Summary: Shares Morgan Stanley Equal Weight on MRVL but with tactical bullish lean: sentiment near bottom, positive stock reaction expected post-ASIC webcast.

structural marker; pre-classified as canonical yfinance ticker

Marvell: Focus on ASIC Updates, Optical Communications Business More Anticipated
Morgan Stanley (J. Moore, June 16, 2025)

Morgan Stanley judges that AI investments are still accelerating, even at current high levels – while Morgan Stanley has its own preferences, all AI beneficiaries should be in a favorable development environment. Marvell is no exception. Given that its performance in the past few quarters met expectations but fell short of higher market expectations, leading to negative market sentiment, Morgan Stanley believes the stock has some tactical appeal before this event.

However, compared to ASICs, Morgan Stanley is more optimistic about the optical module business, and the company's decision to cancel Analyst Day and focus solely on ASICs seems somewhat surprising. Morgan Stanley analyzes that while the cooperation opportunity with Amazon is substantial, this collaboration model has a clear dilutive effect on Marvell's profit margins, as Amazon's Annapurna team undertakes most of the design work.

Nevertheless, Morgan Stanley has re-lowered its average selling price (ASP) forecast for Trainium 2 sales, and the current controversy surrounding Trainium 3 is unlikely to be a significant negative factor in 2025. With related revenue of approximately $2 billion in 2025, starting from a lower base will be beneficial for growth in 2026.

Regarding expectations for this event, Morgan Stanley anticipates that the company will update its AI-related guidance during the webcast, introduce the latest progress of its ASIC customers, and disclose more information about its advanced packaging platforms and custom networking business. Marvell has historically been effective in boosting investor sentiment during Analyst Days, and Morgan Stanley expects an update to AI revenue guidance and TAM (Total Addressable Market) forecasts this time, especially given that its 2024 guidance has been over-achieved.

Regarding the ASIC Total Addressable Market (TAM):

Marvell stated during its AI Day last year that AI-related revenue would exceed $1.5 billion in 2024 and reach $2.5 billion in 2025. In addition, the company projected an overall AI accelerator TAM of $172 billion by 2028 (including standardized products), with custom chips expected to account for 16%, or $27.5 billion. Morgan Stanley points out that this forecast is significantly lower than Broadcom's (AVGO) projected customer SAM (Serviceable Addressable Market) of $60 billion to $90 billion by 2027 (including standard GPUs). Therefore, Morgan Stanley believes Marvell may raise its own forecast at this event. Marvell also once predicted that its overall data center revenue (covering ASICs, switching, interconnect, and storage) could reach $15 billion by 2028, implying a compound annual growth rate (CAGR) of 38% for this business from 2024 to 2028. Morgan Stanley believes this goal is quite challenging. Currently, Morgan Stanley's model projects Marvell's data center revenue to grow from $4.2 billion in 2024 to $6.2 billion in 2025, with AI revenue growing from $2.1 billion to $3.7 billion.
Morgan Stanley does not expect any new AI accelerator customer announcements but remains focused on the latest progress of the two current major customers:

Regarding the Trainium project: Morgan Stanley judges that it previously overestimated the potential of Trainium in terms of price or shipments. It currently expects Trainium 2 to grow linearly in 2025, contributing approximately $2 billion in revenue for the full year. There is still some uncertainty regarding the next-generation Trainium 3; although Alchip (covered by Charlie Chan) may capture a share of some orders, based on Marvell management and multiple channel information, Morgan Stanley believes the company has secured a significant ASIC project from Amazon that will drive growth in 2026. While MRVL needs to maintain confidentiality regarding customer roadmaps, Morgan Stanley hopes this event will reveal more details about related projects for 2026.

Regarding the Microsoft Maia project: Marvell's second AI accelerator customer is believed to be an even greater opportunity than the Amazon Trainium project because Maia is a complete front-end design, utilizing more of Marvell's own IP. Morgan Stanley notes that company management is optimistic about on-schedule mass production in 2025, but due to the high uncertainty of ASIC projects, Morgan Stanley still considers it a "wait-and-see" situation. Although there are rumors that the third-generation chip might shift to AVGO, Morgan Stanley believes this is unlikely – partly due to high conversion costs, and partly because it is currently too early. However, Morgan Stanley believes Broadcom is also observing this project and would actively pursue it if an opportunity arises. Any details regarding project progress will be a market focus.

Regarding stock price judgment: Morgan Stanley believes that the company's most optimistic growth expectation currently comes from its optical module business, which is why its decision to position this event as an "ASIC webinar" rather than an overall AI update is curious. Considering the negative impact from the Chinese market, single-digit growth in optical module revenue this quarter is reasonable. But looking to the second half of the year, as demand recovers, Marvell should see accelerating growth in its PAM4 and 400ZR businesses. Morgan Stanley also notes that while the launch of NVIDIA's Rubin-generation GPU might lead to some market share pressure, such a pullback is acceptable given its already high market share.

Overall, Morgan Stanley maintains its Equal Weight rating on Marvell, not issuing a significantly bullish or bearish signal, as other AI-related stocks are currently more attractive in terms of valuation and sentiment. However, considering that Marvell remains a core member of the AI winners' camp, Morgan Stanley believes market sentiment is nearing a bottom, and the stock is likely to see a positive reaction after this event.

$MRVL


Sovereign AI is likely to begin contributing to NVIDIA's earnings soon. CAPEX spending from non-CSP entities is expected to drive reacceleration of NVIDIA's top-line growth.

Summary: Bullish NVDA: Blackwell ramp at record pace, sovereign AI + Stargate expansion to drive top-line reacceleration, guidance beats even after $8B H20 export hit.

250529_1Q26 NVIDIA [Beat, $3.3tn, 24x]

[Key Takeaways]

(1) The Blackwell ramp-up is progressing at the fastest pace in history. Yield stabilization contributed to gross margins exceeding market expectations by +7%.

(2) Sovereign AI is likely to begin contributing to NVIDIA’s earnings soon. CAPEX spending from non-CSP entities is expected to drive reacceleration of NVIDIA’s top-line growth.

(3) The explosive growth in token throughput from services like ChatGPT and Gemini indicates an exponential surge in inference demand.

(4) The GB300 system, architecturally optimized for Reasoning AI, has begun sampling at major CSPs and is expected to begin volume production and shipments by the end of this quarter.

⸻

[Contents]

(1) Revenue beat by +2%, operating income beat by +7% versus consensus. Shares are up 4–5% in after-hours trading.

(2) FY2Q26(F) Guidance
• Revenue: $44.1–45.9 billion vs. Street estimate of $45.45 billion
• Adjusted Gross Margin: 71.5–72.5% vs. 71.74%
• Adjusted Operating Expenses: $4.0 billion vs. $3.86 billion

(3) The FY2Q26 guidance reflects a revenue loss of ~$8.0 billion due to H20 export restrictions. Even so, the upper end of the guidance range is +1% above consensus.
• Without the $8bn impact, implied revenue would be $53.9bn, which is +18.6% above expectations.
• Street expectations had already been revised down by ~$4bn due to this issue, so adjusted guidance still beats by +9.8%.

(4) In this quarter, a $4.5bn impairment charge was taken due to U.S. export restrictions to China. NVIDIA is also under regulatory investigation by Chinese authorities related to its Mellanox acquisition.
• The impairment is $1.0bn lower than the originally guided $5.5bn.
• H20 deliveries in H1 to China totaled $4.6bn, with $2.5bn undelivered. If fully delivered, the total would have been $7.0bn.
(“Regarding H20, yes, we recognized $4.6 billion H20 in Q1. We were unable to ship $2.5 billion. So the total for Q1 should have been $7 billion.”)

(5) Within the data center segment, networking revenue reached $4.97bn, a YoY increase of +56%, scaling up from $3bn–level in prior quarters to now exceeding $5bn.

(6) While networking’s mix is still below the FY24 level of 18–22%, it has significantly improved from 8.5% last quarter. [Driven by NVLink scale-up, and enhanced connectivity via InfiniBand, Ethernet NICs, BlueField DPU, etc.]

(7) This shift is attributed to a declining revenue mix from U.S. Big Tech hyperscalers and a rising contribution from Sovereign AI and second-tier players.

