campus (multi-phase expansion through 2030).
France, Malaysia, Brazil, Italy, and several other countries have AI projects exceeding $1B in scale.

6. Individual Stock Valuation & Risks
AMD: 33x 2026E EPS; AI growth and CPU market share gains expected, but timing/scale of Middle East projects remain uncertain.
Marvell (MRVL): 25x 2026E EPS; growth in custom silicon and HBM, but faces integration and rising debt risks.
NVIDIA (NVDA): 37x 2026E PE; maintaining dominance in the AI accelerator market, but subject to potential headwinds from gaming, China export restrictions, and power supply constraints.


AMD: 33x 2026E EPS; AI growth and CPU market share gains expected


Marvell (MRVL): 25x 2026E EPS; growth in custom silicon and HBM


Summary: Bearish MRVL: Trainium 2 MAX to be designed in-house by Annapurna, leaving Marvell with a revenue gap in H2 2025.

AWS's ASIC Strategy: Strong Momentum, but Risks Emerge
AWS's momentum in the ASIC (Application-Specific Integrated Circuit) space is currently very strong, and there's no questioning their commitment to actively deploying custom chips. However, we've identified several downstream risks, including the delay of Trainium 3, a mismatch in upstream and downstream forecasts, a reduction in Trainium 3 capacity, and cost reduction/pull-in demand pressures.

Trainium 3 and Trainium 2 Delays

According to our channel checks, AWS is postponing the launch of Trainium 3 due to insufficient preparation for its custom liquid cooling system. Consequently, the lifecycle of Trainium 2 may be extended. We anticipate Trainium 2 will be phased out around September 2025. Before Trainium 3's release, AWS might introduce a "Trainium 2 MAX" version, which will feature higher HBM capacity but still utilize an air-cooled design.
It's worth noting that while Trainium 3 is extended, Marvell's involvement in Trainium 2 is gradually decreasing. Trainium 2 MAX will be designed and manufactured independently by Annapurna, which implies that Marvell might face a market void in the second half of 2025.

轉發LumenAlpha substack
Jul 11, 2025

AWS 的 ASIC 勢頭近期非常強勁，我們並不質疑他們積極部署客製化晶片的決心。然而，我們發現下游存在一些風險，包括 Trainium 3 的延期、上下游預測不匹配、Trainium 3 的容量減少以及成本下降/拉動壓力。

Trainium 3 延期及 Trainium 2 延期


ARM will end up being the biggest loser in this NVIDIA–Intel deal... one of ARM's biggest future growth expectations—the push into notebooks—has basically evaporated... ARM's penetration in server CPUs will also be delayed... that, too, would undermine ARM's valuation

Summary: Short ARM: notebook growth story evaporates on NVIDIA-Intel partnership, server CPU share defense by x86 delays ARM penetration, and NVIDIA's own CPU architecture may cut royalty rates.

I’ve learned a lot from @insane_analyst as always.

I can’t shake the thought that ARM will end up being the biggest loser in this NVIDIA–Intel deal.

1. Windows on ARM essentially collapsing

After Qualcomm entered the WoA space, ARM quietly asked AMD, NVIDIA, and Samsung to join. But the strongest candidate, the NVIDIA + MTK partnership, has basically fallen apart.

Now, NVIDIA has climbed onto the back of a giant in the notebook SoC market: Intel.

So what happens to N1/N1X? NVIDIA won’t really need MediaTek anymore.

For ARM, the only hope for breaking into the notebook chipset market lies with AMD. But honestly… even if AMD is developing “Sound Wave,” it won’t have the bandwidth to bother with ARM while it’s busy fending off the Intel–NVIDIA alliance.

In other words, one of ARM’s biggest future growth expectations—the push into notebooks—has basically evaporated.

2. ARM’s penetration in server CPUs will also be delayed

As my friend IA pointed out, x86 had been steadily losing share in the server CPU market. It’s already fallen to around the 80% range.

