Summary: Shares Morgan Stanley Equal-Weight on MU with PT raised to $135; neutral risk-reward due to high valuation and HBM supply-demand risks despite AI-driven earnings strength.

Micron: Performance Continues to Improve Driven by AI, But Valuation Pressure and HBM Supply-Demand Risks Warrant Attention

Morgan Stanley (J. Moore, 2025/06/26)

Morgan Stanley believes that Micron has shown strong performance in recent quarters, benefiting from AI-related demand and an expanding share in HBM. However, the current high valuation, coupled with the uncertainty in HBM growth trajectory and instability in consumer products, renders the overall risk-reward neutral.

Micron's May quarter results were robust, with EPS reaching $2.50, and guidance exceeding market expectations. This was primarily driven by improved DRAM pricing and increased shipments fueled by AI demand. Although DRAM core pricing has reached an inflection point and the consumer product mix still poses a drag, the AI-related product mix (HBM, DC LPDDR, 96+GB RDIMM) supported the gross margin performance. Morgan Stanley anticipates this improving trend to continue into 2025 and has raised its target price to $135.

The HBM business continues to expand, with annualized revenue surpassing $6 billion in May, and Micron maintaining its leading position alongside SK Hynix. Nevertheless, Morgan Stanley cautions that Samsung's HBM4 validation on the Rubin platform may begin in the September quarter, which, if successful, could lead to price pressure. At the same time, there's a possibility that the overall HBM TAM expectation is overestimated, with a discrepancy in the revenue ratio compared to GPU/ASIC, thus requiring continued attention to the actual demand fulfillment in the future.

AI inference demand is driving both volume and price increases for DRAM, supporting Micron's increased share in data center-related products. However, Morgan Stanley points out that the DRAM industry's pricing inflection point has already been factored into the market. Micron's current 3x PB valuation is considered quite expensive, and its free cash flow remains limited. Furthermore, despite the positive AI trend, the rapid growth trajectory of HBM could still be affected by inventory, changes in customer pull-in pace, and a structural overestimation of TAM.

Consumer-side shipments (e.g., Mobile) showed significant quarter-over-quarter improvement, though still negative year-over-year. Morgan Stanley believes that the recent rebound in shipments more reflects inventory replenishment rather than pull-in. The negative impact of the consumer mix is expected to gradually dissipate in the second half of the year, and DRAM prices may continue to rise in the future. Although tariff uncertainties persist, their current impact does not constitute a primary downside risk.

Morgan Stanley expects the positive trend to continue into the second half of 2025, but most driving factors are already reflected in the current stock price. The valuation model is based on a cyclical EPS calculation of $7.5, with the target price raised from 14x PE to 18x PE, considering the structural improvement in profitability driven by AI. However, due to the low correlation between free cash flow and profitability, Micron maintains an "Equal-Weight" (EW) rating. Overall, Micron still has structural highlights, but further stock price appreciation requires stronger validation from the AI industry chain.

$MU


Summary: Morgan Stanley flags strategic and pricing headwinds for Infineon as TSMC exits GaN/Si and PSMC enters, lowering barriers and intensifying competition.

Infineon: TSMC's Exit from GaN/Si Capacity May Impact Its Supply Chain and Pricing Environment

Morgan Stanley (L. Simpson, 25/07/03)

Morgan Stanley notes that TSMC's plan to exit its GaN on Silicon production line by 2027, prompting Navitas to shift to PSMC, could lower the entry barrier for the GaN/Si industry. This might have strategic and pricing implications for Infineon.

TSMC Plans to Exit GaN/Si Business by 2027, Navitas Gradually Transfers Capacity to PSMC

Navitas has announced that TSMC will cease its GaN/Si capacity by July 2027, signaling TSMC's gradual divestment from certain non-core businesses, especially in areas facing significant competition from low-cost manufacturing in China. Navitas will shift to PSMC, with device qualification expected to be completed by Q4 2025 and mass production of 100V products beginning in H1 2026. The transition for 650V products will be completed within the next 12 to 24 months.

Infineon May Benefit from Potential GaN Strategic Cooperation Opportunities, But Also Faces Price Pressure

Morgan Stanley points out that after TSMC's exit, other GaN device manufacturers may seek to collaborate with Infineon on its 300mm production lines or process IP. Concurrently, PSMC's entry into GaN manufacturing could lower the industry's entry barrier, creating price competition similar to the SiC market, thereby exerting some pressure on Infineon.

Infineon May Need to Enhance Internal GaN Device Reliability Testing Capabilities

Previously, Infineon and GaN Systems utilized TSMC for GaN device reliability testing. In the future, as TSMC gradually exits, Infineon may need to build more of its own reliability testing capabilities to ensure product quality and consistency with customer requirements.

Infineon Still Holds Leading Patent Reserves in GaN/Si Field

Despite the changing competitive landscape, Infineon still possesses an extensive intellectual property portfolio in the GaN/Si field, encompassing 350 patent families. This provides a technological barrier for maintaining its long-term competitive advantage.


Summary: Shares bearish sell-side report on CoreWeave: debt financing wipes shareholder returns and GPU residual value assumptions are unrealistic.

structural marker; pre-classified as canonical yfinance ticker

I’d like to share a sell-side report on CoreWeave.
There are many points I agree with, so I thought you might find it worth reading.

Brannin McBee, Chief Development Officer (CDO), explained in an interview with Barron’s last month, “Our model is not one where we purchase infrastructure first and wait for customers to come. We sign ‘take-or-pay’ contracts with customers and then invest in GPUs, data centers, and other infrastructure based on those contracts.”

However, analysts Gil Luria and Alexander Flat pointed out, “The example contract presented by CoreWeave actually highlights how this model makes it difficult to generate shareholder returns.”

They also analyzed that “In the contract example, CoreWeave assumes it will finance 15% of the infrastructure purchase cost with its own equity. But this is an unrealistic scenario that does not reflect the company’s actual capital capacity.”

“In reality, the company will inevitably have to rely heavily on other forms of debt financing. Considering the average interest rate of 9.5%, shareholder returns will essentially be wiped out,” they explained.

They further raised doubts about the residual value CoreWeave assigned to its GPU assets after the contracts expire. The company estimated that the residual value would amount to 75% of the total contract revenue, but the analysts criticized this figure as highly unrealistic. They added, “Four years from now, the revenue per GPU will likely be less than 25% of today’s level.”


recommends the Big 3 equipment stocks, with a rating order of KLAC > LRCX > AMAT. KLAC's FY26 EPS estimate is raised by 3% due to increased market share, and its target price is raised to $1,035

Summary: Citi upgrades WFE outlook and Big 3 equipment stocks KLAC ($1,035 PT), LRCX ($108 PT), AMAT ($220 PT) on eased geopolitical risk, AI capex, and memory demand recovery.

industry='Semiconductor Equipment & Materials'

US WFE: Geopolitical Risks Temporarily Eased, WFE Outlook Upgraded, AI and Memory Demand Jointly Drive Upturn Cycle
Citi (A. Malik, July 07, 2025)

Citi notes that recent consensus reached between the U.S. and China has unusually alleviated concerns about equipment embargoes and raw material export controls, bringing temporary certainty to WFE investment. Driven by both AI capital expenditure and memory demand recovery, Citi has upgraded its 2025/26 WFE outlook and recommends the Big 3 equipment stocks, with a rating order of KLAC > LRCX > AMAT.

China Restriction Risks Lifted, Industry's Biggest Uncertainty Temporarily Eased
Citi states that one of the biggest risks suppressing valuations in 1H 2025, namely the escalation of U.S.-China policies, has been temporarily removed. China's reinstatement of rare earth magnet export licenses for six months and the U.S.'s lifting of EDA sanctions, among other "countermeasures," have temporarily cleared the risk of broad equipment embargoes. Even if the U.S. were to revoke equipment exemptions for Samsung and TSMC in China in the future, the impact on WFE would be relatively controllable, as U.S. equipment suppliers have a higher dependence on Chinese clients. Based on this, Citi has upgraded the industry framework from Phase 1 to Phase 2, representing a release of medium-term risk.

WFE Forecast Upgraded, 2025 Stabilizes, 2026 Enters Upturn Cycle
Citi has raised its 2025/26 global WFE forecast to $100 billion/$110 billion, with annual growth rates of +1%/+10% respectively, a significant improvement from previous expectations of -5%/+2%. The main drivers are the rebound in memory prices (upward revision of 3Q25 DRAM/NAND price estimates) and a high capital expenditure cycle driven by AI, particularly an upward revision in NAND equipment capital expenditure. In the medium term, to support the continued growth of the AI semiconductor TAM until 2030, the industry needs an additional $15 billion to $20 billion in WFE investment annually.

Big 3 Ranking Adjusted, KLAC's Leading Logic Stronger, Price Targets Fully Upgraded
Citi believes that manufacturers with the strongest drivers from leading-edge processes and advanced packaging will have the greatest upside elasticity, in the order of KLAC > LRCX > AMAT. Specific adjustments are as follows: KLAC's FY26 EPS estimate is raised by 3% due to increased market share, and its target price is raised to $1,035 (28x P/E); LRCX's FY25/26 EPS is raised by 2%/16% respectively, and its target price is raised to $108 (23x P/E); AMAT's FY25/26 EPS is raised by 2%/8%, and its target price is raised to $220 (20.5x P/E), fully reflecting a more positive WFE outlook.

Strong Correlation with Cloud CapEx, 2026 WFE Growth Logic Supported by Data
Over the past decade, WFE has shown a high positive correlation (correlation coefficient ~0.88) with the capital expenditure of top cloud providers. Citi forecasts that the Big 4 cloud providers' capital expenditure will grow by 35%/15% in 2025/26 respectively, driving WFE's synchronized upward trend. Current Chinese customs data shows a significant increase in imports of deposition and etch equipment, mainly from Malaysia (presumed to be Lam) and South Korea, indicating that memory capital expenditure has gradually started.

Macroeconomic and Policy Factors Remain Key Risks
Citi cautions that a macroeconomic slowdown and policy reversals remain major risks. Current forecasts for global GDP growth are 2.4% in 2025, lower than 2.8% in 2024, with a modest recovery to 2.5% in 2026. Furthermore, if a future Trump administration takes office and tightens policies towards China/Taiwan again, it could also impact the medium-to-long term WFE trend and equipment stock valuations.


LRCX's FY25/26 EPS is raised by 2%/16% respectively, and its target price is raised to $108


AMAT's FY25/26 EPS is raised by 2%/8%, and its target price is raised to $220


UBS maintains NVIDIA's target price at $175

Summary: UBS maintains NVDA Buy/target at $175; author shares the bullish rating.

UBS maintains NVIDIA’s target price at $175 https://t.co/HjcdluQPyP


Summary: Shares JPM bullish TSMC analysis: CoWoS/WMCM capacity ramp, ASP uplift, and Apple WMCM adoption drive multi-year revenue growth.