(8) In fact, when comparing NVIDIA’s data center revenue to the combined CAPEX of the top 4 hyperscalers, the ratio rose to 51.1% this quarter from the mid-40% range in FY25.

(9) With increasing buildouts of AI data center infrastructure across the Middle East and other regions, as well as the global expansion of OpenAI’s Stargate project, these trends are beginning to materialize in NVIDIA’s P&L. This is expected to mitigate China-related uncertainties and drive top-line reacceleration.


Summary: TSMC expected to hit record highs in 2025–26 on AI monopoly; NVDA and AVGO also seen posting strong revenue growth as GPU and ASIC shipments expand 50%+ annually.

ASICs “Ready to Duel” with AI GPUs – TSMC Dominates Orders and Raises Prices -Digitimes

With NVIDIA holding a near-monopoly in the AI GPU battlefield, numerous companies are accelerating the development and mass production of ASICs (application-specific integrated circuits), shaping an industry narrative of an impending “showdown” between NVIDIA GPUs and an expanding ASIC army. Notably, TSMC, which serves both camps, has raised prices for its 2nm and advanced packaging services, helping it grow revenue insulated from tariff and currency fluctuations. The market expects TSMC to continue hitting record highs in 2025 and 2026.

A year ago, NVIDIA CEO Jensen Huang openly declared plans to enter the ASIC battlefield. However, he has since pivoted, now advocating “collaboration over competition” to grow the AI pie together.

According to supply chain sources, AI demand is expected to remain robust over the long term. Shipments of both AI GPUs and ASICs are projected to grow steadily over the next three years. For ASICs in particular, shipments are conservatively estimated to grow at an annual rate of at least 50%. Leading players like NVIDIA and Broadcom are expected to see strong revenue growth, and TSMC—supplier to both—is profiting handsomely.

The rise of generative AI has ushered in the AI era and driven explosive demand for AI servers. NVIDIA, with its combination of GPUs and powerful CUDA software, quickly seized control of the ecosystem, securing dominance from customers to the broader supply chain, with everyone scrambling to collaborate.

Still, supply chain insiders note that while NVIDIA’s AI GPUs are widely used for training and inference, demand has consistently outstripped supply since the boom in 2023. Moreover, the high prices and closed CUDA ecosystem have put cloud service providers (CSPs) and chipmakers at a disadvantage in price negotiations. To mitigate risk and ultimately “de-NVIDIA” their infrastructure, many are accelerating the development of in-house ASICs.

Sources explain that the collective goal of the ASIC players is to reduce dependency on NVIDIA’s expensive GPUs and CUDA stack. NVIDIA’s H100 and latest B200 chips cost tens of thousands of dollars each, and complete server systems can run into the millions. Though self-developing ASICs involves high initial costs, scaling production can dramatically reduce unit costs.

That’s why major NVIDIA clients like Google, AWS, Meta, and Microsoft are not only buying NVIDIA GPUs but also aggressively ramping up their in-house chip programs. They're placing direct wafer orders with fabs to avoid capacity constraints.

Meanwhile, Broadcom—NVIDIA’s primary rival in the ASIC space—has also posted surprisingly strong growth.

Supply chain sources note that while Jensen Huang initially announced an ASIC division to expand the customer base, he later pivoted to unveil the NVLink Fusion strategy. This strategy aims to establish a vast partner ecosystem built around NVLink, enabling semi-custom AI infrastructure development across industries.

This ecosystem includes companies like MediaTek, Marvell, SiFive, Astera Labs, Synopsys, Cadence, Fujitsu, and Qualcomm—but notably excludes Broadcom, raising speculation about the future dynamic between NVIDIA and Broadcom.

On the competition between ASICs and AI GPUs, TSMC Chairman Mark Liu plainly stated:

“It doesn’t matter who wins—NVIDIA and the ASIC makers are all my customers. They all manufacture with TSMC.”

According to supply chain insiders, with Samsung Electronics and Intel far behind TSMC in the sub-7nm race, TSMC has virtually monopolized major orders from 7nm down to the upcoming 2nm node. AI clients are choosing TSMC for its full-stack capabilities, including CoWoS advanced packaging.

TSMC, which closely monitors customer trends and market demand, is aggressively expanding 2nm, CoWoS, and SoIC capacity—evidence that AI demand has not yet peaked.

TSMC previously projected that revenue from AI accelerators will grow at a compound annual growth rate (CAGR) of nearly 45% from 2024 over the next five years. According to supply chain estimates, TSMC’s total CoWoS capacity in 2025 will reach 650,000 wafers, with NVIDIA securing over 370,000 wafers—more than half. ASIC clients are also ramping up, and by 2026, CoWoS capacity is expected to reach 730,000 wafers. From 2025 to 2027, ASIC chip shipments are forecast to grow more than 50% annually.

Meta, xAI, and others will begin bringing ASIC server capacity online in the coming years, with expectations of a major ramp-up in 2026. AWS, Google, and Microsoft are also advancing their AI server platforms. As a result, the supply chain anticipates market expansion, unlocking even more opportunities for collaboration across the

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https://t.co/NJACSC3oHQ


Leading players like NVIDIA and Broadcom are expected to see strong revenue growth


Summary: Shares Citi reiteration of Buy on Hynix and Samsung on memory supply shortage intensifying in 2H25 from GDDR7/LPDDR5X demand.

Citi on Memory:

Expect Supply Shortage to Intensify in 2H25E Due to Strong Demand from GDDR7 and LPDDR5X: We expect the global memory supply shortage to further intensify due to:

[1] rising demand for GDDR7 on aggressive roll-out of AI Inference models and

[2] Apple’s upcoming 12GB DRAM upgrade for the iPhone 17 in 2H25E.

With the anticipation of edge AI devices emerging as a new driver for AI DRAM sales and the increase of mobile DRAM content materializing in 2H25E, we reiterate our Buy ratings on Hynix and Samsung.


Annualized revenue is over $6B. Currently, we expect to achieve this criterion faster. The yield improvement of 12H is particularly contributing significantly. Customer inventory levels are healthy. The demand environment is positive, and the impact of tariffs is considered limited. The Q4 guidance is entirely due to Micron's strong execution and AI growth.

Summary: Bullish MU: HBM TAM doubling to $35B, market share gains accelerating, healthy inventory, strong Q4 execution, and positive AI-driven demand outlook.

Micron FY3Q25 Key Q&A

Q: HBM is expected to remain a market that is 15-20% the size of the overall accelerator (GPU, ASIC) market. Can the HBM TAM expand faster than the accelerator market?

A: HBM TAM grew from $18B last year to $35B this year (CY2025). The HBM bit demand growth rate in 2026 will significantly exceed the overall DRAM bit growth rate. After 2027, technological advancements such as HBM4E and custom HBM are expected.

Q: What is the approximate revenue scale of HBM?

A: Annualized revenue is over $6B. Previously, we stated that we would achieve a market share similar to our DRAM market share (23-24%) by year-end. Currently, we expect to achieve this criterion faster. The yield improvement of 12H is particularly contributing significantly.

Q: At the earnings announcement in June of last year, all 2025 HBM volumes were sold out. How are negotiations for 2026 HBM supply progressing now? Is customers' 2026 HBM demand forecast exceeding our supply capacity?

A: We are focusing on preparing and executing to meet customer demand for 2026.

Q: HBM4 TSV count has doubled. What is the approximate trade ratio of HBM4?

A: HBM4 trade ratio is greater than 3, while HBM3E is approximately 3.

Q: Does HBM bit demand or margin differ by processor customer?

A: Both GPUs and ASICs are high-value-creating products. Both require capacities around 200-288GB. This figure is expected to increase further with the transition to 12-stack in the future. We don't get into the specifics or differentiating the two here regarding clear margin differences.

Q: What is the progress of HBM4 certification?

A: HBM4 products have been sampled to multiple customers and are progressing satisfactorily. There are strengths in both performance and power efficiency. We will be prepared to meet customer demand in 2026. It is manufactured based on the sufficiently verified 1-beta process node.

Q: Capex is currently at about 35% of revenue. Is this level still reasonable in 2026 when the HBM proportion increases?