But if Intel supplies x86 CPUs for DGX systems, x86’s market share will naturally be defended.

This directly threatens ARM’s valuation, because NVIDIA—the biggest player in the server CPU market—choosing x86 carries huge significance.

One more thing I recently learned: NVIDIA is actually designing its own server CPU architecture.

Would that lower ARM’s royalty rates? Hard to say for sure, but right now it looks more likely than not.

And that, too, would undermine ARM’s valuation.

---

Link: https://t.co/zMZ3e6fKmv


Summary: JPM adopts optical sector note: prefers Lumentum (beat expected on rev/EPS), followed by Coherent; cautious on Fabrinet due to high valuation and 1.6T ramp scrutiny.

Lumentum Holdings LITE US optical components

Optical Communications F4Q25 Outlook: Fundamentals Remain Solid, but High Valuations Set a High Bar for Earnings
JPM (S. Chatterjee, 11/08/25)

Stock prices for optical component companies have risen by an average of about 50% since early June, with valuations exceeding 27 times NTM (Next Twelve Months) earnings, setting a high execution bar for F4Q25 financial reports. Although the capital expenditure outlook for US-based cloud service providers and second-tier CSPs is robust, and there is a recovery in demand for optical components both inside and outside the data center as well as in telecom investment, the market is concerned that the magnitude of earnings revisions will be insufficient to justify the high valuations. Within the optical components sector, JPM generally prefers Lumentum, followed by Coherent, and remains cautious on Fabrinet.

Industry Background and Overall Judgment
The optical components sector has significantly outperformed the broader market in recent months. The capex outlook for US-based cloud providers and second-tier CSPs is favorable, and industry checks indicate strong demand from data center and telecom investments. However, the high valuations mean that earnings reports must significantly beat expectations to drive stock prices higher. The overall strategy is to remain cautious on earnings and to favor stocks with greater potential for upside.

Lumentum: Expected to Beat on Both Revenue and Profit
Driven by comprehensive growth in telecom, datacom lasers, and optical modules, improvements in production capacity and yield are contributing to upward revisions for both revenue and gross margin. F4Q25 revenue is projected to be $484 million (+57% YoY, higher than consensus and guidance), with a gross margin of 38.0%, an operating margin of 15.5%, and an EPS of $0.89, all of which are above market expectations. For F1Q26, revenue is projected at $515 million (+53% YoY) with a gross margin of 39.4% and an EPS of $0.97, both also above consensus. Its valuation is in line with the industry average, and it is positioned to benefit the most.

Coherent: Solid Execution but Lacks Short-Term Catalysts
Although its fundamentals are solid, investor focus has recently decreased due to a lack of new catalysts and macroeconomic uncertainty constraining industrial growth. F4Q25 revenue is projected at $1.55 billion (+18% YoY, higher than consensus and guidance), with a gross margin of 38.3% and an EPS of $0.98, slightly exceeding expectations. F1Q26 revenue is projected at $1.552 billion (+15% YoY) with an EPS of $0.99, which is largely in line with market expectations. In the long term, continuously improving revenue and profits, along with portfolio optimization, should help bolster confidence among long-only investors.

Fabrinet: 1.6T Ramp-Up Pace Under Scrutiny Amid High Valuation
The stock price has risen significantly, driven by ramp-ups at Amazon and Ciena, and is expected to ramp in sync with Nvidia's 1.6T optical modules. However, its current CY27E P/E ratio of over 21x is significantly higher than its peers, and the pace of the 1.6T volume ramp-up in F1Q26 will be under intense scrutiny. F4Q25 revenue is projected at $890 million (+18% YoY, higher than consensus and guidance), with an EPS of $2.67. For F1Q26, revenue is projected at $927 million (+15% YoY) with an EPS of $2.78, both slightly above expectations, but the high valuation magnifies the impact of any potential delay risks.


industry='Scientific & Technical Instruments'


Summary: Bullish NVDA: Stargate alone could add ~70,000 GB200 racks of demand, nearly matching all projected 2026 volume — massive incremental demand signal.