TSMC: CoWoS and WMCM Capacity Expansion Rebalancing, AI Demand Upgrade Drives Packaging Diversification

JPM (G. Hariharan, 2025/06/26)

TSMC's CoWoS and WMCM capacity plans for 2025-2027 show dynamic adjustments in response to AI platform evolution, customer diversification, and packaging process optimization. Overall supply and demand are expected to balance out in 2026.

CoWoS Capacity Continues to Grow Through 2027, But Short-Term Tightness in 2025 Due to Weak China Demand

The agency expects TSMC's CoWoS capacity to reach 69k wfpm by the end of 2025, rising to 84k/102k wfpm in 2026/2027, slightly lower than previous expectations. This is primarily due to U.S.-China export restrictions and declining demand from Chinese customers (e.g., NVDA H20). Nevertheless, driven by CoWoS-L migration and customer structure diversification, overall supply and demand will balance out in the second half of 2026, with CoWoS-L accounting for 64% in 2026 and a significant increase in ASP.

NVDA Dominates AI GPU Packaging Demand, But Unit Shipment Growth Slows in 2026

The introduction of the Rubin platform and Vera CPU will drive a 25% increase in NVDA's CoWoS demand in 2026. However, due to Blackwell inventory adjustments and a void in the Chinese market, GPU shipments are not expected to grow year-over-year. Starting in 2027, demand will be boosted by Rubin Ultra (80% increase in package area) and AI ASIC demand. AMD's momentum is weaker in 2025-2026, with the MI450 series possibly beginning larger-scale shipments in the second half of 2026.

ASIC Customer Structure Diversifies, Broadcom and AWS Drive 2026 Growth

Broadcom continues to benefit from its dominant position in the Google TPU project, while Meta will begin its first large-scale mass production of CoWoS accelerators in 2026. AWS's Trainium 3, supported by Alchip, will ramp up in 2026 and continue to scale in 2027. MediaTek's 2026 outlook is impacted by delays in the TPUv7e project, but TPUv8e is still a collaboration with Google, potentially offering future upside.

Non-AI Processors Gradually Adopt CoWoS, Boosting Packaging Demand for CPUs and Networking Products

CoWoS applications have expanded to non-AI processors, such as NVDA Vera CPU (using CoWoS-R) and AMD Venice Server CPU (combining HBM), which will adopt high-density packaging solutions. As interconnection bottlenecks between logic and memory intensify, more processor categories are expected to adopt CoWoS and its derivatives in the next 2 to 3 years.

Apple's WMCM Packaging to Ramp Up Significantly in 2026, Driving InFO to WMCM Conversion

Apple will adopt WMCM packaging (featuring the A20 Pro chip, N2 process) in all high-end iPhones (including foldables) starting in 2026. Estimated WMCM capacity is 27k wfpm by the end of 2026, reaching 40k wfpm in 2027, with long-term potential demand of up to 90k wfpm. WMCM is more expensive than InFO (approximately $2k-$2.5k per wafer) but offers simplified processes, positively impacting TSMC's revenue. InFO capacity will be reduced by more than half in the future, with some production lines being converted to WMCM.

$TSM


NVIDIA has effectively secured 'visibility' into annual data center revenue exceeding approximately $300 billion. This figure is more than 50% higher than Wall Street's consensus for NVIDIA's FY2026 data center revenue

Summary: Long NVDA: $1T pipeline implies $300B+ annual DC revenue, 50%+ above Wall St consensus, backed by multi-GW AI infrastructure projects.

Bullish Outlook on NVIDIA by Mirae Asset Securities

Meanwhile, NVIDIA announced during its Q1 FY2026 earnings call that it has "visibility into tens of gigawatts of AI infrastructure projects in the not-too-distant future."

Assuming this project pipeline is a "minimum" of 20GW, and applying NVIDIA's directly mentioned revenue per GW of approximately $40 billion to $50 billion, we can see that the minimum revenue opportunity from this pipeline alone is about $1 trillion. Jensen Huang's assertion that there is a "trillion-dollar opportunity" when advocating for accelerated computing and AI factory concepts does not sound like an exaggeration.

NVIDIA did not specify the exact timing for the execution of these project pipelines, but it is highly likely that these projects will be pushed forward within the next three years. Even assuming a three-year timeframe from now, NVIDIA has effectively secured "visibility" into annual data center revenue exceeding approximately $300 billion. This figure is more than 50% higher than Wall Street's consensus for NVIDIA's FY2026 data center revenue, which stands at $200 billion.

Of course, this may seem like a very optimistic forecast. However, considering that emerging cloud-related companies like Crusoe alone possess a project pipeline of about 20GW, it is not entirely unrealistic. Furthermore, it should be noted that Crusoe is just one of many development companies.

$NVDA


Summary: Goldman adopts bullish stance on optical module names; raises PTs 23-82%, bullish on Innolight/Eoptolink valuation re-rating and HG Tech order overflow opportunity.

Eoptolink Technology 300502.SZ China optical modules

Optical Modules: Rising Attach Ratio Drives Significant Increase in 800G/1.6T Optical Module Demand, Second-Tier Manufacturers Expected to Benefit
Goldman Sachs (J. Guo, July 07, 2025)

Goldman Sachs points out that AI server reference designs show a significant increase in the attach ratio of GPUs/ASICs to optical modules, leading to a substantial upward revision in demand expectations for 800G and 1.6T optical modules. Concurrently, second-tier manufacturers are likely to benefit from order overflow due to capacity constraints at leading manufacturers.

Rising Attach Ratio Boosts Optical Module Demand
Based on the latest AI server reference designs, Goldman Sachs estimates the attach ratio for H100/GB200 at 1:3, rising to 1:4.5 for B300, and as high as 1:8 for some ASIC architectures (such as DSF). This is primarily driven by system bandwidth upgrades and the deployment of high-speed NICs like ConnectX-8. The firm has thus raised its 2025/26 800G shipment forecasts to 19.9/33.5 million units (previously 18.1/21.2 million units) and its 1.6T forecast to 7 million units in 2026.

Upward Revision of Profit Forecasts and Convergence of Valuation Spreads Highlighted
Building on the upward revision of shipment forecasts, Goldman Sachs has raised its net profit forecasts for covered optical module manufacturers for 2025-27 by up to 42%, and their 12-month target prices by 23%-82%. The report highlights two key investment themes: first, the trend of valuation convergence between Eoptolink (新易盛) and Innolight (中际旭创); second, the opportunity for second-tier manufacturers like HG Tech to gain order overflow amidst capacity tightness.

Second-Tier Manufacturer HG Tech Expected to Benefit from Order Overflow
Goldman Sachs notes that with rapidly growing 800G capacity demand, leading manufacturers need to significantly expand production. Their reliance on manual processes also limits the pace of expansion. Second-tier manufacturers with existing capacity and product capabilities are well-positioned to take on excess orders. HG Tech has a capacity of 100,000 units/month in Thailand and has passed testing and commenced small-batch deliveries of 800G products. If mass shipments can be achieved in the second half of 2025, it could bring up to 24% upside to its 2026 profits.

Eoptolink and Innolight Valuation Gap Expected to Further Narrow
Despite similar projected profits and growth rates for both companies from 2025-27, Eoptolink (新易盛) currently has a market capitalization that is only 75% to 80% of Innolight (中际旭创)'s, and its 2026 P/E still trades at approximately a 20% discount. Goldman Sachs expects that if Eoptolink's Q2 2025 earnings report shows continued matching or surpassing of profits, it will drive a further narrowing of the valuation gap. Furthermore, increased shipments of its 1.6T self-branded optical modules are expected to enhance its profit margin and valuation center.

Mid-to-Long Term Growth Resilience Superior to Cyclical Concerns
Investors often focus on industry cyclicality, but Goldman Sachs believes that even if AI chip shipment growth slows, the increasing attach ratio can still support optical module shipment growth, forming a more robust "through-cycle" growth logic. Coupled with Innolight (中际旭创) and Eoptolink (新易盛) currently trading at 15x and 12x their 2026 P/E respectively, which are at historical valuation lows, Goldman Sachs believes the market is still underestimating the mid-to-long term growth of optical modules.


Summary: Shares UBS Buy-equivalent thesis on MU: HBM now core profit/valuation driver, supply constraints boosting margins, HBM4 ramp ahead.

Micron: HBM Growth Becomes Core Performance Pillar, Supply Constraints Boost Profitability Stability

UBS (T. Arcuri, 2025/06/26)

UBS believes that HBM has transitioned from a peripheral business to a core driver of Micron's profit and valuation. Current supply constraints in high-value products are prompting the company to reallocate resources, enhancing overall gross margin and sustainability.

Performance Exceeds Market Expectations, HBM Shows Strong Results

Micron's May quarter revenue exceeded both the upper end of its guidance and market expectations. Gross margin stood at 39%, higher than UBS estimates and market consensus, with EPS at $1.91, surpassing expectations by $0.24. HBM revenue grew by nearly 50% year-over-year, estimated at $1.68 billion, accounting for roughly half of the incremental DRAM revenue, highlighting HBM's importance to the company's revenue structure.

HBM Becomes Mainstream DRAM Product, Non-AI Demand Marginalized

HBM accounts for approximately 6-7% of DRAM bits but commands 19-20% of capacity allocation, effectively "squeezing" the traditional DRAM market. Due to tight capacity, the company is prioritizing resources towards high-value-added markets, a trend expected to continue until new capacity comes online around 2026, with expansions remaining restrained.

Yield Improvement and Product Mix Optimization Drive Gross Margin

Gross margin improvement stemmed more from cost reductions than price increases, with both DRAM and NAND costs declining by high single-digit percentages. HBM3E 12-Hi yield exceeded expectations, outperforming last year's 8-Hi performance. While the product mix leaned towards the consumer market in the recent quarter, it is expected to refocus on data centers in FQ4, leading to ASP improvement.

HBM Share Increases Ahead of Schedule, Potentially Shifting to HBM4 in 2026

Micron anticipates reaching its 20% DRAM equivalent share target in the second half of 2024 (originally planned by year-end), suggesting FQ4 HBM revenue could reach $2.3 billion, a sequential increase of approximately 40%. HBM4 samples have begun shipping, with mass production expected to commence in 2026, further solidifying its technological leadership.

Full-Year DRAM and NAND Growth Forecasts Both Upgraded

The company has raised its 2025 DRAM bit growth forecast from mid-to-high single digits to high single digits, reflecting stronger data center demand driven by AI. Full-year NAND growth is still expected to exceed 20%, maintaining a growth trend despite slightly weaker shipments in the second half due to inventory reduction.

Data Center Contribution Continues to Rise, Capital Expenditures Proceeding as Planned

Data center revenue contribution has increased to approximately 55%, with HBM being a key driver. Full-year capital expenditures remain at the $14 billion target, and FQ3 free cash flow reached $1.95 billion. The share repurchase program remains limited by the CHIPS Act, but is expected to gradually resume once restrictions ease in the next 3-5 years.