A: Capex is expected to increase slightly in FY4Q, but the annual forecast of $14B Capex remains. Investments in new fab construction and new process node equipment installation will continue. The timing may be somewhat irregular.

Q: What are the current NAND utilization rate and next year's outlook?

A: Advanced process-based NAND production lines are operating at full capacity. NAND capacity is expected to decrease by approximately 10% by CY3Q25. Overall capacity reduction is expected to lead to higher utilization rates.

Q: What is the reason for the overall margin increase, and can this be seen as a new baseline?

A: Prices have fallen but sales were at better-than-expected prices. 1) Price effect in the current quarter, 2) Inventory reduction effect, and 3) Product mix improvement led to an upward revision of the next quarter's price baseline. Overall, the market is still favorable.

Q: What is your perception of overall customer inventory levels and the outlook for bit demand in the second half?

A: Customer inventory levels are healthy. Some pull-in may have occurred but is deemed minimal. The demand environment is positive, and the impact of tariffs is considered limited. The Q4 guidance is entirely due to Micron's strong execution and AI growth.

Q: The correlation between AI server and SSD demand.

A: Last year, SSD demand was strong, but from the end of last year to early this year, customers were undergoing inventory adjustments in the data center SSD market. The second half is expected to be better than the first half. We plan to further strengthen our SSD business by shifting to a portfolio focused on high-value NAND.

$MU


Morgan Stanley maintains its 'Top Pick' rating on Nvidia, as GB200 ramp improvements and potential H20 license reinstatement could reignite momentum in the second half of the year

Summary: Shares Morgan Stanley Top Pick on NVDA; expects H2 reacceleration on GB200 ramp + potential H20 license reinstatement despite near-term headwinds.

Nvidia: H20 Ban and Supply Bottlenecks Impacting Earnings
Morgan Stanley (J. Moore, May 27, 2025)

Morgan Stanley highlights three key variables to watch in this earnings report:

1. The U.S. export ban on H20 chips to China created a revenue headwind of over 10% in the July quarter—an impact not fully anticipated by management.

2. Shipments of Blackwell GB200 racks were delayed due to “critical obstacles,” but ODM capacity has recently recovered significantly. Multiple channel sources reported that 1,500 units were shipped in April alone. Meanwhile, non-rack form factors such as B200 and Hopper solutions are also fulfilling inference demand.

3. An explosion in inference demand is driving purchases of bare dies and custom systems, confirming the commercial momentum behind AI applications.

Morgan Stanley has revised its April quarter revenue forecast down to $42.2 billion (vs. company guidance of $43 billion), factoring in a roughly $1 billion loss from halted H20 sales. For the July quarter, revenue is projected at $43.5 billion, assuming a $4–5 billion impact from the H20 ban. However, excluding H20, quarter-over-quarter incremental growth would be approximately $6.5 billion, signaling strong underlying demand even amid supply constraints.

Despite short-term limitations due to capacity and regulatory restrictions, Morgan Stanley expects gross margins to remain flat or slightly improve and maintains its “Top Pick” rating on Nvidia, as GB200 ramp improvements and potential H20 license reinstatement could reignite momentum in the second half of the year.

⸻

Key Takeaways:
•H20 Ban Impact:
•April and July quarters saw ~$1B and $4–5B in revenue loss due to the H20 ban.
•Excluding H20, revenue increased ~$6.5B sequentially.
•Rack Shipments Recovering:
•Combined ODM shipments reached 1,500 units in April.
•Non-rack solutions (B200, Hopper) are also meeting inference demand despite supply constraints.
•Surging Inference Demand:
•Hyperscalers globally are reporting unexpectedly strong growth in inference requests.
•This is driving rapid restocking of GPUs and underscores the sustained commercial momentum of AI.


Summary: JPMorgan bullish on Chinese equities for next 90 days: MSCI China at 12.2x P/E below avg, $550bn underweight flows to close, and US-China Grand Bargain now base case.

250512_Comment on the U.S.-China Joint Statement - JPMorgan

[Key Positives from the Joint Statement]

(1) The positives from the joint statement can be summarized in three points.

(2) Tariff cuts exceeding expectations
■ For 90 days, the U.S. will reduce tariffs on Chinese imports to 30%. China will also reduce tariffs on U.S. imports to 10%.
■ A 30% tariff on Chinese goods is lower than the market expectation of "50%" and even below our house's "Bull-Case" scenario of "40%".

(3) A stance against decoupling
■ Both the U.S. and China stated that they do not wish for economic decoupling and have established a mechanism for future negotiations.
(4) Willingness to solve joint issues
■ Bessent stated that both countries will cooperate to resolve the fentanyl issue and strive for balanced trade. He also mentioned the possibility of China signing a purchase agreement for U.S. products.

[The 3 Key Questions]

(1) 1st Question: What is the next catalyst?
(2) Beyond the tariff cuts, the next steps we expect in our bullish scenario are as follows:

(3) First is the removal or relaxation of trade restrictions on advanced technologies such as AI semiconductors.
(4) Second is an "explicit commitment" from China to purchase specific U.S. products to reduce the trade deficit.

(5) Third is a positive statement regarding Chinese companies listed in the U.S. (ADR), and the withdrawal of delisting threats without valid reasons.

(6) We believe these factors are likely to attract market attention during the 90-day negotiation period between the U.S. and China.

(7) 2nd Question: Does a Total Reset imply a Grand Bargain between the U.S. and China?

(8) Trump has so far mentioned a complete reset in U.S.-China relations.

(9) Ultimately, what the market wanted to know was whether, like in past cases, the two sides would cooperate in a limited way only when mutually beneficial economically—or whether they would narrow differences not only economically but also politically.

(10) Now, what was once the most optimistic scenario—Case 2, including political cooperation—is becoming the Base-Scenario.

(11) We believe the U.S. and China are now on the path toward a Grand Bargain, which corresponds to the highest level on JPMorgan Global Research Chair Joyce Chang’s 5-stage U.S.-China decoupling scale.

(12) This is a very, very important shift, as it could 1) raise EPS growth expectations for Chinese companies, and 2) significantly contribute to lowering the geopolitical risk premium.

■ Base Case Scenario: The U.S. and China cooperate only when it is economically beneficial. Political confrontation continues, but trade is partially maintained. This was the realistic base case in the past.
■ Bull Case Scenario: The two sides narrow differences not only economically but also politically, with a clear cooperation plan (e.g., in trade, technology, and security). This is the "ideal vision" the market dreamed of. Even if they remain adversaries, trade continues to some extent. This was previously seen as the Bull Case.

(13) JPMorgan now states that what was previously considered the Bull Case is now becoming the new Base Case.

(14) In other words, the market is beginning to realistically consider not just limited economic cooperation, but the possibility of a broader political and economic Grand Bargain.

(15) Question 3: Can the rally in Chinese equities continue?

(16) Today, the Hang Seng Index rose 3% following related headlines and closed with an additional 2% gain after the joint statement.

(17) We believe that over the next 90 days, the market will face more upside risk, based on three grounds:

(18) Attractive valuation
■ MSCI China is currently trading at a P/E of 12.2x, which is 6% below the 10-year average. In contrast, MSCI EM/DM is trading at a 7%/11% premium to their respective historical averages.
(19) Favorable global flows
■ Most global long-only funds are currently underweight China. To return to a neutral positioning, about $550bn of net buying would be required.
(20) Continued positive news flow expected
■ Both the U.S. and China have incentives to proceed with mutually beneficial agreements, and we believe there is a high probability of continued positive developments.


Can the rally in Chinese equities continue?... We believe that over the next 90 days, the market will face more upside risk

Hang Seng Index proxy ETF EWH (iShares MSCI Hong Kong)


Summary: Increasingly bullish NVDA: dominant HBM/CoWoS allocation, CUDA moat, and Sovereign AI demand all favor NVIDIA over ASIC challengers.

Recently, a friend asked me, "Why are you so interested in ASICs these days?" I replied, "Why am I interested in ASICs? Because NVIDIA is the emperor of this era, and ASICs are challenging the emperor."