The particularly interesting part is this:

“JPMorgan estimated that if the 10GW Stargate project is implemented, it could generate demand equivalent to about 70,000 GB200 racks over the coming years.”

This is insane. A single Stargate project alone would add almost as much NVIDIA chip demand over several years as the entire total volume projected for 2026.

Hon Hai: Sovereign AI Investment May Reach USD 1 Trillion in the Next Five Years, Becoming a New Growth Driver for the Compute Market

Hon Hai believes that sovereign AI investment projects worth more than USD 1 trillion will emerge in the next five years, becoming a new and


현대차도 미워도 다시한번....이 아닌가 해서

Summary: Soft bullish lean on Hyundai Motor — 'hate it but give it another chance' sentiment implies a long.

@dons_korea 현대차도 미워도 다시한번....이 아닌가 해서 ㅎㅎㅎ


Summary: Goldman Sachs reiterates Buy on Taiwan CCL makers EMC (PT NT$1,530) and TUC (PT NT$410) on M9 CCL adoption driving 50-60% growth in 2026 and 100%+ in 2027.

CCL context: EMC = Elite Material Co. 2383.TW not US EMC

High-End CCL/PCB Demand Accelerates: M9 Adoption Brings New Opportunities

Goldman Sachs (A. Chang, 250929)

Goldman Sachs stated that the adoption of M9-grade CCL (Q-glass version) will accelerate significantly from the second half of 2026 to 2027, with application scenarios including Vera Rubin CPX midboards, major ASIC CSP projects (TPU, Trainium, META ASIC, etc.), Vera Rubin Ultra’s switchboards and compute boards, as well as backplanes in Kyber cabinet cross-back applications. EMC’s M9-grade CCL has passed customer certification and holds a leading advantage, with its ASP expected to exceed $400 per sheet, far higher than M7’s $100–110 and M8’s $160–180, significantly boosting the company’s profitability.

Although NVIDIA’s backplane PCB solution failed in its first sample test in September, raising investor concerns that the project might be delayed until 2028, Goldman Sachs believes that the first failure is part of normal R&D and does not affect the mass production schedule for the second half of 2027. It is expected that NVIDIA’s backplane PCB will then adopt 76–98 layers of M9 CCL, with the related market size reaching over $5 billion, while the CCL market space is expected to reach $2 billion from the second half of 2027 to the first half of 2028. Compared to the overall M7+ CCL market of about $8 billion in 2027, the contribution is significant.

In the short term, AWS’s PCB/CCL orders have been delayed to early 2026. Coupled with Trainium 2 demand gradually tapering off after the third quarter of 2025, some suppliers may face revenue pressure during 4Q25–1Q26. However, as TUC holds a relatively high share in Trainium 2.5/3 projects, the negative impact will be limited. Leading companies such as EMC can fill capacity gaps through other high-end AI server and 800G projects, even though a 5–10% production loss may occur during the capacity switching period.

Overall, Goldman Sachs expects that the CCL/PCB market driven by high-end AI projects will still maintain 50–60% year-on-year growth in 2026 and accelerate to over 100% in 2027. Any short-term pullback will become a good opportunity for medium- to long-term investment positioning. Goldman Sachs maintains its Buy rating on EMC and TUC, raising their 12-month target prices to NT$1,530 and NT$410, respectively.


Summary: Bullish NVDA: AI-era GPU capex grows annually unlike one-time internet infra, making Nvidia the structural beneficiary as internet companies shift spend from people to GPUs.

What are the differences in the operating logic and models between the AI era and the Internet era?

I've been thinking about this question recently, and I'm trying to look at it from a long-term perspective.

At the GTC conference two years ago, Jensen Huang unveiled a slide that announced the curtain opening on a new era: the PC Era -> the Internet Era -> the AI Era. The great hardware infrastructure build-out for each new era has begun, and it might be a repeat of the Cisco story, with its rising and falling tides.