$MU


Summary: Shares BofA Buy reiteration on Google with $200 PT; bullish on AI monetization, Gemini subscriptions, and Workspace pricing.

industry='Internet Content & Information'

BofA) Google Price Target $200: The Evolution of Google's Monetization in the AI Era - Bullish and Bearish Cases for Google

AI Transforms Google Search Monetization Landscape
AI capabilities are changing search interactions, enhancing utility and functionality. Based on these new capabilities, a multi-tiered product monetization structure, including subscriptions, is evolving. This report examines the following search business drivers: 1) Growth in the revenue pie driven by a step-function increase in search utility, 2) A shift from traditional ad-based search to paid tiers, 3) A decrease in search clicks and a transition from CPC (cost-per-click) to CPA (cost-per-action) transactions, and 4) Increased traffic to OpenAI and competitive catalysts.

Is it a New Era for Metrics to Evaluate Search Monetization?
Increased adoption of Google's AI Overviews and AI modes may lead to fewer clicks, but it will enable Google to better interpret search query intent and deliver more targeted ads. Additionally, Google's updated Smart Bidding framework will further support AI monetization by expanding ad eligibility across a wider range of search query types. As Google's monetization evolves, the importance of traditional search metrics like paid clicks may decrease, and monetization KPIs like ARPU (average revenue per user) may better reflect search performance.

Bullish Case: Favorable Position Through Massive Product Reach
We have noted Google management's increased focus on disclosing product reach (15 products with over 500 million users). Google is favorably positioned with its technical talent, vast data for building AI models, and multi-product deployment capabilities to drive AI usage and monetization. Beyond search, Google will secure growth through Google One subscriptions, Workspace price increases, and system-level integration across Android and Chrome OS. Reiterate Buy. We estimate Gemini-powered subscription revenue could grow to $12 billion by 2027, and Workspace stands to gain over $1 billion annually from price increases this year.

Bearish Case: A New Phase of Internet Distribution
The starting point for accessing information and transactions will shift from browser-based to mobile OS and app-based, with at least five major tech companies (Amazon, Apple, Google, Meta, OpenAI) vying for this opportunity. This shift will erode Google's long-standing competitive moats and decrease user share. In the short term, OpenAI has secured significant funding and is rapidly expanding, with a high likelihood of introducing advertising. Meanwhile, Meta could roll out Agentic AI capabilities to 1 billion assistant users, and Amazon has built agents that can shop across other sites.

$GOOG


The construction of AI Factories has just begun and is expected to continue for several years. Not only CSPs but also sovereign AI initiatives are fully investing in AI Factory CAPEX. Physical AI/Robotics is anticipated to emerge within 3–5 years, driving GPU demand. Surprisingly Strong Demand for GB300

Summary: JPMorgan Computex takeaways: NVDA AI factory cycle multi-year + strong GB300 demand; Vertiv HVDC TAM expansion; ASPEED BMC content headwind; MediaTek ASIC roadmap on track.

250526_Asian Tech: Key Takeaways from 2025 Computex - JPMorgan

(1) Continued Strong AI Demand with Visibility for Growth in Coming Years
 • NVDA: The construction of AI Factories has just begun and is expected to continue for several years.
 • Not only CSPs but also sovereign AI initiatives are fully investing in AI Factory CAPEX.
 • Physical AI/Robotics is anticipated to emerge within 3–5 years, driving GPU demand.

(2) Short-Term Bottlenecks in GB200 Supply; Significant Production Increase Expected from 2H25
 • Multiple server ODM channel checks indicate short-term production bottlenecks in GB200 NVL72 Rack.
 • This is due to 1) low test pass rates and 2) low backplane assembly yields.
 • However, many companies expect rack shipments to increase significantly from 2Q25. The forecast for 25K NVL72 Rack deliveries in 2025 remains unchanged.

(3) Surprisingly Strong Demand for GB300
 • Recent ODM channel checks confirm strong demand for GB300 NVL72.
 • This is because racks with more HBM are suitable for large-scale inference tasks.
 • This trend is more optimistic than the market’s base scenario, as many investors view GB300 as a transitional product between GB200 and Rubin.

(4) GB300 Compute Tray Equipped with One DPU; Increased Adoption of BMC in Non-Compute Areas
 • GB200 Bianca includes two BF3 DPUs, while GB300 Cordelia includes one BF3 DPU.
 • Despite the GB300 GPU board design reverting to Bianca, it still includes one DPU (additional possible in MGX).
 • This is negative for content growth in BMC (Board Management Controller) suppliers like ASPEED.
 • However, as overall rack structures become more complex, BMC adoption is structurally increasing in non-compute areas such as switches, CDUs, and power racks.

(5) Ongoing Competition in Liquid Cooling
 • All value chain players showcased liquid cooling solutions.
 • This technology encompasses multiple layers, including 1) chip, 2) rack/system, and 3) infrastructure levels, with different players and competitive dynamics at each layer.
 • Most CSPs designate suppliers (consign), limiting ODMs’ influence and opportunities to adopt their own components.
 • In chip-level cooling, AVC is positioned as a top-tier cold plate module supplier for GB200/GB300 in 2025 and Rubin in 2H26, expected to maintain solid market share within CSPs.

(6) GB300 Reverts to Bianca Design
 • Several liquid cooling companies exhibited NVQD (NVIDIA Qualified Design) designs based on Cordelia GPU boards but reported reverting to Bianca boards.
 • Such design changes are negative for cooling component suppliers, as Bianca designs reduce TAM compared to NVQD.
 • Although GB300’s TDP is approximately 15% higher than GB200, companies believe existing QD designs can adequately handle the increased heat.

(7) Delay in ODMs’ Adoption of In-House Liquid Cooling Components
 • Several server ODMs showcased their own liquid cooling components, including 1) cold plates, 2) manifolds, and 3) side carts.
 • Some companies also presented next-generation products like two-phase DLC (Direct Liquid Cooling), liquid metal heatsinks, and immersion cooling.
 • By increasing the adoption of in-house components, companies aim to improve margins and shorten product development cycles.
 • However, due to GB300 delays, CSPs prioritize the release schedules of existing GB200 products, leading to a temporary delay in the adoption of in-house components.

(8) Data Center Power: HVDC Emerging as a Next-Generation Game Changer
 • Rubin is expected to consume approximately 200kW, while the NVL576 Kyber structure is anticipated to consume around 600kW.
 • When rack power consumption exceeds 200kW, issues arise, including rack space constraints, copper busbar overload, and inefficient power conversion.
 • To address this, proposals include increasing voltage from the existing 230V to 800V in Rubin Ultra and Kyber servers.
 • Implementing 800V HVDC (High Voltage Direct Current) power racks eliminates AC/DC conversion devices within IT racks and provides space for high-density PSUs.
• The adoption of HVDC is expected to significantly expand the TAM for power-related infrastructure, benefiting companies like Vertiv, Delta, Flextronics, Lite-On Tech, Infineon, and MPS.

(9) Separate Power Rack Structure Integrating BBU and Supercapacitors
 • Rubin is anticipated to initially adopt independent power racks.
 • While NVIDIA recommends centralized power racks supporting multiple computing racks within data centers, CSPs prefer placing individual power racks next to each computing rack to enhance power efficiency.
 • Given the ample space within power racks, the adoption of BBUs (Battery Backup Units) and supercapacitors is likely to increase, potentially doubling or tripling component content compared to existing PSUs.

(10) RTX Pro 6000 Blackwell Server: Targeting Enterprise Market, Potential H20 Replacement?
 • The RTX Pro 6000 Blackwell features up to eight PCIe-based GPUs (each with 600W TDP and 96GB GDDR7 memory), air cooling, CX8 smart NIC, BF-3 DPU, and a 4U height.
 • Using GDDR7 memory reduces the burden of adopting CoWoS-based HBM, which is positive.
 • However, the RTX Pro 6000’s compute performance is over 3–4 times higher than H20 (FP32: 117TFLOPs vs. 44TFLOPs), presenting practical challenges in replacing H20.

(11) NVLink Fusion
 • NVLink, previously a proprietary interconnect between NVIDIA GPUs, is now open to integration with third-party chips (ASICs, Qualcomm/Fujitsu CPUs).
 • NVIDIA aims to establish its technology as the default interconnect in custom ASIC environments.
 • CSPs express concerns about increased dependency on NVIDIA (lock-in). Monitoring actual adoption over the next 2–3 quarters is necessary.
 • Currently, initial interest is observed among some CSPs and second-tier ASIC customers.

(12) CPO: NPO and CPC Preferred for Now
 • The goal is to introduce Co-Packaged Optics (CPO) in Rubin Ultra and NVL576 Kyber platforms between 2026 and 2027.
 • However, thermal domain separation issues affect signal transmission, posing technical barriers.
 • Consequently, the market currently favors Near-Packaged Optics (NPO) and Co-Packaged Copper (CPC) as transitional solutions.

(13) AI PC Adoption Continues, but Innovative AI Applications Still Lacking
 • Several PC brands are attempting to differentiate their AI PC products through proprietary AI solutions.
 • However, there is still a lack of innovative AI applications compelling enough to drive replacement demand, and AI PC penetration remains lower than expected.
 • In the medium to long term, reduced AI inference costs and improved local AI performance are expected to enrich locally executed AI apps, promoting AI PC adoption in both enterprise and consumer markets.

(14) MediaTek’s ASIC and Automotive Roadmap Progressing Smoothly
 • MediaTek has been producing large networking chips measuring 91x91mm for over a year and continues to strengthen its AI ASIC technology roadmap.
 • Developments include A16 compute die, 448 SerDes, 3D packaging, CPO, and custom HBM.
 • Mass production of the first data center ASIC (GOOGL TPU v7e) is expected in 2H26, with potential orders for the 2nm process TPU v8e project in 2027–28.


The adoption of HVDC is expected to significantly expand the TAM for power-related infrastructure, benefiting companies like Vertiv


This is negative for content growth in BMC (Board Management Controller) suppliers like ASPEED

ASPEED = ASPEED Technology, TWSE 6674.TW BMC controller


MediaTek has been producing large networking chips measuring 91x91mm for over a year and continues to strengthen its AI ASIC technology roadmap. Mass production of the first data center ASIC (GOOGL TPU v7e) is expected in 2H26


Summary: Shares/endorses Goldman Sachs Conviction Buy on TSMC with PT raised to NT$1,210 on AI demand recovery, CoWoS expansion, and 28.7%/17.1% revenue growth forecasts for 2025/2026.

Report: Goldman Sachs Raises TSMC Target Price to NT$1,210, Recommends as Conviction Buy

Taiwan Semiconductor Manufacturing Company (TSMC, 2330) has seen its growth momentum further strengthened. According to the latest report from Goldman Sachs, market concerns over AI order cuts have significantly eased. This, coupled with the rapid expansion of CoWoS advanced packaging technology adoption, has driven an upward revision in overall revenue forecasts. Goldman Sachs has raised its target price from NT$1,145 to NT$1,210, maintained its "Buy" rating, and placed it on its Conviction Buy list.

Goldman Sachs has raised its earnings forecasts for TSMC by 2% to 6% for 2025 to 2027, primarily based on two key factors. First, an upward revision of wafer revenue forecasts for the 3nm and 5nm processes, reflecting a significant easing of market concerns about AI order reductions. Second, as more customers adopt CoWoS technology, there's a comprehensive upward revision in demand for advanced packaging. With the gradual alleviation of supply chain bottlenecks, the risk of large-scale AI order cuts in the short term has significantly decreased.