However, my friend retorted. He said that designing and manufacturing an ASIC takes 2 to 3 years, and no matter how good the specifications are when designed, it will be obsolete in two years. He also mentioned that many ASIC projects emerged due to Blackwell's delays, but a significant number of them have been paused as Blackwell's supply has eased.

I found my friend's points quite plausible. If NVIDIA's roadmap holds true, a tremendous volume of NVIDIA chips will be released every year, and it might seem difficult for ASICs with a two-year cycle to beat them.

However, I don't think this is necessarily the complete answer. For example, what's to stop the delays experienced with Blackwell from being repeated with Rubin?

Furthermore, no matter how low NVIDIA's Total Cost of Ownership (TCO) may be, will big tech companies continue to accept NVIDIA's high margins? I still find it hard to shake the feeling that big tech companies will be dissatisfied with NVIDIA's gross margins.

Even so, I'm increasingly leaning towards a bullish view on NVIDIA these days.

1. Dominant Position in the AI Chip Market

NVIDIA is the largest consumer of HBM, buying the most HBM from SK Hynix and Micron. According to my personal estimation, about 70% of SK Hynix's HBM is sold to NVIDIA. Also, thanks to its strong relationship with TSMC, NVIDIA has the largest CoWoS capacity allocation.

What does this signify? It means they can sell AI chips faster and in greater quantities than anyone else.

I fundamentally believe that AI is a race against time. Big tech companies are trying to develop faster, more powerful AI than their competitors. This is a chicken game where if you stop, you lose.

Conversely, this means that if big tech companies try to use ASICs for training, having to tailor software for them and work with limited supply and performance from ASICs, they are, by contrast to NVIDIA's case, losing out.

In other words, this was a battle NVIDIA won from the very beginning, when the foundation of AI technology began to be built on NVIDIA's chips and the CUDA software. (Of course, this is under the assumption that NVIDIA also continues to evolve.)

2. The Reality of Sovereign AI

The same goes for Sovereign AI.

I actually think ASICs are more suitable for Sovereign AI.

From the perspective of each nation, instead of being dependent on an American company like NVIDIA, I've always believed that true Sovereign AI means fostering local fabless companies in each country to develop their own AI chips and create independent AI.

However, even for countries rich in chip design technology like South Korea and Taiwan, fostering their own AI chips is an extremely arduous and difficult policy.

Especially in democratic countries with fixed terms, there's a strong tendency to formulate policies based on short-term results.

This implies that few democratic countries will embark on the path of true Sovereign AI, which involves long development times for proprietary chips and uncertain outcomes. Instead, most will buy NVIDIA chips and create knock-offs of ChatGPT.

Unless a country is like China or Russia, where the US restricts the sale of NVIDIA chips, the majority of countries will eventually buy NVIDIA's chips. That's because it's the easiest way to see results in the shortest amount of time.

In this sense, Sovereign AI might be viewed as an "NVIDIA Sovereign Policy" – copying American AI running on American chips (chuckles).


JP Morgan believes that Oracle reported better-than-expected revenue and earnings in F4Q, raised its FY26 revenue guidance to 'at least $67 billion'

Summary: Shares JPMorgan note on ORCL: F4Q beat, FY26 guidance raised to $67B+ (17% YoY), $25B capex, Stargate upside; Neutral rating, $185 PT.

Oracle: Strong Cloud Growth and Heavyweight Capex, Stargate Becomes an Implied Incremental Driver
JP Morgan (M. Murphy, 12/06/25)

JP Morgan believes that Oracle reported better-than-expected revenue and earnings in F4Q, raised its FY26 revenue guidance to "at least $67 billion" (equivalent to 17% YoY growth in USD), and significantly increased its CAPEX guidance to $25 billion, reflecting a high degree of confidence in OCI capacity and the potential business from Stargate.

F4Q Beat Expectations: Q4 CC Revenue Grew 11%, Cloud Business Grew 27%

In Q4, total revenue grew 11% in both USD and constant currency, outperforming the market consensus of 9%. This was thanks to a foreign exchange benefit of approximately $143 million and a $170 million beat, 60% of which came from License revenue. Cloud business (SaaS+IaaS) revenue in constant currency grew 27% YoY, landing at the midpoint of the company's 26–28% guidance range, indicating continued acceleration in the core cloud business. Adjusted operating margin was 44% ($7.0 billion), slightly higher than the market's expectation of $6.8 billion; EPS of $1.70 also surpassed the $1.64 consensus.

FY26 Guidance Jumps: Both Revenue Growth and RPO Revised Upward

Oracle raised its FY26 total revenue guidance to "at least $67 billion," corresponding to 17% and 16% YoY growth in constant currency and USD, respectively, which is higher than the market consensus of 14%. The Total Cloud business is expected to grow by more than 40% YoY, with Infrastructure growing over 70%. Total RPO (Remaining Performance Obligations) is expected to double YoY, reflecting optimism about large-scale AI projects and the potential of the Stargate business. For Q1, revenue growth is guided at 12–14%, with Cloud growth expected to be between 26–30%.

Surging CAPEX: OCI Capacity Expansion Accelerates

The FY26 capital expenditure guidance of $25 billion exceeds market expectations by about 20% and is designated for the procurement of core equipment that directly generates revenue. Oracle emphasized that it only builds new centers when there are orders and is not constrained by GPU supply. While this strong CAPEX commitment will erode short-term free cash flow, it is a necessary measure to support the continued rapid growth of OCI.

Stargate Could Be an Additional Catalyst

Oracle remains cautiously optimistic about the Stargate project, believing it is not fully factored into the FY26 guidance. Once the core AI supercomputing business lands as expected, RPO and Infrastructure revenue could see significant further upside.

Risks and Outlook

JP Morgan points out that although a rising proportion of license revenue and a 250bp sequential decline in profit margins pose potential concerns, the market is more likely to focus on the accelerated revenue growth driven by higher-than-expected AI cloud demand. The firm maintains a "Neutral" rating and a $185 price target, balancing the short-term pressure on free cash flow against the long-term cloud expansion opportunities.

$ORCL


Summary: Certain CRWV is a bubble; strongly bearish.

@qiushao87 CRWV is a bubble. I'm certain of it.

@Jukanlosreve NV seems to have a son that becomes a top-performing stock every year, this year is CRWV😂

In comparison, sovereign AI has failed to drive it to break through DeepSeek's resistance price at 143, while the risks from model iteration are increasing


Even the FY26 CapEx outlook of $25B could be a conservative estimate. Demand is astronomical, and supply constraints are due to equipment purchasing limitations.

Summary: Bullish ORCL: FY26 IaaS >70% growth + RPO >100% guidance underpinned by astronomical demand, non-cancelable contracts, and conservative $25B CapEx estimate.

Key Q&A from Oracle Conference Call

Q. Does FY26 growth guidance (IaaS revenue growth over 70%, RPO growth over 100%) include Stargate?
• Stargate is still a developing project.
• Some business with partners (e.g., OpenAI), despite the official launch not yet occurring, is included.
• However, at this point, OpenAI’s share within the total scale remains small.
• AI, database, and applications areas are all included in RPO.
• RPO consists of non-cancelable contracts, clearly confirming actual demand.
• Supply is not keeping pace with demand, leading to delays or suspensions for some customers.
• Additionally, many recently secured large contracts are unrelated to AI.
• Multicloud demand has also surged dramatically.

Q. Reasons for FY25 CapEx significantly exceeding consensus and explanation of FY26’s $25B figure.
• CapEx mostly goes toward equipment purchases.
• Oracle does not directly construct buildings; construction partners complete them, and Oracle pays rent afterward.
• Increased CapEx indicates Oracle is rapidly filling data centers, implying mass equipment procurement.
• Expansion of capacity is proceeding as quickly as possible.
• Even the FY26 CapEx outlook of $25B could be a conservative estimate.
• Infrastructure orders and builds proceed strictly based on demand.
• Recent orders emphasized “taking all available infrastructure, regardless of location.”
• Demand is astronomical, and supply constraints are due to equipment purchasing limitations.
• Efforts to reduce CapEx through technological improvements are ongoing, but with near-infinite demand, CapEx inevitably rises.
• Currently, there are no issues with GPU supply.