In the Cisco era, once the infrastructure was built, the subsequent demand for it decreased significantly. It was like laying down the pipelines; internet companies built various applications on top of these pipelines. Even if the infra needed expansion, the construction costs were largely a one-time expense with long depreciation cycles thereafter. Consequently, after a brief explosion in the early internet era, Cisco quickly became an outcast. If you had bought its stock in 2000, you wouldn't have broken even until 2021, massively underperforming the S&P 500.

The mobile internet era was the same. Once the mobile SoC infrastructure was established, the number of phones that could be sold each year was basically fixed. This is why Qualcomm became the most illusory and poor investment in the semiconductor field over the past decade. The prosperity of the mobile internet economy didn't bring much incremental growth to Qualcomm; the underlying infrastructure only saw routine replacement and upgrade cycles for phones.

But looking back now, two years later, the AI era might not allow for a direct application of past experiences. The logic is different. Training infrastructure is not a one-time expense. The daily operating costs far exceed those of the Internet era. The heavy workload on GPUs means they have a lifespan of only two to three years and need replacement, and they are extremely expensive.

Why is Meta spending what amounts to hundreds of millions in signing bonuses per person to poach top AI talent for foundational models? Is this a foolish expenditure?

It makes sense from the perspective of Meta's high infrastructure costs. Since Meta is investing $70 billion a year in GPU infrastructure—a figure that is still growing—and is even getting directly involved in building gigawatt-scale data centers, it seems absolutely necessary to hire a group of the world's foremost experts to make the best use of this $70B-a-year luxury GPU data center. In comparison, a few billion dollars in recruitment fees even looks like a bargain.

At Google/OpenAI, "Compute-per-Researcher" is already a key management KPI. The idea that after Meta spends hundreds of millions on people, the corresponding compute power must be fully matched, helps to understand Meta's motivation for poaching talent at high prices when viewed in reverse.

The people working on foundation model training at these large companies (especially pre-training) are different from SDEs, and even different from MLEs, a new role that only emerged a decade ago. This is a completely new profession born of this era: managers of compute expenditure efficiency. Without experience training on thousand-GPU clusters, you don't even meet the entry threshold for the industry.

For the first time in human history, a new profession has emerged where a few dozen to a hundred people operate a massive army of machines with annual expenses equivalent to the GDP of a country (in the $100B range = Croatia/Costa Rica).

In the Internet era, companies like Google, Amazon, and Facebook didn't need to bear much pressure on infrastructure. They just needed to wait for the internet infrastructure to mature, and they could build a business model for information flow on top of this network. The network and compute costs for each request had an extremely low marginal cost, which made scaling incredibly effective. The distribution marginal cost was nearly zero, and the returns from rapid expansion were astonishing, growing exponentially with scale.

This characteristic also led to a phenomenon: the largest OPEX for internet companies was SDE labor costs. This is a typical feature of the tertiary (service) industry and a key reason why SDEs enjoyed a golden age over the past fifteen years, with their salaries continuously rising along with business expansion.

In the Internet era, the scarce resource was the work time of software engineers. The focus of financial reports was on OPEX salaries, and the moat was the network effect and the near-zero cost of infinite replication and distribution. While Google/FB also built their own data centers, CAPEX was around 10%.

However, in the LLM era, at least for the next few years, the scarce resources for internet companies have become GPUs and power supply capacity (at the gigawatt level). The heavyweight on financial reports is now CAPEX (Microsoft's CAPEX ratio is 33%, and Meta's is already approaching 40%). GPUs have undoubtedly become heavy, high-consumption assets.

For the first time in their history, internet companies are carrying balance sheets with high depreciation costs, similar to semiconductor foundries. The business model is almost shifting from "traffic × conversion rate" to "gross profit per token."

A key difference between the tertiary and secondary industries is the need to manage heavy assets and continuous operating costs. The nature of internet companies will transform from the tertiary sector to becoming more "industrialized" (like the secondary sector). The value of employees as assets will not be as precious. The golden age of unlimited SDE salary premiums may be difficult to sustain in the AI era. They will have to get a taste of the standard treatment for employees in the semiconductor industry—for example, asking for too high a salary could lead to the offer being rescinded.