Kelvin Lu, Goldman Sachs' technology industry analyst, commented that TSMC's multiple growth drivers are firing up simultaneously, indicating a continuously optimistic operational outlook. Looking ahead to 2025 and 2026, revenue is expected to increase by 28.7% and 17.1% year-on-year, respectively, higher than the previous estimates of 26.3% and 14.1% (in USD terms).

The primary reasons for this growth come from two major catalysts: First, as process nodes continue to advance, the average selling price (ASP) increases concurrently. AI customers are accelerating their upgrades from N4 to N3, while non-AI customers, such as smartphone and PC manufacturers, will gradually adopt the N2 process. Second, advanced processes and CoWoS packaging are expected to undergo a new round of price adjustments, further boosting overall revenue momentum and helping to offset negative factors such as increased costs from US fab construction and rising energy costs in Taiwan.

Looking ahead, Goldman Sachs reiterates its "Buy" rating on TSMC (including ADRs) and remains optimistic about its long-term growth potential. As structural demand from 5G, AI, High-Performance Computing (HPC), and Electric Vehicles (EV) continues to expand, TSMC, with its technological leadership and excellent execution, demonstrates a strong competitive advantage in advanced process and packaging fields, possessing superior growth momentum compared to peers.

$TSM

---

https://t.co/bNWxEhyjMB


Goldman Sachs has raised its target price from NT$1,145 to NT$1,210, maintained its "Buy" rating, and placed it on its Conviction Buy list


AI demand now accounts for the majority of data center revenue, and continued growth is expected... AI-related revenue expected to further increase going forward... Demand for AI and data centers is expected to persist

Summary: Bullish MRVL: AI majority of data center revenue, XPU mass production underway, new hyperscale customers emerging, optics and enterprise networking recovering.

Marvell FY1Q26 Earnings Release
(Shares down 3% after-hours, concerns about Taiwanese competitors resurfacing)

▶ Key Comments – FY4Q25
• AI demand now accounts for the majority of data center revenue, and continued growth is expected (Data center accounts for 76% of total revenue).
• Ramp-up in mass production of AI silicon programs and strong shipments of electro-optical products for AI and cloud applications.
• AI-related revenue expected to further increase going forward.
• NVLink Fusion partnership is accelerating the development of custom expansion solutions.
• The XPU program for a major U.S. hyperscaler is emerging as a core revenue driver.

⸻

▶ Key Q&A – FY4Q25

Q: Direction of content for the next-gen XPU program and whether Marvell has exclusive rights to 3nm XPU?
A: Information from Asian supply chains is incomplete, and Marvell strictly manages customer confidentiality. We are currently supplying this generation of AI XPUs and have successfully moved from A0 (initial success) to mass production. Follow-up XPU programs are underway. We’ve secured 3nm wafer and advanced packaging capacity, and production is scheduled to begin in 2026.

Q: Can Marvell support a broader customer base beyond the initial 3–4 customers?
A: Marvell has sufficient capabilities to expand its portfolio and customer collaborations in terms of engineering capacity. We’re intensifying R&D investments and reallocating talent to focus on data center and AI opportunities. New hyperscale customers are emerging who can utilize custom technologies.

Q: On the partnership with NVIDIA?
A: There is strong confidence in the partnership with NVIDIA. The NVLink Fusion collaboration demonstrates Marvell’s deep engagement with key ecosystem partners, and it proves that even NVIDIA recognizes the complementary role of custom XPUs.

Q: Data center revenue breakdown (AI share) and full-year AI revenue outlook?
A: As of Q4, AI accounts for more than half of data center revenue, and we are on a path where AI could soon account for more than half of total company revenue. The mix changes quarter to quarter. The custom business inherently carries lower gross margins.

Q: While there is no official guidance for the second half yet, what variables are being considered?
A: We’re closely monitoring macroeconomic volatility. Demand for AI and data centers is expected to persist. Core businesses—especially enterprise networking and telco—are showing a strong recovery and are expected to grow throughout the year.

Q: Status of the optics business and impact of Amazon collaboration beyond custom silicon?
A: The Amazon contract includes a range of opportunities in networking and connectivity, and it’s progressing smoothly. The optics business is performing very well and is expected to grow throughout the year.

Q: Major AI GPU suppliers are preparing to ship next-gen platforms. Is Marvell’s 1.6T solution expected to ramp up strongly starting now?
A: We’ve started shipping our 5nm-based 1.6T products. There is also very strong demand for 3nm products, and development is proceeding successfully.

Q: Marvell previously indicated a target gross margin for ASICs. Is this still valid, and what is the sustainable gross margin for AI ASICs?
A: The overall gross margin for the custom business remains within the previously mentioned range. While larger volumes tend to lower gross margin percentages, operating profit increases significantly due to scale.

$MRVL


Summary: Shares UBS Buy on MU, PT raised to $120; DDR ASP recovery, HBM execution lead, and gross margin expansion to ~40% in FQ4.

Micron: DDR Demand Recovery Drives Earnings; HBM Outlook Revised but Long-Term Growth Intact
UBS (T. Arcuri, June 4, 2025)

UBS believes the DDR demand environment is stabilizing, with potential sequential pricing increases in 2Q and 3Q. While HBM demand forecasts have been revised downward, Micron remains a leader in the high-end segment thanks to strong execution, and its long-term profitability outlook remains positive. UBS raises its price target to $120 and maintains a Buy rating.

• DDR Demand Stabilizing and ASPs Trending Upward

Recent industry checks indicate that inventory build-up from smartphone and PC customers has eased, while cloud service providers have resumed restocking DDR5 for servers, pushing customer inventories lower. UBS raises its 2Q25 DDR contract ASP estimate to +7% QoQ and 3Q25 ASP to +3% QoQ. For NAND, although suppliers continue to maintain tight production discipline, UBS keeps its existing estimates unchanged at +3% QoQ for 2Q25 and -3% QoQ for 3Q25.

• Inventory Replenishment Pace and Tariff Uncertainty

So far, DRAM customer inventory levels have fallen by about three weeks, supporting resilient 2Q25 shipments. UBS expects FQ3:25 (May) revenue/EPS to be $9.25B/$1.78, with DRAM revenue of $7.17B (bit growth +15% QoQ, ASP +2% QoQ) and NAND revenue of $2.04B (bit growth +12% QoQ, ASP -2% QoQ).

Looking ahead to FQ4:25 (August), front-loaded demand due to tariff concerns will begin to fade. UBS forecasts revenue of $10.1B and EPS of $2.09, with DRAM revenue of $8.12B (bit growth +9% QoQ, ASP +4% QoQ) and NAND revenue of $1.91B (bit -5% QoQ, ASP -2% QoQ).

• HBM Demand Revised Down but Execution Advantage Remains

Due to delays in volume production of AI ASICs like Google’s TPU v6e/v7 and AWS’s Trainium 3, UBS revises its 2025 HBM bit demand forecast down from 18.9B GB to 16.3B GB, and 2026 from 29.1B GB to 25.4B GB.

However, with Samsung’s certification of its HBM3E 12-Hi for NVIDIA postponed to 4Q25, UBS believes Micron maintains a clear execution lead in high-end HBM3E and upcoming HBM4 technologies. UBS revises Micron’s HBM shipment forecasts to 75.9 million GB in 2025 and 124.5 million GB in 2026, and believes the pricing premium for HBM4 can offset revenue impacts from lower bit demand.

• FQ3 and FQ4 Profitability Expected to Outperform

Based on the above demand and pricing assumptions, UBS raises its FQ3:25 revenue/non-GAAP EPS forecast to $9.25B/$1.78, a significant upward revision. UBS expects FQ3:25 gross margin to exceed guidance (36.5%) by about 150 basis points.

For FQ4:25, with management indicating that tariff-related uncertainty is easing, UBS expects gross margin to rise another 200bps QoQ to around 40%, far exceeding prior market expectations.

$MU


That's exactly why I want to invest in Korean nuclear-related stocks. If they're not going to accept Chinese reactors, Korea is the only real alternative.

Summary: Long Korean nuclear-related stocks as the only non-Chinese reactor alternative for allies.

Korea nuclear basket: Doosan Enerbility, GS E&C; 017890 mismatch removed

@AngelicaOung That’s exactly why I want to invest in Korean nuclear-related stocks.
If they’re not going to accept Chinese reactors, Korea is the only real alternative.

The problem with Europe (and Taiwan) is they are amongst the American allies who genuinely did very well for themselves thanks to America’s largesse since time out of mind.

They can see with their own eyeballs, of course, America betraying other allies on the mildest


Summary: Long Samsung and SK Hynix on broad memory value chain exposure; avoids SSD-pure-plays Kioxia and Western Digital and HDD-only companies.

Personally, I don’t invest in companies that only make SSDs—such as Kioxia or Western Digital.
The same goes for companies that focus only on HDDs.
However, I remain positive on companies like Samsung Electronics and SK Hynix, which are broadly involved across the memory value chain.
As of now, SSDs are still more expensive than HDDs. In fact, over 90% of storage infrastructure in data centers is still based on HDDs.
SSDs are used in specific workloads that require high throughput, but HDDs remain dominant due to their cost advantage.
Some market research firms forecast that SSDs will become cheaper than HDDs by around 2029.
I also believe that only around then will SSD-focused companies begin to generate meaningful profits that satisfy investors.

Still, despite this outlook, I don’t take long positions on SSDs, nor do I go short on HDDs just based on that expectation.
On the surface, SSDs appear to have the long-term edge, and HDDs may look like a declining asset. But I have my reasons for staying cautious.

Here's why:

1. “SSDs will be cheaper by 2029” is just a forecast, not a fact.

Back in 2014–2015, major players like Samsung and SK Hynix boldly claimed SSDs would surpass HDDs in price competitiveness within a few years.
But what happened?
 SSD prices dropped—but so did HDD prices.
Even now, in 2025, the price gap remains substantial.
This is exactly why I can’t fully trust optimistic projections about SSDs.

2. Will the AI datacenter boom still be alive in 2029?

Today, HDDs, HBM, and GPUs are flying off the shelves. But that’s not because of intrinsic demand—it’s because hyperscalers are throwing massive CAPEX into infrastructure.
Will CSPs still be investing at that same pace in 2029?
According to my estimates, about 60–70% of HDD companies' profits currently come from AI-related demand.
Now suppose SSDs truly replace HDDs by 2029.
 Can SSD makers really expect 60–70% of their earnings to come from AI infrastructure as well?

I seriously doubt it.

Conclusion
I don’t have a crystal ball, but I do know how to invest in what I can reasonably predict over the next 1–2 years.
For me, betting on outcomes 4–5 years into the future is simply too risky.
Sure, some people might make great returns by betting on SSDs.
But I believe there are plenty of other companies in the market that offer much higher conviction with far less uncertainty.