Q. Sustainability and profitability of Oracle’s AI business?
• Oracle’s latest database is an AI-centric vector database, critical for enterprises to practically leverage AI.
• Most current AI models are trained on public data.
• Enterprises, however, require AI models leveraging their internal data.
• Oracle seamlessly connects internal enterprise data and AI models for immediate usability.
• Essential to store data in a format usable by AI models.
• This involves vectorizing data, allowing AI models to effectively search and learn from it.

$ORCL


if Nvidia reports around $44B in Q1 revenue, discusses margin normalization, and provides an honest Q2 guide—not necessarily matching the buy-side's more bearish $45.47B estimate—the stock could still perform well, according to JP Morgan

Summary: JP Morgan view: NVDA can still perform well into earnings even with conservative Q2 guide, despite H20 ban headwinds and margin compression.

Trading Desk Commentary: Nvidia Earnings Preview Analysis
JP Morgan (May 23, 2025)

Overall, if Nvidia reports around $44B in Q1 revenue, discusses margin normalization, and provides an honest Q2 guide—not necessarily matching the buy-side’s more bearish $45.47B estimate—the stock could still perform well, according to JP Morgan.

⸻

■ Sentiment: Market Confusion and Disbelief

As reflected in our very disappointing buy-side survey results (shared with participants), interpreting Nvidia’s guidance this quarter is extremely difficult.

A key factor is the H20 export ban that took effect on April 9, which we estimate could remove $15–16B in revenue from this fiscal year (similar to AMD’s case, this implies ~$7.6B impact on each of the June and September quarters).

Virtually no one on the sell-side has updated their models to reflect this new reality. I expected the buy-side to do better—but based on our high-response-rate buy-side survey, many have not adjusted their numbers either. For instance, the average buy-side estimate still expects the June quarter guide to come in just $920M below consensus, far from the ~$7B cut that would be needed (see my potential estimates below).

⸻

■ Q1 Gross Margin: Confusion Still Reigns

There’s also the issue of Q1 gross margin guidance, which is likely to take a significant hit from the inventory write-down.

Roughly one-third of survey respondents expect gross margin to be ~58%, while the other two-thirds are still clustered around 65–72%, despite the sell-side consensus remaining at 71.1%.

⸻

■ Key Takeaways From Investor Conversations Today
• Some investors say, “Don’t worry, stay positive.” They believe the company may “stuff the channel” before a strong second-half demand spike to smooth earnings. Today’s Oracle (ORCL) news highlighted the upside potential in demand. Doubts about slow ODM ramp yields have begun to fade (Albert Hong wrote a great note on this last week). And we’ve all seen the accounts receivable buildup—there’s no point in debating that anymore.
• A few investors are still including that $15–16B in their full-year estimates, expecting Nvidia to resume some chip shipments to China this year.
• One investor suggested that some of those who missed the recent 35% rally have gone short, and are now talking up expectations to manufacture a “surprise” guide and trap the market. We’ve indeed seen short interest ticking up over the past few weeks.
• Many believe that if the second half improves and GB300 ramps smoothly, any pullback would attract strong buying interest.


Summary: Shares HSBC note: ASIC CAGR 96% through 2027, GB300 mass production 4Q25, RTX6000D >1M units 2H25, general server orders rebounding; bullish on ASIC/GPU server supply chain.

Global Servers: Strong ASIC Growth Momentum, Blackwell and General Server Order Improvement Expected in 2H25

HSBC (F. Lee, 25/06/24)

HSBC points out that ASIC server revenue CAGR will reach 96% from 2023 to 2027, significantly higher than AI GPU's 47%. Concurrently, orders for the GB series, RTX6000D, and general servers are all expected to see an upward turning point in 2H25, highlighting the structural shifts in server market demand.

Significant Growth Momentum for ASIC Servers, Meta and AWS Continue to Drive High-Density Server Upgrades

HSBC projects a 96% compound annual growth rate for ASIC server revenue from 2023 to 2027, far surpassing AI GPUs' 47%. Meta is set to launch its high-density Santa Cruz system with 256 ASICs per rack in 2027, utilizing an orthogonal layout to optimize heat dissipation and wiring. This is expected to drive upgrades in PCB, CCL, power supply, and network accessory specifications. AWS is extending the lifecycle of Trainium 2 and advancing its Teton series high-density racks, which feature liquid cooling designs.

GB200 and GB300 Server Demand Continues to Strengthen, Capacity Yield Remains a Short-Term Key Variable

GB300 is expected to enter mass production in 4Q25, with full-year shipments reaching 7,000 to 8,000 units. Overall GB order volume has been raised to around 30,000 units. Although rack yield in May fluctuated between 40-50%, it is projected to improve to 60-70% in 2H25. Microsoft, Oracle, and Dell are contributing to major new orders, with Quanta, as the core contract manufacturer, pushing forward with GB300 adoption.

RTX6000D Shipments Exceed Expectations Driven by China Demand, Blackwell Transition Ongoing

RTX6000D is expected to ship over 1 million units in 2H25, primarily driven by the Chinese market.
Blackwell HGX (8 GPU) has not yet seen upward revisions in expectations, but the trend of transitioning from B200 to B300 is still underway, and the pace of this transition in 2H25 warrants continued observation.

General Server Orders Rebound in Second Half, AWS and Microsoft as Main Drivers

Although Meta has not yet revised up general server orders, demand for general servers is strengthening from 3Q25 onwards, driven by AWS and Microsoft. Taiwanese ODMs and component manufacturers such as ASPEED and Wiwynn have already reflected the upward trend in 2H25 demand, with full-year cloud server shipments expected to grow by 11%. CSP full-year capital expenditure remains below 25%, indicating that spending will be more concentrated in the second half.

$AVGO $NVDA


GB300 is expected to enter mass production in 4Q25, with full-year shipments reaching 7,000 to 8,000 units. Overall GB order volume has been raised to around 30,000 units


Taiwanese ODMs and component manufacturers such as ASPEED and Wiwynn have already reflected the upward trend in 2H25 demand


ASPEED Technology listed on TWSE as 6674.TW (BMC supplier)


Summary: JP Morgan: EDA export controls short-term headwind for Synopsys/Cadence, indirect benefit to Taiwan fabless (MediaTek, Novatek) and SK Hynix via CXMT yield delays.

EDA Export Controls: Short-Term Disruption to China’s Fabless Sector, Long-Term Catalyst for Localization and Onshore Substitution

JP Morgan (G. Hariharan, 2025/06/02)

The U.S. Bureau of Industry and Security (BIS) has imposed stricter licensing requirements on exports of EDA tools and IP to China, which may cause short-term disruptions for China’s advanced digital IC design sector. However, these measures are likely to accelerate the localization of domestic EDA tools and foster the rise of alternative suppliers, potentially reshaping the industry over the long term.

⸻

• Export Control Tightening and Targeted Entities

Since 2022, the U.S. BIS has restricted exports of EDA software (ECAD) for advanced 3nm GAAFET process design.
In late May 2025, further measures were introduced requiring Synopsys, Cadence, and Siemens EDA to obtain additional licenses for exporting tools and IP to Chinese customers, especially those linked to the defense sector.

These three companies account for over 70% of the global EDA market, meaning that license delays or denials could severely limit access to critical tools and IP for Chinese logic IC design firms.

⸻

• Analog/Power IC Design and Domestic Substitution Potential

This round of export controls mainly targets digital chip design and IP licensing.
The impact on analog and power IC firms is relatively limited, with local Chinese EDA players like Empyrean, Primarius, and Semitronix expected to provide adequate tool support in these segments.

Industry research suggests that local substitution is less challenging in analog and power domains, whereas companies reliant on advanced digital design tools from Synopsys, Cadence, and Siemens will be more severely impacted.

⸻

• Accelerated Localization and Supply Chain Restructuring

In the short term, failure to secure U.S. licenses could result in project delays and development constraints for China’s fabless design firms.

Over the medium to long term, however, the certification and adoption of domestic EDA tools is expected to accelerate.
Chinese firms like Empyrean and Primarius have seen 30%+ revenue CAGR and over 50% R&D CAGR in recent years, and increased support from the government and capital markets will further fuel the maturation of China’s indigenous EDA ecosystem, reducing reliance on imported software.