As internet companies continuously shift resources from personnel to GPU purchases, squeezing personnel costs, cutting benefits, and constantly laying off and replacing staff, I think every SDE working at an internet company should buy Nvidia stock as a hedge (to compensate for the risk of being squeezed out of the value chain by GPUs).

In the AI era, the Internet era's characteristic of near-zero marginal cost, which favored scalability, faces a fundamental challenge. Not only are training costs no longer a one-time expense but they grow annually, but as for customer AI inference requests, due to the consensus on inference scaling and the need for larger models to achieve better results, the cost of inference may not decrease with the deflation in hardware compute prices.

It's like the mobile phone chip industry back then. As chip performance improved each year, battery life logically should have increased significantly. But the optimal business logic was to improve the user experience as much as possible within the power consumption limits people could tolerate (a battery that lasts a day), rather than maintaining the same experience and reducing power consumption. Otherwise, phones could have achieved standby times of several months.

AI inference in the AI era is the same. Once the cost of GPT-4o drops, people will just use the better-experiencing GPT-4.5. The cost of GPT-4.5 might be higher than GPT-4 was two years ago, and usage might be limited to just a few queries a day. An agent might become ten times cheaper to run for the same task in half a year, but a new, more effective agent will pull the price right back up.

This AI inference cost might behave just like mobile chip power consumption back then: within the cost limits that people (and businesses) can tolerate, the experience will be improved as much as possible. Therefore, AI inference costs won't necessarily decrease, meaning the distribution marginal cost, a key metric in the Internet era, will become much higher.

This also leads internet companies to push their investment in this area to the limit of what their financial reports can tolerate, to maximize their compute capacity. This might lead to an unprecedented phenomenon: until scaling laws fail, the growth in compute spending will not be lower than the company's revenue growth.

Starting from this change in the macroeconomic background—that is, starting from the differences in the underlying compute characteristics of AI and the internet—we can perhaps try to deduce what strategic and business model changes this will bring.

(To be continued)

AI时代和互联网时代的运行逻辑和模式有什么不一样？

最近一直在思考这个问题，也在尝试从时间线拉长的角度去看一看

两年前的GTX大会，老黄po出来的这张图宣布了时代大幕的拉开，PC时代->互联网时代->AI时代，每一个时代前期的硬件大基建时代开始了，可能又是一次cisco时代涨潮退潮的故事重现 https://t.co/PvqPCJgRqi


Summary: Morgan Stanley reiterates Equal Weight on ASML with EUR 660 target; 2026 uncertainty offsets strong orders, medium-term growth story less clear.

Morgan Stanley) ASML Earnings Quick Analysis: EW, Target Price EUR 660

Key Summary

1. Comments on potential stagnation in 2025 equipment unit shipments and uncertainty about 2026 growth may raise some concerns.

2. Strong new orders are offset by 2026 uncertainty.

3. 2025 guidance was narrowed to the midpoint of previous forecasts (approximately 15% growth year-over-year from 2024).

4. New orders reached EUR 5.5 billion, exceeding estimates (Morgan Stanley's estimate of EUR 4.6 billion), with EUR 2.3 billion coming from EUV equipment (estimated at approximately 10 units).

5. Margin was better than expected due to strong IBM (Installed Base Management) revenue and one-off factors, but the outlook for a slowdown in the upgrade business in the second half and a consequent weaker gross margin (GM%) forecast was maintained.

6. In conclusion, this announcement somewhat increased the uncertainty surrounding the previously presented medium-term growth story.

Announcement Details
Q2 new orders (Order Book) recorded EUR 5.5 billion, surpassing the consensus (EUR 4.5 billion), with EUR 2.3 billion in EUV equipment orders. The company adjusted its full-year 2025 guidance to "approximately 15% growth compared to 2024," which aligns with the midpoint of the previous guidance, EUR 32.5 billion.