I don't invest in companies that only make SSDs—such as Kioxia or Western Digital


Goldman Sachs added TSMC to its APAC Conviction List... we view the current valuation as a compelling buying opportunity... TSMC's stock is likely to continue outperforming

Summary: Shares Goldman's Conviction Buy on TSMC: 26%/14% revenue growth FY25/26, trades below 5-yr avg P/E at 16.9x, compelling buying opportunity on AI/HPC demand + ASP expansion.

Goldman Sachs added TSMC to its APAC Conviction List with the following commentary:

TSMC- We project TSMC’s revenue to grow by 26% and 14% in FY2025 and FY2026, respectively, driven by accelerating demand for AI and high-performance computing (HPC), as well as rising ASP (average selling prices) in advanced nodes. TSMC is currently trading at 16.9x FY2026 P/E, which is below its 5-year historical average of 18.8x. Given TSMC’s year-to-date share price decline of 10%, in contrast to the 8% gain in the MXAP (Asia Pacific Index), we view the current valuation as a compelling buying opportunity. Bruce (analyst) believes that if the market gains greater confidence in the outlook for AI demand in H2 2025 and 2026, as well as ASP expansion from AI clients migrating to advanced nodes, TSMC’s stock is likely to continue outperforming.


Summary: Bearish BYD: heavy discounting to clear inventory and rising protectionism risks will weigh on the stock even without bankruptcy risk.

BYD Chinese EV context; HK listing 1211.HK

@JayGatsby0 Of course, I don’t think they’ll go bankrupt either.
But the stock price could still underperform, right?
Especially if they keep clearing out inventory through heavy discounts like this.

---

@JayGatsby0 There’s a growing discussion in Korea as well about whether BYD vehicles should be excluded from receiving subsidies.
Countries are already starting to lean toward protectionism — especially those with their own domestic automakers.


Summary: Author endorses TD Cowen's bullish turn on data centers, citing OpenAI/Stargate activity and MSFT expected to resume leasing in Q4 2025.

US data center sector proxied by DTCR ETF

TD Cowen has turned bullish on the data center sector, citing the following reasons:

1. OpenAI remains highly active, primarily due to the Stargate projects, and has recently started leasing data center space in colocation (colo) facilities.

2. Amazon has been consistently building its own data centers, and colo contracts have slowed down mainly because of their higher operating costs.

3. Microsoft (MSFT) is expected to resume data center leasing in Q4 2025.

TD Cowen翻多Data center，1） Open AI持續活躍，主要因爲stargate projects，同時近期有向託管(colo)租賃數據中心；2）amazon最近持續自行建置數據中心，colo合約放緩主要因爲其較高的運營費用；3）MSFT預計4Q25會重新開始租賃數據中心

 #零級分


Summary: Shares Nomura's bullish Foxconn note: AI server rev to double YoY, GB200 ramp resolving, improved 2H25 visibility; positive read-through for semiconductor upcycle.

Hon Hai Precision (Foxconn) 2317.TW Taiwan

250515_Foxconn: Improved Visibility on AI Servers in 2025 – Nomura

(1) 1Q25 Operating Profit was in line with market consensus, partially driven by Sharp’s contribution.

(2) 2Q25(F) Guidance

Revenue expected to grow YoY by +5~15%
Consumer: Slight QoQ decline anticipated due to base effect and temporary gaps from new product launches
Cloud: Strong YoY and QoQ growth expected, driven by stabilized AI server production (estimated by Nomura to be GB200) and solid demand for general-purpose servers
Computing: Expected to remain flat

(3) AI server revenue is expected to more than double YoY, and in 2Q25(F), it is projected to make up about 50% of total server revenue mix

(4) This growth became possible as mass shipments of GB200 racks ramped up in April, following small-scale shipments that began in March

(5) Management mentioned that visibility for AI server orders in 2H25 has significantly improved, in line with recent comments from Quanta Computer executives

(6) However, for the consumer and computing segments, the company maintains a conservative outlook due to ongoing macroeconomic uncertainties

(7) Due to the strong TWD, full-year 2025 revenue growth guidance was widened to +5~15% from +15% previously (= downward revision)
* According to Nomura estimates, a +1% TWD appreciation has an estimated -3% impact on revenue and -10bps on gross margin
(8) FY25(F) CAPEX guidance remains at +20% YoY, with 60~70% allocated for capacity expansion in the U.S., India, Vietnam, and Mexico

(9) In our view, as in April, GB200 rack bottlenecks have largely been resolved, and shipments between March and May are expected to increase by 3~4x

(10) Thanks to improved GB200 productivity and computing tray redesigns for GB300, major CSPs are expected to resume large-scale orders

(11) This trend aligns with continued aggressive annual CAPEX by global Big Tech firms and could signal a positive semiconductor upcycle.


could signal a positive semiconductor upcycle

Global semiconductor sector proxied by SMH ETF


Micron is known as a main supplier of low-power DRAM not only to Samsung Electronics but also to Apple's iPhones... Samsung Electronics' MX Business Division has been confirmed to be testing Micron's LPDDR5X samples in anticipation of the Galaxy S26 series launch

Summary: Shares report that Micron wins 60% LPDDR5X share in Galaxy S25 and is already being tested for S26, implying continued supply gains over Samsung DS.

Report: Samsung MX Business Division to Equip S25 with 60% Micron DRAM, 40% In-house Memory

It is predicted that Samsung Electronics' Mobile eXperience (MX) Business Division will equip the Galaxy S25 series with more of Micron's LPDDR5X than products from Samsung Electronics' Device Solutions (DS) Business Division. Previously, after Micron was selected as the primary supplier for LPDDR5X, industry insiders had expected that the DS Business Division would secure a significant portion of the total volume. However, the current situation suggests a movement in the opposite direction.

Of course, the Galaxy S25 series is still only in its 27th week before launch, and considering that a new product's active sales cycle typically lasts about two years, there is still variability. This is because Samsung Electronics often determines order volumes through weekly discussions with suppliers. Nevertheless, this assessment is based on the forecast (estimated order volume) derived by the MX Business Division after comparing the yield and performance between Micron and the DS Business Division.

A source familiar with the matter stated, "Samsung Electronics' MX Business Division will ultimately conclude with Micron's LPDDR5X being installed in the Galaxy S25 series at a 60% ratio. Samsung Electronics' DS Business Division is expected to supply only 40%. The supply ratio from initial volumes to date is also 6 to 4."

Analysis based on Samsung Electronics' MX Business Division's forecast (estimated order volume) suggests this development. Typically, for a company to secure the necessary volume from suppliers at the desired time, a forecast must be prepared. This pre-discussion is even more crucial for Micron, which currently has limited DRAM capacity.

There is also analysis that Samsung's DS Business Division partially agreed to the 40% supply ratio, considering production efficiency. The Galaxy S25 series requires numerous testing processes for selecting good products. The LPDDR5X from the DS Business Division is reportedly still facing cost burdens due to lower yields. Typically, low-power DRAM needs to secure a yield of 80% or more for mass production, but the DS Business Division's products are reportedly falling short of this standard.

Another industry insider said, "The Galaxy S25 series needs to achieve a data processing speed of at least 9.6 Gbps. Therefore, the DRAM installed in it must meet this specification. However, in the case of Samsung Electronics' DS Business Division's LPDDR5X, the yield is low, creating a cost burden as more are produced."

They added, "From the MX Business Division's perspective, Samsung Electronics' DS Business Division's LPDDR5X is inferior to Micron's product in terms of heat generation and power efficiency, making it difficult to adopt a significant portion. The DS Business Division also likely decided that supplying only 40% would be better, considering yield and cost burdens."

Micron is known as a main supplier of low-power DRAM not only to Samsung Electronics but also to Apple's iPhones. According to industry sources, Micron has stably performed wafer masking processes using DUV equipment up to 1-beta (β). The LPDDR5X used in the Galaxy S25 also applies the 1β process.

Earlier this year, when Micron was selected as the primary supplier of LPDDR5X for the Galaxy S25 series, industry insiders had expected the DS Business Division to supply more than half of the total volume. It was explained that there would have been internal pressure, as this was the first time in 10 years that the primary supplier position shifted from the DS Business Division to Micron.

Consequently, there was speculation that high-end products and initial volumes would be primarily from Micron, while the DS Business Division would account for a higher proportion of the overall volume. As a result, predictions were made that the installation ratio between the DS Business Division and Micron would adjust from 7:3 to at most 6:4. However, with DS products falling behind in terms of performance and yield, the current situation is reportedly moving in an unexpected direction.

Regarding this, a Samsung Electronics DS Business Division official stated, "We cannot confirm information related to our partners."

Meanwhile, Samsung Electronics' MX Business Division has been confirmed to be testing Micron's LPDDR5X samples in anticipation of the Galaxy S26 series launch in February next year. This is the same product as the LPDDR5X supplied to the Galaxy S25, with samples submitted after slightly improving the circuit linewidth. Another industry official explained, "The sample Micron submitted this time is a version of the LPDDR5X product previously supplied to the S25, with a slightly reduced circuit linewidth. The number of dies that can be produced per wafer will increase by about 15%."

$MU

---

https://t.co/t0CYHrehRs


Summary: U.S. bank reiterates positive stance on TSMC, MediaTek, and raises targets on Auras (3017) on improved AI supply chain yields; CoWoS capacity/shipment forecasts raised.

- U.S. Investment Bank’s Outlook on Tech Stocks:

Last week, a U.S.-based securities firm held a roadshow with over 80 foreign institutional investors and concluded that sentiment toward AI has become more optimistic compared to March.
While concerns in March centered around potential demand cuts and order cancellations, the current outlook reflects improved yields across the supply chain, which are now seen as sufficient to meet AI-related demand.

(The firm reaffirmed its forecast of a 58% increase in CoWoS production capacity and a 52% increase in shipments in 2025.)

As a result, the firm maintains a positive stance on its covered companies, including TSMC, MediaTek, Winstek, and MPI (Chunghwa Precision Test).

早安！6/4 外電綜合整理

- 3017奇鋐: 美系升目標
美系券商調升25-26年EPS至$37.4/$41，給予明年20xPE評價，同步升目標。

券商觀察隨著水冷散熱在GB系列良率提升，再加上ASIC server 正向需求不變，券商同時認為匯率影響可控，所以在財務模型調高毛利率及OPM預估。重申正向評等不變。

- 3665貿聯:


the firm maintains a positive stance on its covered companies, including TSMC, MediaTek


美系券商調升25-26年EPS至$37.4/$41，給予明年20xPE評價，同步升目標。重申正向評等不變


the firm reaffirmed its forecast of a 58% increase in CoWoS production capacity and a 52% increase in shipments in 2025

CoWoS advanced packaging basket: TSMC, ASE, Unimicron


Summary: Shares Morgan Stanley bullish view on Dell: AI server revenue approaching $20B with significant 2H acceleration on GB200 rack ramp.