⸻

• TSMC Advanced Nodes and Design Service Intermediaries

China’s leading fabless firms—especially in non-AI domains such as mobile SoCs, ADAS, and crypto mining—remain heavily reliant on TSMC’s advanced nodes and corresponding PDKs.

However, TSMC primarily supports mainstream U.S. EDA tools and does not fully integrate with Chinese domestic EDA tools.
If licenses for Synopsys, Cadence, and Siemens are denied, these firms may be locked out of leading-edge process access.

Design service providers such as Alchip and GUC could act as intermediaries to obtain licenses and maintain TSMC access on behalf of Chinese clients, but the sustainability of this workaround remains uncertain.

Reduced competition may benefit Taiwanese fabless companies such as MediaTek and Novatek.

⸻

• Impact on Memory Sector and Supply-Demand Dynamics

If EDA tools face similar restrictions as equipment exports, Chinese memory manufacturers could struggle to improve DDR5 yields.

For instance, ChangXin Memory Technologies (CXMT) is reportedly operating a 10Z4nm process comparable to global 1y/1znm nodes.
However, intensified EDA controls could delay yield ramp-up in DDR5, sustaining a tight supply-demand environment for these products.

In the short term, DDR4 demand remains supported, while EDA-related delays in China’s capacity expansion—CXMT plans to ramp up to 300K wafers/month by 4Q25—could indirectly benefit global memory suppliers like SK Hynix.


Reduced competition may benefit Taiwanese fabless companies such as MediaTek and Novatek


Novatek Microelectronics listed on TWSE as 3034.TW


EDA-related delays in China's capacity expansion—CXMT plans to ramp up to 300K wafers/month by 4Q25—could indirectly benefit global memory suppliers like SK Hynix


Summary: Post-MU earnings: cautious on MU near-term reaction but bullish sequentially on NVDA/AVGO first, then memory IDMs (incl. SK Hynix), then materials/components.

250626_3Q25 Micron [Beat, $142bn, 11.5x]

[Key Takeaways]

(1) While strong earnings and guidance were presented, a cautious approach seems necessary regarding stock price reaction.
(2) In the Q&A, management maintained a firm stance and, for the first time in an earnings conference call, officially mentioned HBM margins and bit demand for ASICs comparable to GPUs.
(3) The sequential positive alignment is expected to continue in the order of NVDA/AVGO > Memory IDM > Materials & Components.

[Contents]

(1) Revenue exceeded consensus by +5% and operating profit by +17%. After-hours trading saw a rise of up to +7.4% before paring gains. Currently at +0.6%.

(2) FY4Q25 Guidance

Revenue: $10.4~$11.0bn [$10.7 ± 0.3bn] vs. $9,890.6mn

GPM: 35.5~37.5% vs. 39.16%

(3) FY25 Guidance
CAPEX: $14bn vs. $14,016mn

DRAM: High-teens vs. +11.15%
NAND: Low-double digits vs. +10.87%
S/D: Bit supply growth to be below industry bit demand growth for non-HBM DRAM and NAND

(4) The reduction in after-hours gains is believed to be due to: 1) Some profit-taking given the over 30% performance in the past month, and 2) While FY4Q25 revenue guidance exceeded market expectations, the GPM upper range was more than 150 basis points below market expectations.

(5) HBM revenue reached an all-time high, increasing by approximately +50% QoQ. Estimated at around $1.5bn, this is slightly above 1/4 of SK Hynix's estimated 2Q25 HBM revenue (mid-to-high 6 trillion KRW).

(6) The company mentioned that it expects to achieve HBM market share equivalent to its legacy DRAM share in the second half of this year, driven by the smooth mass production of HBM3E 12-hi.

(7) In the Q&A session, the company projected the CY25 HBM TAM to be approximately $35bn, and reiterated its views on: 1) Custom HBM, 2) The launch of next-generation products HBM4/HBM4E, and 3) Maintaining the excess demand period.

(8) It was also stated that the margins for HBM going into ASICs are not significantly different from those for GPUs, and the bit content for future ASICs is expected to be similar to GPUs.

(9) CAPEX for the current quarter was somewhat reduced at $2.7bn, but the annual total of $14bn remains. Specific CAPEX guidance for FY26 has not yet been provided.

(10) For HBM4, samples have already been provided to multiple customers, with mass production planned starting next year. The main node is 1-b.

(11) Furthermore, the company stated that DRAM inventory will remain very tight in the next quarter (FY4Q25 = June-August 2025 by calendar year), and NAND inventory, which continues to suffer from market weakness, will also improve. However, NAND shows a disappointing performance consistent with guidance vs. DRAM High-teens vs. +11.15%.

$MU


The sequential positive alignment is expected to continue in the order of NVDA/AVGO > Memory IDM > Materials & Components


Summary: Citi bus tour note endorses NVDA full-stack AI infrastructure moat: networking revenue +64% QoQ, Spectrum-X expanding, Infiniband dominance, and end-to-end platform adoption.

250604_NVIDIA: Silicon Valley Bus Tour – CITI

[Key Takeaways]
1. NVIDIA’s AI infrastructure advantage lies in its comprehensive full-stack AI solution.
2. Especially in the networking division, NVIDIA shows strength in both AI server scale-up and scale-out. Its Infiniband and Ethernet offerings each provide significant value depending on customer needs and use cases.

⸻

[Contents]
1. On June 3rd, during our Silicon Valley Bus Tour, we held a meeting with Kevin Deierling, VP of NVIDIA’s Networking Division.
2. NVIDIA is not merely a GPU company — it vertically integrates all layers of AI infrastructure, including:
• Compute (e.g., CPUs),
• Networking (e.g., Infiniband, Ethernet),
• Storage (e.g., DPU, CUDA-based software).
3. NVIDIA’s architecture is optimized for AI workloads, and its powerful software ecosystem is a key differentiator over competitors.
4. For AI cluster networking infrastructure, Infiniband provides:
• Up to 20x greater network efficiency than traditional Ethernet,
• Significantly lower latency.
5. In large-scale AI training/inference environments, Infiniband remains the preferred choice, although Ethernet adoption is steadily increasing.
6. Spectrum-X is NVIDIA’s solution for Ethernet-based AI networking and is already being adopted by several hyperscalers.
7. AI infrastructure is no longer just about compute power — network bandwidth and latency optimization are now essential.
8. NVIDIA leverages DPUs (e.g., BlueField) to offload network processing and security tasks, thereby maximizing system efficiency.
9. The integration with NVIDIA’s software stack — CUDA, NCCL, Magnum IO — enables real performance realization of the hardware.
10.Customers are not just buying chips — they are adopting end-to-end AI platforms from NVIDIA.
11.NVIDIA’s AI networking strategy focuses on AI-optimized execution, using a unified networking operating system to streamline compute-storage communication.
12.The ultimate goal is to minimize Total Cost of Ownership (TCO) per token per second per user.
13.This networking OS is called “Dynamo”, and is referred to as the OS for AI factories (AI server datacenters).
14.After acquiring Mellanox, NVIDIA discontinued traditional campus switch development and focused solely on AI-optimized switches, recognizing that AI’s “agentic flow” demands fundamentally different networking requirements than telecom or web services.
https://t.co/aWtKgnHJmj a result, NVIDIA’s networking revenue grew 64% QoQ, nearing $5 billion.
16.From a scale-up perspective, NVLink (a direct GPU-to-GPU interconnect) generated over $1 billion in revenue.
17. From a scale-out perspective, the Spectrum-X product line (Ethernet-based) is rapidly expanding, with two new customer wins. The run rate of Spectrum-X — including NICs and switches — is estimated at $2 billion per quarter.
18.Infiniband vs. Ethernet:
• Infiniband remains the gold standard in AI and HPC.
• Ethernet is evolving, and hyperscalers prefer it for its familiarity.
• vs. Arista (EOS OS): Arista is attempting to shift from traditional DC switching to AI workloads, but lacks NVIDIA’s end-to-end stack.
• vs. Broadcom: While Jericho offers programmable features, it introduces latency, which is detrimental to AI performance.
19. NVLink currently uses up to 3 miles (4.8km) of copper cable. On a PCB, even 10–15 inch copper traces can introduce signal noise, requiring DSPs and retimers — increasing complexity and cost.
20.The solution is CPO (Co-Packaged Optics) — by placing optical transceivers directly next to the ASIC, electrical signals are immediately converted to optical, eliminating the need for DSPs and retimers and enabling efficient large-scale AI expansion.