Within this growth outlook, ASML projected that the EUV business unit would grow by 30%, the IBM (Installed Base Management) business unit by 20%, and the DUV business unit would remain at a similar level to 2024. Additionally, based on the current order backlog, the company maintained its previous expectation that China's revenue share would exceed 25% in 2025.

Regarding the 2026 outlook, considering macroeconomic and geopolitical situations (including tariffs), the company took a more cautious stance than before, stating that they are "preparing for growth but cannot confirm it at this stage."


Summary: Goldman Sachs reiterates Buy on Samsung, raises 12M PT to KRW 96,000 on memory upcycle, HBM ramp, and EPS upgrades of 8–24%.

Samsung Electronics: Profit Outlook Improvement in 2026, Target Price Raised to 96,000 KRW (Goldman Sachs)

Earnings Outlook & Key Revisions
    • 3Q25 operating profit forecast raised from KRW 8.9tn → KRW 10.2tn
(reflecting strong traditional memory shipment & pricing, reduced losses in Foundry/System LSI, and higher KRW/USD FX assumptions).
    • 2025–2027 EPS forecasts lifted by 8–24% (factoring in stronger DRAM/NAND pricing assumptions and HBM shipment growth).
    • 12M target price raised from KRW 84,000 → KRW 96,000; Buy rating maintained.

⸻

2. Business Unit Highlights

1) Memory
    • DRAM ASP expected to rebound from 2Q25 and rise for six consecutive quarters through 3Q26, driven by server demand.
    • NAND ASP projected to increase for four consecutive quarters from 3Q25 to 2Q26.
    • Memory upcycle supported by hyperscaler AI CapEx expansion, server replacement demand, synchronized procurement patterns among customers, and constrained supply capacity.
    • Rising memory content per device (iPhone 17 adopting 12GB DRAM, higher base NAND capacity) further supports demand.
    • DRAM ASP outlook revised upward vs prior forecasts: ’25E +2%, ’26E +20%, ’27E +11%.
    • NAND ASP outlook revised upward: ’25E +2%, ’26E +18%, ’27E +7%.

2) HBM
    • 3Q25 shipments expected to grow over 80%, generating revenue of about USD 2.3bn (doubling YoY).
    • Full-scale ramp of HBM3E 12-high shipments, with higher chances of Nvidia qualification → positive spillover to HBM4 qualification prospects.
    • HBM revenue forecasts raised by 7% to USD 14bn in ’26E and USD 19bn in ’27E.

3) Foundry / System LSI
    • 3Q25 operating loss forecast narrowed from -KRW 1.7tn → -KRW 1.1tn.
    • Utilization improvement driven by demand for Nintendo Switch 2 SoC (8nm) and Galaxy Z Flip7 (Exynos 2500 on 3nm).


Summary: JPM's Wagner sees Nvidia H20 write-back of $10B+ positively impacting Samsung Electronics Q3 earnings as primary HBM3 supplier.

JPM: Samsung Electronics (SEC) and Nvidia's H20 Model

For reference, Samsung Electronics (SEC) is the primary supplier of HBM3 chips used in Nvidia's H20 model.

Wagner, JPM's Asia Tech Special Sales Lead, believes that Nvidia could record over $10 billion in cost write-backs related to its H20 chips. This could have a positive impact on Samsung Electronics' Q3 earnings.


Summary: BESI seen as strongest hybrid bonder supplier candidate; Hanwha Vision a latecomer with upside, as hybrid bonding reshapes HBM packaging equipment market by 2027–2028.

Hybrid Bonder – Who Will Do Better?

ShinYoung Securities

Transition from TC (Thermal Compression) Bonder to Hybrid Bonder from 2027

Hybrid bonding is a technology that connects chips without solder bumps. In contrast to current HBM that uses TC bonding, where the micro-bump pitch remains around 40–55㎛, hybrid bonding can be reduced to below 10㎛, improving density by about 4–5x on the same area.