Dell: AI Server Growth to Accelerate in 2H
Morgan Stanley (E. Woodring, 2025/05/20)

Dell is expected to slightly beat expectations for fiscal 1Q25 results, while maintaining its full-year revenue guidance of $102 billion and EPS of $9.30. Driven by strong AI infrastructure demand and steady performance in traditional hardware markets, AI server revenue for the year is expected to approach $20 billion, though growth will be mainly concentrated in the second half following GB200 rack capacity ramp-up.

• 1Q Slightly Beats Expectations, 2Q EPS Guidance
AI servers contributed approximately $2.3 billion in revenue during the first quarter, with overall results slightly exceeding expectations. The company issued a conservative 2Q EPS guidance of approximately $2.00 (vs. Morgan Stanley’s estimate of $2.10), implying revenue will remain flat or grow slightly quarter-over-quarter.

• Full-Year Guidance Maintained
Management reaffirmed full-year revenue guidance at $102 billion and EPS at $9.30, and did not raise its outlook for fiscal 2026 during this earnings release.

• AI Server Revenue to Surge in 2H
AI server revenue is expected to reach nearly $20 billion this year, but growth is largely back-loaded, with significant acceleration expected in the second half following large-scale shipments of GB200 racks beginning in late Q3.

• Steady Progress in Traditional Hardware
Demand for storage and general-purpose servers remains stable. Dell continues to gain share in the enterprise storage and server markets, maintaining margin levels through cost optimization.

• Risks and Opportunities Coexist
Uncertainties in the global tariff environment and component supply chain pace may still impact second-half performance. However, partnerships with sovereign projects like Abu Dhabi’s G42 and Dell’s leading position in the AI infrastructure market provide ongoing growth momentum.


Focus on Traditional Products and Organizational Strategy Optimization… Intel still has the potential to expand market share and increase pricing power… achieving CPU product leadership is key to valuation recovery

Summary: Shares Morgan Stanley note: INTC foundry delay to 14A is manageable; CPU product recovery is the core path to valuation re-rating.

Intel: Foundry Delay to 14A May Be Rational Adjustment, Focus on CPU Products Benefits Recovery

Morgan Stanley (J. Moore, 25/07/03)

Morgan Stanley points out that if Intel shifts its Foundry focus from 18A to the 14A node in 2027, while not officially confirmed, the short-term financial impact would be controllable due to already limited customer expectations for 18A. Instead, this move could help the company focus on its core business and rebuild the competitiveness of its traditional CPU products.

Foundry Focus Delayed to 14A, Short-Term Economic Impact Controllable

The 18A node was already cooling down, and even if Foundry-related projects are delayed to 14A, customer contributions for 2025-2026 would be marginal. Significant asset impairment or profit impact is not expected. Morgan Stanley believes that most 18A node Foundry customers were primarily engaged in small, exploratory projects with limited capital expenditure involved.

Past Foundry Attempts Lacked Sustainability, Organizational Mechanism Still Immature

Intel's previous Foundry model failed to effectively serve diverse customers because its processes were optimized for its own high-performance CPUs, leading to high costs and narrow process applicability. Although the current Foundry spin-off into an independent business unit helps enhance market orientation, it remains questionable whether this will improve the overall existing product lines.

18A Wafer Manufacturing Costs May Inhibit Capacity Utilization Due to Internal Pricing Adjustments

Intel recently disclosed that some Intel 7 products will face long-term shortages. One reason might be the excessively high costs of the Intel 3/4 nodes, limiting Intel's own transition. Morgan Stanley speculates that the company might be raising the internal pricing for its own wafers to pursue Foundry cost competitiveness, which could in turn lead to an imbalance in Fab resource allocation.

Focus on Traditional Products and Organizational Strategy Optimization, Weakening AI and Foundry Interference

Canceling edge AI projects like Falcon Shores and delaying Foundry progress can help management refocus on the quantifiable, high-market-share client and server CPU core businesses. Driven by product refresh cycles, Intel still has the potential to expand market share and increase pricing power.

Short-Term Market Sentiment Favors Foundry, But Product Recovery is the Core Path

The market still hopes for a breakthrough from Intel Foundry, but Morgan Stanley emphasizes that achieving CPU product leadership is key to valuation recovery. Although recent rumors of business spin-offs or joint ventures have sparked speculation, if the traditional CPU product line lacks a clear roadmap, financial performance will continue to be under pressure.

$INTC


Summary: US export restrictions will benefit Chinese domestic equipment makers; TSMC/Samsung/SK Hynix China fabs will transition to Chinese equipment.

China semi equip basket: AMEC, Naura, Advanced Micro

An industry source cited by Reuters pointed out that if it becomes more difficult to export U.S. equipment to foreign companies operating in China, it would essentially be a huge gift to Chinese domestic equipment suppliers.

And that’s completely expected. At the end of the day, every company is driven by profit. You can’t just lift an entire fab like Aladdin’s lamp and move it to another country. So as long as these fabs were built in China, they’ll inevitably have to find ways to keep them running, regardless of U.S. sanctions.

I believe that, in the end, the fabs operated by TSMC, Samsung, and SK Hynix in China will end up using Chinese-made semiconductor equipment.

---

https://t.co/tBW57ynWJH


the fabs operated by TSMC, Samsung, and SK Hynix in China will end up using Chinese-made semiconductor equipment

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


Samsung in semiconductor context = Samsung Electronics, 005930.KS


Summary: CXMT's 2025 DRAM output revised down to ~240Gb from 300-310Gb on process delays; viewed as positive for near-term DRAM supply-demand.

Global DRAM basket: Micron, Samsung, SK Hynix

Daishin Securities (Korea): CXMT’s 2025 Production Target Revised Downward, 15nm Process Delayed

Compared to the beginning of the year, CXMT's production target is expected to be revised downward. While it was initially expected that CXMT's 2025 production would double year-on-year to reach around 300–310 billion Gb, recent expectations suggest a more modest growth of approximately 60% year-on-year, down to 240 billion Gb.

- The demand landscape is shifting due to AI. The intrinsic technological characteristics of DRAM—low power consumption and high speed—are being further emphasized by AI, accelerating demand migration toward high-value products such as DDR5 and LPDDR5/5x. We believe demand from Chinese customers will not deviate from this trend.

- In order to respond more swiftly to customer demand, CXMT likely needed to strengthen its capabilities in high-value product segments. During the process of shifting its production mix toward more advanced, higher-margin products—which are more difficult to mass-produce—the overall production target may have been reduced as a first consequence.

- An additional constraint on production could be the delay in the development of the Gen 4b process. Gen 4b applies High-K Metal Gate (HKMG) technology to further improve speed over the existing Gen 4 process, and is essential for meeting high-end demand. While CXMT initially aimed to complete process development by the end of March 2025, this timeline has reportedly been pushed back to the end of September. Although there are attempts underway to pull the schedule forward again, given the difficulty in procuring equipment due to U.S. sanctions and the time required to optimize the technology, it is more reasonable to assume that Gen 4b’s contribution to mass production will be delayed compared to earlier expectations. If development is not completed by July or August, considering wafer lead times, volume production within the year will likely be limited.

As China continues to aggressively pursue semiconductor self-sufficiency, CXMT’s rise undeniably poses a strong threat to the DRAM industry. Given the Chinese government’s forceful push for higher self-sufficiency rates, there is also a clear tendency among Chinese customers to increase adoption of CXMT products. However, the product quality has not yet reached a mature level, and there are still real-world challenges to achieving stable mass production of high-value products. Taking this into account, it seems unlikely that short-term production will reach the earlier target of 300–310 billion Gb.

Considering various real-world constraints, CXMT’s 2025 production target is expected to be around 240 billion Gb. This downward revision of 60–70 billion Gb, compared to the original plan, is viewed as a positive development in terms of short-term supply-demand dynamics.


Summary: Short Hynix from Aug on Samsung HBM4 sample threat; short Hanmi on lost Micron/Hynix sockets; long BESI on expanding customer references.

2025 H2 Memory Note

Taker Jukan C

Samsung reportedly changed its plan for Phase 4 (Ph4) of Pyeongtaek Campus Plant 4 (P4) from a foundry production line to a DRAM production line.

This seems consistent with Samsung's recent trend of reducing/delaying foundry investments. Recently, Korean media reported that Samsung decided to delay 1.4nm and focus intensively on 2nm investment and yield improvement.

Samsung Electronics plans to install a 10nm-class 6th-generation (1c) DRAM production line in Ph4. The scale will be 80,000 wafers per month, which is 40% of P4's production capacity (200,000 12-inch wafers per month).

Samsung was originally expected to apply HCB starting from HBM4, but it is now presumed that HCB application has been delayed to HBM4E.

Instead, there's a possibility that Samsung might use Fluxless for HBM4. However, it seems unlikely that external companies like Hanmi or Hanwha Semitec, as expected by the market, will supply equipment to Samsung. Samsung is likely to procure most of the bonding equipment for HBM4 and HBM4E from its semiconductor equipment subsidiary, SEMES. BESI might supply some to Samsung, but BESI's goal seems to be to build references through collaboration with Samsung and then supply to SK Hynix and Micron.

I don't think the market is seriously considering Samsung's HBM4 risk yet.

Samsung has recently significantly improved the yield of its 1c DRAM itself, and the yield of 1c DRAM for HBM4 12-stack has also significantly increased compared to early this year.

In particular, according to supply chain sources, Samsung's 1c DRAM performance is definitely better than SK Hynix's 1b DRAM.

The reason NVIDIA has not yet finalized its HBM4 contract with SK Hynix is also understood to be due to Samsung's strides in HBM4.

I project that SK Hynix will maintain its strength for the next month, but SK Hynix could weaken starting from August, when Samsung is expected to provide HBM4 samples.

Regarding Hanmi Semiconductor:

It's almost certain that Micron will order Fluxless bonding equipment from BESI.
This is likely to be a considerable blow to Hanmi Semiconductor, which previously exclusively supplied HBM3E equipment to Micron.

Furthermore, it's understood that even SK Hynix will increase the proportion of ASMPT and Hanwha Semitec in HBM4.

Therefore, Hanmi Semiconductor is practically expected to have no other source of future revenue except for China-bound sales. Especially considering that its technology in hybrid bonding significantly lags behind competitors, placing expectations on Hanmi Semiconductor can be described as 'foolish'.

This note is not a buy/sell recommendation.


SK Hynix could weaken starting from August, when Samsung is expected to provide HBM4 samples


BESI's goal seems to be to build references through collaboration with Samsung and then supply to SK Hynix and Micron

BE Semiconductor Industries Amsterdam BESI.AS


Summary: Relays KB Securities call: HBM4 price premium ~30% over HBM3E positive for both Samsung and SK Hynix into 2H 2026 mainstream ramp.

Analysis: South Korea KB Securities: “HBM4 Price Premium Expected to Reach 30%, Positive for Samsung Electronics and SK Hynix”

The price of sixth-generation High Bandwidth Memory (HBM4) is expected to increase by around 30% compared to the previous generation.

Dongwon Kim, an analyst at KB Securities, stated on the 19th, “HBM4 is expected to see a 30% price increase compared to its predecessor, HBM3E,” adding, “The price hike is due to increased manufacturing costs. While the wafer cost for existing 1b DRAM memory is about $2,000 to $2,500, the logic wafer for HBM4 produced at TSMC is estimated at $7,000 to $8,000—three to four times higher.”