Summary: iPhone 17 likely to disappoint on AI; bearish AAPL shipments and negative read-through for memory suppliers MU and SK Hynix in H2.

Report: Korean Memory Industry Worried About Memory Demand Amid Potential iPhone 17 Weakness

According to South Korean media reports, Apple unveiled new AI features at its annual event, "WWDC 2025," but some are calling it "an empty shell."

Apple announced features such as real-time call translation and automatic spam call and message classification for the iPhone.

However, these features appear to be merely echoing existing AI functions in the market. Furthermore, real-time call translation is a technology that Samsung Electronics already introduced in its Galaxy S24 series last year.

Industry experts commented that this event could further exacerbate Apple's disadvantage in the AI market.

Guo Ming-chi, a TF International analyst from Taiwan and a recognized Apple expert, stated, "The most important part of WWDC 2025 for investors is Apple's AI. In a situation where the AI industry is accelerating, if Apple does not significantly increase its investment, it risks falling behind competitors."

The negative impact on the memory industry could also grow.

Until now, there were high expectations that Apple would aggressively enter the AI smartphone competition by significantly expanding memory capacity in the iPhone 17 series, leading to substantial benefits for the memory industry.

For example, AI smartphones that perform AI functions on the device essentially require larger memory capacities. Consequently, predictions emerged that all iPhone 17 series models would be equipped with 12GB of DRAM.

Notably, the average selling price (ASP) of 12GB DRAM is 50% higher compared to the previous 8GB models.

This led to increased revenue expectations for major memory manufacturers like SK hynix and Micron, which supply low-power DRAM (LPDDR) and NAND flash to Apple.

However, if there's no innovation in AI features and Apple's smartphone shipments underperform compared to previous years, it could negatively impact memory performance in the second half of the year.

An industry insider stated, "It is highly probable that Apple's market share in China will continue to decline, and there's a high possibility of extended deferred consumer demand into 2026. We view the success of the iPhone 17 as highly likely to fail."

Notably, Apple, along with Samsung Electronics, is a major purchaser of semiconductors globally. There are also concerns that Apple might push for lower supply prices, citing slowing smartphone demand.

$AAPL

---

https://t.co/CaaZL06hgK


if there's no innovation in AI features and Apple's smartphone shipments underperform compared to previous years, it could negatively impact memory performance in the second half of the year


could negatively impact memory performance in the second half of the year


Summary: Morgan Stanley upgrades Wiwynn and Wistron EPS+PT on strong AI server demand; maintains positive rating on Quanta despite Q2 GB200 miss.

Taiwanese ODM Manufacturers: AI Server Shipments Remain Strong, Maintaining Positive Outlook for Wiwynn, Wistron, and Quanta
Morgan Stanley (S. Shih, July 08, 2025)

Morgan Stanley states that despite unfavorable exchange rates, Taiwanese ODM manufacturers' June revenues generally exceeded market expectations, driven by strong AI server shipment momentum (especially for Trainium 2 and GB200 racks). Morgan Stanley has upgraded Wiwynn's and Wistron's earnings forecasts and maintained positive ratings on the three major ODM firms.

Wiwynn's AI Server Contribution Reaches 40%, Driving Earnings and Price Target Upgrades
Morgan Stanley estimates Wiwynn shipped approximately 8,000 ASIC servers in Q2, contributing nearly 40% to its total Q2 revenue, which reached a record high of NT220.7billion.Q3revenueisexpectedtofurtherincreaseby5232.6 billion. Based on sustained Trainium 2 demand, Morgan Stanley has raised Wiwynn's 2025-2027 earnings forecasts by 34%, 9%, and 12%, respectively, and increased its price target to NT$3,150.

Wistron Benefits from Multiple Client and Regional Expansion, Earnings Upgraded
Wistron benefits from the growth of its subsidiary Wiwynn, expanded orders for enterprise clients' L10 compute trays and L6 board-level assembly (GB300 and Rubin), and potential business expansion in the Middle East market. Morgan Stanley has raised its 2025-2027 net profit forecasts by 11%, 2%, and 8%, respectively, and increased its price target to NT$150.

Quanta's GB200 Shipments Below Expectation, Still Expected to Deliver 10K Units Annually
Quanta's Q2 GB200 shipments were only about 1,300 units, lower than the expected 2,200 units, leading to lower-than-expected Q2 revenue. Morgan Stanley has thus lowered its 2025-2027 earnings forecasts by 3%, 3%, and 1%, respectively, but still expects to deliver approximately 10,000 GB200 racks for the full year. Meta's ASIC project could become a growth driver after 2026.

Middle East AI Factory Investment Brings Long-Term Growth Potential
The Middle East region plans to invest over $500 billion to build 8GW of AI computing power, which is expected to drive demand for 150,000 GB300-level racks over the next five years. Brand manufacturers (e.g., Dell, SMCI, Lenovo) will be major beneficiaries. ODM manufacturers like Foxconn, FII, Wistron, and its subsidiary Wiwynn may also benefit, but this has not yet been incorporated into the earnings models.

GB300 Rack Unit Price Slightly Up, But Assembly Gross Margin Slightly Down
The average unit price for a GB300 NVL72 rack is expected to be $3.2 million to $3.3 million, an increase of 6-10% compared to GB200. ODM manufacturers' assembly gross margin is projected to decrease from 1.7% for GB200 to 1.6% for GB300, still resulting in a pure assembly profit of approximately $50,000 per unit. The overall added value from assembly remains largely unchanged, with major upgrades concentrated at the chip level.


Morgan Stanley has raised its 2025-2027 net profit forecasts by 11%, 2%, and 8%, respectively, and increased its price target to NT$150


still expects to deliver approximately 10,000 GB200 racks for the full year. Meta's ASIC project could become a growth driver after 2026

Quanta in server/ODM context = Quanta Computer, TWSE 2382.TW


Summary: UBS sees HBM supply-demand stable; SK Hynix leads AI ASIC wins while Samsung HBM forecasts are cut; DDR/NAND face potential downturn from Q4 2025 on tariff risks.

Memory Review: HBM Supply and Demand Remain Balanced, SK Hynix Takes Lead Among AI Customers

UBS (T. Arcuri, 25/07/01)

UBS believes that despite statistical differences between HBM shipments and end-demand, the current supply-demand relationship remains healthy. SK Hynix continues to strengthen its position among AI ASIC customers, and industry short-term shipments and pricing are also showing positive trends.

HBM Supply-Demand Discrepancy Driven by Inventory Cycle, Overall Relationship Stable

UBS points out that there are multi-month inventory and packaging lead time differences in HBM shipments. It can take three to four months from HBM manufacturers' shipments to final server deployment, thus the current supply-demand gap does not pose a risk. Considering an inventory factor of about 3.5 months, the HBM supply-demand gap for 2025 and 2026 is projected to be 12% and 6%, respectively. Additionally, UBS has lowered Samsung's HBM shipment forecast to 5.6 billion Gb for 2025 and 8.1 billion Gb for 2026.

SK Hynix Continues to Lead in HBM Customer Acquisition

In terms of AI chip customers, SK Hynix has secured 100% of the HBM3E 8-Hi order for AWS Trainium 2.5 (manufactured by Marvell) and has become the sole HBM supplier for Trainium 3 (manufactured by Alchip). In the Google TPU 7p project, SK Hynix is the primary supplier, with Samsung as a secondary supplier; for TPU 7e, SK Hynix may exclusively secure the HBM3E 12-Hi order. Its HBM negotiations with Nvidia for 2026 are still ongoing, with rising demand for the Blackwell platform likely being a key driver.