Moreover, TC bonding passes through bumps and TSVs, resulting in relatively high parasitic resistance and higher power consumption per transmission. Hybrid bonding minimizes resistance paths, enabling ~30–40% power savings at the same performance level. In terms of density, bandwidth, and power efficiency, hybrid bonding is expected to outperform TC bonding.

Hybrid bonding has already been applied in some logic semiconductors and NAND, and is expected to be adopted in HBM starting in 2027.

Market Size Expected to Reach Trillions of KRW by 2028

Hybrid bonding is projected not only to provide technological superiority but also explosive growth opportunities in terms of market size. Currently, DRAM makers’ combined HBM production capacity is about 400K/M, and is expected to expand to 500K/M next year with additional capacity. Assuming conservative annual expansions of 50K/M during 2027–2028, HBM capacity could reach 600K/M by 2028.

If HBF adds another 100K/M capacity by 2028, total TSV capacity is estimated at 700K/M. Assuming hybrid bonding is applied to HBM4E and HBF from the second half of 2027 and penetration reaches 50% in 2028, about 350K/M would be hybrid-bonded.

For TC bonders, about 1.5–2 units are needed per 1K/M, whereas hybrid bonders, which require greater precision, will likely require 2 units. Thus, applying hybrid bonding to 350K/M TSV capacity would require roughly 700 new bonders.

While TC bonders are currently priced at just over KRW 3 billion per unit, hybrid bonders are estimated to be around KRW 4 billion due to their technical complexity. Based on replacement demand alone, this implies a market of about KRW 2.8 trillion.

We believe that, rather than focusing on short-term TC bonder unit growth, it is more critical in the mid-to-long term which companies secure hybrid bonding capabilities and their positioning in the ecosystem.

Who Will Do Better?

Currently, SK hynix (000660.KS) is known to be co-developing and evaluating hybrid bonders with two suppliers. BESI of the Netherlands already has development and application experience in logic semiconductors and is considered the strongest candidate supplier.

At the same time, Hanwha Vision (489790.KS) is said to have achieved positive results in recent qualification tests, suggesting that despite being a latecomer, it has the potential to secure meaningful opportunities.

Ultimately, hybrid bonding is expected to not only drive technological evolution but also reshape the bonder equipment market into a multi-trillion won scale, establishing itself as a key element in transforming the next-generation memory packaging supply chain landscape.


Hanwha Vision (489790.KS) is said to have achieved positive results in recent qualification tests, suggesting that despite being a latecomer, it has the potential to secure meaningful opportunities

Hanwha Vision 489790.KS Korea as cited in context

industry='Security & Protection Services'


Summary: UBS reiterates MRVL as core pick; LRCX and AMAT benefit from silicon-inside cooling; ASMI lowers 2H25 guidance with Intel as key drag.

Latest Developments in the U.S. Semiconductor Industry: Tariffs, MRVL Growth Vectors, ASMI Outlook, and New Applications of Silicon-Inside Cooling

UBS (T. Arcuri, 250929)

The market is closely watching the Trump administration’s proposed 1:1 chip tariff rule. According to the plan, tariffs will be calculated based on the value of the chip, and credits or transitional exemptions may be granted to newly built fabs that commit to investing in the U.S. UBS pointed out that the expansion plans of TSMC and Intel by 2030 may be sufficient to meet domestic U.S. advanced logic demand, but the localization levels of DRAM and NAND are significantly insufficient. Therefore, the policy is expected to include a longer transitional period. Similar tariff cases in the pharmaceutical industry also show that 100% tariffs are often accompanied by clear exemption arrangements.