Furthermore, the increase in I/O channels (from 1,024 to 2,048) is expected to raise the complexity of bump and stacking processes, and the HBM4 die size is projected to be 15–20% larger than that of HBM3E.

Accordingly, while the average selling price (ASP) rose by 20% at the time of HBM3E’s launch, HBM4 is expected to see a price increase of more than 30%.

Total annual HBM shipments are expected to exceed 3,000 billion gigabytes (Gb) in 2026, with HBM4 anticipated to replace HBM3E and become the mainstream product in the second half of 2026.

https://t.co/2iZfiAPTit


Summary: NVIDIA China RTX PRO 6000 to use GDDR7, boosting future demand; Samsung projected to capture 70% of GDDR7 supply, prices stable-to-rising.

▶ NVIDIA Expected to Launch RTX PRO 6000 Special Edition for China’s AI Market, Potentially Boosting Future GDDR7 Demand, Says TrendForce

• According to TrendForce, in response to the new U.S. export restrictions announced in April, NVIDIA is expected to release a low-power, downscaled version of the RTX PRO 6000 (previously known as B40) targeting the Chinese market.

• This model will reportedly switch from the originally planned HBM memory to GDDR7 and is expected to launch as early as the second half of 2025.

• Based on recent interviews with Chinese industry insiders, TrendForce reports that following the implementation of the new export rules, Chinese CSP customers have not been able to obtain the H20, and the B30 model—initially planned for release in the second half of this year—is now likely to be delayed or altered.

• TrendForce predicts that the performance of the China-specific RTX PRO 6000 will fall between that of the previous-generation L40S and the L20 China Edition.

• Demand for the L20 has remained steady among local CSPs, especially for applications such as small-scale model training and AI inference, which suggests that the RTX PRO 6000 China Edition is also expected to achieve similar sales levels upon release.

• However, with high-end models such as the H20 and B30—equipped with HBM—blocked from the Chinese market, NVIDIA now faces intense competition from domestic players like Huawei and Cambricon, who are developing their own AI solutions.

• To comply with U.S. export controls, the RTX PRO 6000 for the Chinese market will be downgraded from HBM3e to GDDR7 memory.

• Major memory suppliers have begun expanding GDDR7 production following the recent launch of NVIDIA’s RTX 50 series consumer GPUs.

• However, since gaming consoles and other consumer applications have yet to adopt GDDR7, the primary demand through the first half of 2026 is expected to come from NVIDIA-driven PC, workstation GPU, and AI server applications.

• Samsung is projected to lead GDDR7 production throughout 2025 and could capture up to 70% of the market share.

• NVIDIA remains heavily reliant on GDDR7 produced by Samsung. TrendForce expects GDDR7 pricing to remain relatively stable going forward, with prices holding steady or increasing slightly.

---

https://t.co/746a6ns215


Samsung is projected to lead GDDR7 production throughout 2025 and could capture up to 70% of the market share


Summary: Long ASML on sustained EUV Capex growth and High-NA ramp; long ASMI as the structural ALD leader with unique vertical integration into precursor supply.

Additional Reading for Context (by the Jukanlosreve)

1. EUV Source Power and Increasing Lithographic Intensity Expected to Continue

Shuegraf acknowledged that the transition from N3 to N2 nodes does not significantly shrink feature sizes due to the Gate-All-Around (GAA) structure. However, he projected that lithographic intensity will continue to increase for nodes beyond that. He expressed confidence in ASML achieving 1000W source power from the current 600W, but noted that reaching 1500W would approach technical limitations.

Commentary: This highlights that the end of Moore's Law scaling does not mean the end of lithographic demand. Even as geometric scaling slows, lithographic complexity—especially in terms of multi-patterning and total mask layers—is expected to intensify. If ASML succeeds in scaling source power to 1000W, it would substantially improve EUV throughput. However, 1500W may be near the physical and thermal limits of current source technology. This implies continued equipment Capex growth, especially for EUV infrastructure.

2. 18A Node Outlook and High-NA Adoption Timing

In line with industry trends, Shuegraf stated that Intel must first prove the viability of its 18A node through its own products before attracting potential customers such as AVGO (Broadcom), NVDA (Nvidia), and AAPL (Apple M-series). He predicted that 2026 would be the mainstream ramp-up period for 18A, which would be about one year behind TSMC’s 2nm node production schedule. Regarding High-NA EUV, he noted that TSMC’s full adoption would likely be in the late 2020s, as it will take time for ASML to scale up production capacity.

Commentary: Intel’s IFS strategy hinges on internal product validation of 18A before winning over external foundry customers. A 2026 ramp suggests Intel remains about a year behind TSMC’s roadmap, maintaining TSMC's lead for bleeding-edge nodes. As for High-NA EUV, its high cost, uncertain productivity, and ecosystem immaturity imply that industry-wide adoption may not occur until 2027–2029. ASML’s production capacity for High-NA tools will be a key bottleneck.

3. Potential Expansion of EUV Adoption in DRAM

Shuegraf suggested that if leading HBM suppliers adopt EUV, it could drive broader EUV adoption across the DRAM industry. This is due to trends such as AI PCs and advanced packaging making DRAM a more specialized, rather than purely commoditized, product segment. While some customers may be able to maintain current lithographic intensity levels through 4F2 architecture, others are expected to adopt additional litho layers alongside 4F2.

Commentary: DRAM, especially high-value products like HBM, is evolving from a cost-optimized commodity into a customized, performance-sensitive component. If HBM leaders (e.g., SK Hynix, Micron, Samsung) move forward with EUV, others may follow to stay competitive. 4F2 cell scaling may soon hit practical limits, and EUV patterning—especially for logic-like peripheral circuitry—could become standard. Expect increased DRAM Capex and technology bifurcation between leading-edge and trailing-edge suppliers.

4. Additional Notes on China and ALD

(A) Regarding China’s development of EUV using DPP (Discharge Produced Plasma)
Shuegraf acknowledged that for AI use cases, high wafer throughput is not always essential. However, he commented that DPP is economically inefficient and presents challenges in supply availability.

Commentary: China’s DPP-based EUV efforts signal a desire to reduce reliance on ASML, but the technology is limited by low throughput, unstable plasma generation, and poor ecosystem maturity. Even if usable in narrow-edge AI inference, DPP remains economically unviable for volume manufacturing. The barriers to achieving ASML-equivalent tool maturity remain steep, reinforcing the durability of Western EUV hegemony for the foreseeable future.

(B) On the topic of ALD (Atomic Layer Deposition)
He emphasized that ASMI remains the leading player due to its position as the only vertically integrated vendor with an in-house chemical supply chain.

Commentary: As device architectures transition to GAA transistors and higher-layer 3D NAND, the precision required in deposition rises significantly. ASMI’s leadership in ALD is strengthened by its integrated control over precursor supply chains. This vertical integration is increasingly critical in securing performance, purity, and delivery lead times—making ALD a structural growth area, not just in logic, but also in memory and advanced packaging nodes.

BofA) Expert Call with Former Intel Lithography and Foundry Executive

Yesterday, we hosted an expert call with Klaus Shuegraf, currently VP at Photonic and formerly Director of Lithography Sourcing and VP of Foundry Strategy & Planning at Intel.

1. EUV Source Power and https://t.co/DWm9As6BBs


ASMI's leadership in ALD is strengthened by its integrated control over precursor supply chains. This vertical integration is increasingly critical in securing performance, purity, and delivery lead times—making ALD a structural growth area

ASM International Amsterdam; US OTC ADR ASMIY


Summary: Shares/endorses Citi Buy on NVDA with PT raised to $190 on sovereign AI demand, networking TAM expansion, Blackwell ramp, and raised FY27/FY28 estimates.

NVIDIA: Target Price Raised to $190 on Strong Sovereign AI Demand and Significant Network TAM Increase
Citi (A. Malik, 25/07/07)

Citi has raised NVIDIA's target price from $180 to $190, based on a significant upward revision of the AI accelerator and networking Total Addressable Market (TAM). This revision is driven by strengthening sovereign AI demand, the scaling up of AI training clusters, and the expansion of network connectivity. Concurrently, the Blackwell product line is progressing smoothly, and the trend of improving gross margins continues.

Data Center Semiconductor TAM Raised to $563 Billion, Network Contribution Growing Most Significantly
Citi projects the AI TAM for data center semiconductors to reach $563 billion by 2028, a 13% increase from previous forecasts. Within this, the GPU and custom ASIC market is expected to grow by 4%, primarily driven by better-than-expected sovereign AI projects. The networking TAM has been significantly revised upwards from $90 billion to $119 billion, a 32% increase, propelled by larger-scale AI clusters and amplified enterprise internal network demand. Networking's share of the overall TAM is projected to increase to 21%.

FY27/FY28 Sales and Earnings Forecasts Upwardly Revised, Networking Growth Particularly Prominent
Citi has raised NVIDIA's FY27/FY28 data center revenue forecasts by +5% and +11% respectively. Networking sales forecasts have been raised by +12% and +27%, and are expected to account for approximately 20% of total data center revenue. Earnings per share (EPS) forecasts have increased by 6% and 21% for FY27 and FY28, respectively. The networking business is projected to grow by 112% in FY27, becoming the second growth engine driven by the opening of the NVLink platform and the expansion of AI switches.

Blackwell Shipments Exceed Expectations, GB300 Expected to Maintain Smooth Delivery Pace
GB200 shipments are accelerating, and Citi believes that previous concerns about supply chain bottlenecks have largely been resolved. The company is well-positioned to smoothly transition to the GB300 product leveraging its experience from the Hopper to B200 transition. NVIDIA plays a core role in multiple sovereign AI projects, and sovereign AI deployments are expected to reach tens of GW scale in the coming years, further enhancing long-term revenue certainty.

Gross Margin Rebounds to Mid-to-High Levels, Export Restriction Risks Limited
The gross margin is expected to rebound to over 70% in FY25, primarily benefiting from the mass production progress of Blackwell GB200. Although some countries (e.g., Malaysia, Thailand) may face future export regulations, Citi believes NVIDIA possesses tracking mechanisms to control risk and considers the impact of China export bans to be largely reflected in current expectations.

AI Accelerators to Grow at 22% CAGR, GPUs Still Dominate the Market
Between 2025 and 2028, the overall AI accelerator Compound Annual Growth Rate (CAGR) is projected to be 22%. GPUs are expected to grow at 16% annually, while ASICs are projected to grow at 32%. However, GPU prices are significantly higher than ASICs (3 to 8 times higher). By 2028, GPU and ASIC sales are expected to reach $338 billion and $59 billion, respectively, totaling $396 billion, accounting for over 85% of the accelerator TAM. NVIDIA's technological leadership and strong user base advantages remain central to its market share.
$NVDA


Summary: BofA reiterates Buy on CDNS and SNPS post China export restriction selloff; downside seen largely priced in, valuations within historical ranges.

BofA) EDA Update: Assessing Impact of China Export Restrictions – Maintain ‘Buy’ Ratings on CDNS and SNPS

Base/Downside Scenarios Suggest ~2%/10% Revenue, ~5%/20% EPS Impact
We recently held brief discussions with Cadence Design Systems (CDNS) and Synopsys (SNPS) to assess the potential impact of the China export restrictions outlined in a recent letter from the U.S. Bureau of Industry and Security (BIS). Both companies are still evaluating the full implications and working with BIS for regulatory clarity. For now, we present three potential scenarios:
1. Base Case: No impact
2. Moderate Case: 25% reduction in China revenue, similar to patterns observed in semiconductor equipment firms
3. Worst Case: 100% loss of China revenue

Given that China accounted for ~12% of CDNS and ~14% of SNPS revenue over the past four quarters, we estimate that the moderate/worst-case scenarios could translate to a ~2%/~10% revenue and ~5%/~20% pro forma EPS impact on an annualized basis. Valuation multiples remain within historical trading ranges. We maintain Buy ratings on CDNS and SNPS, based on their unique long-term positioning in semiconductor R&D intensity and growing chip complexity.

⸻

Moderate Case: ~2% Revenue / ~5% EPS Decline
While not exact, we reference the ~25% China revenue decline seen in semi-cap equipment under similar restrictions as a comparable framework.
• CDNS: In CY24, CDNS derived 13% of revenue from China. Management expects China revenue to remain flat YoY in CY25, accounting for ~11%.
• SNPS: Generated 15% of CY24 revenue from China but has underperformed in 1H. Management anticipates a YoY decline, in line with its typical back-weighted seasonality (45% H1 / 55% H2).

Assuming a 25% decline in China revenue for the remaining CY25 and all of CY26, we estimate ~2% revenue and ~5% EPS impact for both companies.

⸻

Worst Case: ~10% Revenue / ~20% EPS Decline
This scenario assumes broad and immediate enforcement of restrictions, leading to a full halt in China revenue during the remainder of CY25 and all of CY26.
• CDNS: -10% revenue, -20% pf-EPS
• SNPS: -10% revenue, -19% pf-EPS

⸻

Valuation Pressures Elevated but Still Within Historical Ranges
Following recent EDA stock selloffs, our worst-case scenario implies FY26E P/E of 34x for SNPS (within its 5-year trading range of 24x–47x) and 46x for CDNS (within its 34x–59x range).
• Moderate Case: FY26E P/E of 29x (SNPS) / 39x (CDNS)
• Base Case: FY26E P/E of 27x (SNPS) / 37x (CDNS)

We expect the BIS action to remain an overhang in the near term, but in our view, potential downside is largely priced in. Both SNPS and CDNS remain key long-term beneficiaries of secular semiconductor design tailwinds, supporting our Buy thesis.

⸻

BIS Letter Triggers Sell-Off and SNPS Guidance Withdrawal
The BIS notified SNPS and CDNS that licenses are now required to export, reexport, or transfer EDA software/technology to Chinese customers, citing national security concerns.

Following the announcement, shares of SNPS and CDNS dropped -11% and -12%, respectively, as of Thursday’s close. SNPS withdrew its 3Q25 and FY25 guidance. CDNS canceled its scheduled fireside chat at next week’s BofA Tech Conference. Both companies are actively assessing the potential ramifications of these new restrictions.

$CDNS $SNPS


Summary: Shares Morgan Stanley Equal-weight on ASML (PT €660); near-term orders strong but long-term growth constrained, valuation fully reflects medium-term expectations.

ASML: Short-term Order Performance Optimistic, But Long-term Growth Expectations Tend Towards Conservative

Morgan Stanley (L. Simpson, July 09, 2025)

Morgan Stanley expects ASML's Q2 order performance to be strong, primarily driven by demand from China and TSMC. However, long-term growth is constrained by the slowing growth in EUV layer counts and a weak end market. The firm maintains an "Equal-weight" rating and has raised its price target to €660.

Q2 2025 Orders May Exceed €4 Billion, Driven by China and TSMC

Morgan Stanley anticipates ASML will achieve order volumes exceeding €4 billion in Q2 2025, mainly benefiting from a rebound in Chinese demand and the potential resumption of EUV orders from TSMC. Furthermore, China's revenue contribution in 2025 is expected to increase from the mid-20% range to the high-20% range, and the company is likely to meet the midpoint of its full-year revenue guidance.

Slowing EUV Layer Growth Restricts Long-term Growth Potential

ASML benefited from rapid growth driven by EUV insertion during the N7 to N3 node period. However, it appears that device performance improvements are now shifting towards the system level, and lithography layer counts are approaching physical limits. This is expected to constrain the drivers for future revenue increases.

Future Growth Pace May Differ from Previous Cycle

While current AI infrastructure investment is strong, its impact on spending for leading-edge process equipment is limited. Insufficient support from traditional end markets like smartphones and PCs, coupled with increasing concentration in the wafer foundry industry, suggests ASML's revenue CAGR from 2024 to 2027 will be in the low double-digits. It is unlikely to replicate the large-scale capital expenditure seen from TSMC in FY22.

Valuation Fully Reflects Medium-Term Expectations, Maintaining Neutral Rating

Morgan Stanley believes ASML's current valuation is already quite fully reflected. The company also faces external challenges such as tariff risks, a weak mobile market, and subdued consumer demand.


Summary: TSMC CoWoS capacity up 30%+ YoY; Alchip sole Trainium3 supplier with T4 win likely; Broadcom and Marvell also beneficiaries of rising ASIC/CoWoS demand.

AI Supply Chain Tracking Report

Major U.S. banks have confirmed that TSMC's CoWoS capacity for next year will be in the range of 90-95k, aligning with previous estimates and representing a year-on-year increase of over 30%. Notably, CoWoS-L capacity is expected to expand to 68k (up from a previous estimate of 55k), indicating strong demand for Blackwell or Rubin. Furthermore, the testing time for Blackwell chips will revert to 800-900 seconds from the current 600-700 seconds, as new testing machines begin operation.

Regarding ASICs: It's observed that Alchip is the sole supplier for Trainium3 XPU, with revenue contributions set to begin next year. Marvell will focus on "XPU-attach" chips. The decision for T4 is expected by the end of this month, and brokers anticipate Alchip still has a higher chance of winning.

Turning to TSMC's CoWoS customers for next year:

Nvidia: Total demand for 2026 remains unchanged at 580k units. CoWoS-L estimates have been revised upwards to 550k from 540k, while CoWoS-S estimated orders have been revised downwards to 0, as the H20 chip has not yet received U.S. export permission.

Broadcom: CoWoS usage has been revised upwards to 110k units, driven by increased demand for Meta's MTIAv3 chips.

AWS + Alchip: CoWoS usage has been revised upwards to 40k from 30k, due to the ramp-up of Trainium3.

早安！7/2 外電綜合整理

- 緯創/緯穎、廣達：
美系大行維持6月初的看法不變：針對美系CSP的GB200訂單，緯創提供L10 compute tray, 廣達是L11 組裝與測試。券商預期明年該客戶會下更多訂單，而商業模式也會改變成大家自行處理compute tray, 組裝與測試，此舉可以減少L10 與 L11


Alchip is the sole supplier for Trainium3 XPU, with revenue contributions set to begin next year... brokers anticipate Alchip still has a higher chance of winning


Marvell will focus on 'XPU-attach' chips


Broadcom: CoWoS usage has been revised upwards to 110k units, driven by increased demand for Meta's MTIAv3 chips


Summary: Morgan Stanley W-shaped memory cycle: long Samsung/Hynix/Phison/Longsys/Winbond/GigaDevice; DRAM sector faces 2H correction with prices declining from 4Q25.

「Asia Technology: Memory Outlook – This Time It’s W-shaped」 (Morgan Stanley)

📌 Memory Market Outlook: “This Time It’s a W-shaped Recovery”

⸻

1. Industry Structure and Cycle Overview

• Traditionally a supply-driven cycle, the memory industry is now shifting toward a demand-driven cycle.

• Expectation of pre-purchasing (inventory build-up) in 1H followed by demand rebound in 2H.

• Stock prices have rebounded, but the recovery is mostly based on lagging indicators. Real demand remains uncertain.

⸻

2. Price Trends and Outlook

• 2Q25 DRAM: Currently up +5%, DDR4 surging +20% due to inventory build-up.

• 3Q25: Prices expected to flatten; 4Q25 may see a downturn.

• NAND: +6% in 2Q, +4% in 3Q, flat in 4Q. Production cuts help support pricing.

⸻

3. HBM Market Outlook (2025)

• 2025 HBM TAM revised down from 180B Gb to 155B Gb.

• Key reasons:

• Export controls impacting products like NVIDIA H20

• HBM3E inventory overhang and weakening customer demand

• Product lineup adjustments by NVIDIA and AMD (shifting to GDDR7)

• Samsung may convert HBM4 capacity to commodity DRAM if it fails to secure orders — raising oversupply concerns in DRAM.

⸻

4. DRAM Segment Analysis

• Smartphone/PC DRAM prices: Expected to rise +3~8% QoQ in 2Q25.

• Server DRAM: Up +3% in 2Q25, with strong demand from China.

• DDR4/LPDDR4x: Samsung and SK Hynix plan to phase out production, causing a supply squeeze and sharp price increases (+20%).

⸻

5. NAND Market Analysis

• 3Q25 wafer prices: Up +4% due to production cuts by major players.

• Post-4Q25: Rising price pressure anticipated from increased competition by Chinese players.

• eSSD: Solid demand from U.S. CSPs; China still focused on HDD.

• Smartphones: UFS/eMMC up +5% in 2Q; channel inventory up +10%+.

⸻

6. Strategy and Stock-Specific Investment Highlights

• DRAM: Valuation attractive, but post-1H strength, a correction may follow in 2H.

• Samsung: Trading near cycle-bottom P/B of 1.0x, with upside potential.

• SK Hynix: HBM leader, reflected in premium P/B of 1.9x.

• NAND: Prefer self-sustaining growth stories like Phison, Longsys.

• NOR: Favor Winbond, GigaDevice; beneficiaries of tech migration and supply reductions.

• HBM: Strategically preferred on the back of AI-driven demand.

⸻

7. Key Reasons Behind the W-Shaped Cycle

• Inventory build-up in 1H may lead to a demand gap in 2H.

• Current rebound is temporary, driven by price hikes without real demand.

• Prices expected to decline again starting in 4Q25, with the bottom likely around 2Q26.


SK Hynix: HBM leader, reflected in premium P/B of 1.9x


NAND: Prefer self-sustaining growth stories like Phison, Longsys

Longsys Electronics 301308.SZ China NAND storage


NOR: Favor Winbond, GigaDevice; beneficiaries of tech migration and supply reductions

Winbond Electronics listed on TWSE as 2344.TW


GigaDevice Semiconductor 603986.SS Shanghai NOR flash


DRAM: Valuation attractive, but post-1H strength, a correction may follow in 2H

DRAM sector basket: Micron, Samsung, SK Hynix