At a recent event, MRVL reiterated its diversified growth path in the data center business. The company expects global DC capital expenditure to expand at an 18% compound annual growth rate and to outperform over the long term, mainly driven by optical modules and XPU attach businesses. Management confirmed that Custom ASIC business will follow DC capex growth in 2026, and Microsoft’s XPU in 2027 is expected to become the next major catalyst. XPU attach projects cover NICs, memory expansion, etc., with individual project lifecycle revenues of over $200 million, and are expected to contribute about $1.9 billion in annual incremental revenue by 2028. On optical modules, after the acquisition of IPHI, the DSP business has scaled up 5x and is expected to continue to outpace DC capex growth. Networking products such as switches and Retimer/AECs also show strong growth momentum. In addition, the company announced a new $5 billion share buyback program. UBS believes MRVL remains one of the core recommended stocks for the rest of 2025.

ASM International, at its Investor Day, lowered its 2H25 forecast, expecting a sequential decline of 5–10%, mainly due to differentiated customer demand, with Intel likely being the biggest drag. UBS believes the impact on U.S. equipment makers is limited, as LAM, KLA, and AMAT have largely digested the risks from Intel’s WFE cuts. ASMI also pointed out that declining power/analog demand has a negative impact on LAM and AMAT. On the other hand, the penetration of atomic layer deposition (ALD) at advanced nodes continues to rise, with the number of GAA layers increasing by more than 20% from 2nm to 1.4nm, and the share of front-end ALD is expected to rise from 50% to 60%. This will intensify competition with LAM’s single-wafer ALD business.

However, UBS believes that LAM can offset this through new technology opportunities such as dry resist, backside power delivery, and moly ALD. In advanced packaging, ASMI plans to increase its market share from 15% to over 30%, with part of the share coming from AMAT’s handover. Microsoft recently showcased a new breakthrough in silicon-inside cooling based on microfluidic technology, achieving 3x heat dissipation efficiency and a 65% reduction in peak temperature, which is expected to significantly improve AI chip energy efficiency. The related technology relies on Bosch DRIE etching to build micro-fin heat sinks on the backside of the chip, and TSMC has also proposed a similar IMC-Si solution incorporated into the CoWoS-R process. UBS believes LRCX (with a leading share in the TSV etching market) and parts of AMAT will be the main beneficiaries. Overall, this development further reinforces the leadership of deposition/etching processes in future WFE growth.


UBS believes LRCX (with a leading share in the TSV etching market) and parts of AMAT will be the main beneficiaries


parts of AMAT will be the main beneficiaries


Summary: TSMC purging China-exposed suppliers boosts its own attractiveness while creating downside pressure on Taiwan local equipment/materials suppliers with high China revenue exposure.

Summary:

- Full exclusion of Chinese equipment from TSMC’s 2nm line → aimed at avoiding U.S. regulations; Chinese equipment firms (AMEC, Naura, Xinkailai, etc.) are excluded from the list.

- Companies with profit margins above 40% and those highly dependent on China sales are under close scrutiny and may be removed from TSMC’s supply chain.

- High-margin companies are expected to face price reduction requests of up to 15%.

- For Taiwanese local companies that have recently expanded their sales to Chinese customers, China orders are attractive due to high margins and large scale, which puts them in conflict with TSMC’s interests.

Investor Insights
- Expanded risks for Taiwanese local equipment and materials suppliers, with potential downside pressure on share prices → a valuation discount factor.

- Companies with high revenue exposure to China → heightened conflict with TSMC, leading to greater long-term risks.

- In contrast, TSMC itself will become more attractive.

- Supply chain cost reductions (strengthened bargaining power) → a factor stabilizing gross margins.

- Minimization of U.S. regulatory risks → continued maintenance of strategic advantages.

TSMC Reportedly “Purges” Local Supply Chain: High-Margin, China-Dependent Firms May Be Eliminated

News that TSMC’s 2nm production lines will completely phase out Chinese equipment has sparked concern, with Taiwan’s semiconductor industry currently on edge. TSMC has also issued a https://t.co/dj3y16PX9y


Expanded risks for Taiwanese local equipment and materials suppliers, with potential downside pressure on share prices → a valuation discount factor

Taiwan semiconductor sector proxied by EWT ETF