Q2 2025 Shipment Expectations Upgraded, Q3 NAND Prices Revised Upwards

UBS has raised its industry shipment expectations: Q2/Q3 2025 DRAM bit shipments are projected to increase by +17%/+11% QoQ (previously +15%/+9%), and NAND by +15%/+7% QoQ (previously +12%/+13%). In terms of pricing, Q2 DDR contract prices are expected to rise by 7% QoQ, and Q3 by 3%; NAND contract prices have been revised down for Q2 to flat (previously +3%), and up for Q3 from -3% to +3%. Considering tariff risks, UBS expects DDR and NAND to enter a three-quarter downturn cycle starting from Q4 2025.

Tariff Policies May Accelerate Implementation, Affecting Future Price Trends

Regarding the implementation timeline for the US Section 232 tariffs, UBS mentions that the policy might be introduced earlier, by late July to early August. If implemented, it could exert some downward pressure on DDR and NAND pricing. UBS makes cautious assumptions for future market trends based on this scenario, demonstrating high sensitivity to industry cycle changes.


UBS has lowered Samsung's HBM shipment forecast to 5.6 billion Gb for 2025 and 8.1 billion Gb for 2026


Summary: Author sees JPM's AI ASIC growth forecast as net bullish for NVDA.

Bullish for NVIDIA

$NVDA https://t.co/tm4fdCaXT8

Mixed Feedback on AI ASICs, but Meta’s MTIA Represents Potential Upside in the Next Phase-JPM

We forecast that AI ASIC chip shipments will grow by approximately 40% YoY in 2025, reaching around 4 million units. This follows a high base in 2024 (70% YoY growth), largely driven by


SK hynix's leadership—already having secured the market—is strongly reflected in recent earnings, suggesting that profit improvement will continue for quite a long time

Summary: Bullish SK hynix on durable HBM leadership and continuing upcycle; bearish NAND on absent AI tailwind.

250605_Semiconductor Market and Outlook for SK hynix (with Meritz Securities Analyst Sunwoo Kim) – SK hynix

⸻

[Key Takeaways]

(1) The AI upcycle will continue, and SK hynix will maintain its leadership in the memory industry based on its technological competitiveness.

(2) The main drivers of AI demand will expand from enterprises to nation-states, and the utility of AI in the multimodal era is only beginning to be discovered.

⸻

[Contents]

(1) SK hynix’s 1Q25 earnings exceeded market expectations significantly.

(2) The title of the Meritz Securities report was “Differentiated Leadership Within the Upcycle.”

(3) This title carries two meanings.

(4) First, that the upcycle is ongoing and will continue into next year. Second—and more importantly—is “leadership.”

(5) The HBM market is unfolding as a completely different one from traditional DRAM.

(6) In the past, competition in memory was all about cost. Neither SK hynix nor other companies could command a premium on product prices.

(7) That era of commodity memory has come to an end due to AI, and we are now in the age of specialized purpose semiconductors [like HBM].

(8) The key difference now is that who makes the product determines its fundamental characteristics.

(9) In this regard, SK hynix’s leadership—already having secured the market—is strongly reflected in recent earnings, suggesting that profit improvement will continue for quite a long time.

(10) The risk to watch out for is that nothing lasts forever. Once second and third vendors enter the market and reach similar quality levels, profit margins will inevitably decline.

(11) It’s true that SK hynix was well prepared when partners and customers within the value chain first approached them, which helped seize the opportunity. But going forward, the company must continue to ask what products can maintain overwhelming competitiveness—and pursue bold investments and strategic direction accordingly.

(12) The most fundamental strength of SK hynix in terms of technology lies in front-end process competitiveness. The company’s leadership in the much more high-end HBM market has been made possible thanks to its 1-b process technology edge.

(13) The 1-c process is also expected to produce products soon, and within the industry, it is seen as having the best energy efficiency [low power, high performance], likely leading to a successful market adoption.

(14) The future task will be to accurately foresee trends and solidify partnerships within the value chain. If customers accept the products proposed by the company, then technological leadership can be sufficiently maintained.

(15) Furthermore, future AI memory demand drivers will move to the nation-state level. Until now, AI investment was mainly driven by corporate competition, but going forward, some countries are expected to position AI as a national growth engine.

(16) By product:
1. DRAM will serve as a computational assistant and core differentiator, commanding a high price.
2. NAND, on the other hand, does not see rising conventional demand and will not significantly benefit from AI, so strategic direction must be considered carefully.

(17) AI has only just moved from text to image. Now, we are entering a full-fledged multimodal era—including video, audio, and more. The real utility of AI that stimulates primal human instincts is only now being discovered.

(18) Always pay attention to the speed and nature of technological change. Especially:
1. What technology is used for computation?
2. Has memory become closer to the computation?
3. Which company is leading at the forefront of that domain?

These will be the most crucial questions going forward.

---

Original:
https://t.co/30O6gHrBbr


The HBM market is unfolding as a completely different one from traditional DRAM… who makes the product determines its fundamental characteristics

HBM sector basket: SK Hynix, Samsung, Micron


NAND, on the other hand, does not see rising conventional demand and will not significantly benefit from AI, so strategic direction must be considered carefully


J.P. Morgan maintains NVIDIA's target price at $170

Summary: Shares JPM maintaining NVDA PT at $170; implied continued bullish stance.

J.P. Morgan maintains NVIDIA’s target price at $170.

$NVDA https://t.co/2RcYsZ31HH


FY26 valuation downgrade pressure remains... significant pressure from declining DRAM revenue in FY26... future valuation and earnings forecast adjustments are likely. Maintain 'In-Line' rating

Summary: Shares Morgan Stanley In-Line on AMAT: FY26 under pressure from -12% DRAM YoY and TSMC share uncertainty; valuation downgrade risk if earnings not revised up.

industry='Semiconductor Equipment & Materials'

AMAT: Valuation Still Attractive, but FY26 Outlook Under Pressure Due to Weak DRAM and TSMC Share Uncertainty

Morgan Stanley (S. Brett, 2025/06/16)

While the short-term outlook is slightly positive, market pessimism for FY26 is increasing, primarily due to a lack of evidence for TSMC's share growth and the high base effect on DRAM revenue. Simultaneously, valuation remains polarized, but the possibility of future valuation downgrades cannot be ruled out.

More conservative view on TSMC, despite technological catalysts.

Regarding TSMC, optimists believe GAA (Gate-All-Around) and backside power delivery technologies will drive AMAT's market share up in 2026. However, Morgan Stanley is more conservative, noting no clear signs of market share improvement in 2024. Short-term forecasts may remain unchanged, but if actual order growth occurs, an upward revision to forecasts will be considered.

Expected FY26 DRAM weakness leads to significant divergence from market expectations.

Morgan Stanley predicts AMAT's DRAM revenue in FY26 will decline by 12% year-over-year, significantly lower than the market consensus (-1%). They believe prior demand from China and Samsung created a high base for FY24-25, leading to more severe year-over-year pressure in FY26, especially for non-China customers starting from 1Q26.

Neutral on overall SPE valuation, but earnings forecast upgrades needed to support stock upside.

Market views are divided: one side believes the SPE sector should command a higher valuation premium, while the other points out that current valuation is already one standard deviation above the historical average, and even higher when factoring in a discount for China business. The firm holds a neutral view, believing that if future earnings expectations are not revised upward, stock upside will be limited.

Short-term TSMC revenue growth to support stock, but FY26 valuation downgrade pressure remains.

Although TSMC is expected to show quarter-over-quarter growth in 2H FY25, alleviating short-term market concerns, significant pressure from declining DRAM revenue in FY26, coupled with current market expectations not fully reflecting a pessimistic scenario, suggests future valuation and earnings forecast adjustments are likely. Maintain "In-Line" rating.


Keep a close eye on a Korean company called Doosan Enerbility — it's the TSMC of the nuclear power industry

Summary: Bullish Doosan Enerbility as the dominant, must-watch nuclear power components play — 'the TSMC of nuclear'.

Doosan Enerbility 034020.KS Korea nuclear/power

@RihardJarc Keep a close eye on a Korean company called Doosan Enerbility — it’s the TSMC of the nuclear power industry.

@Jukanlosreve I agree, wrote about this in december last year: https://t.co/bpFkGGekRt


Summary: Goldman investor meeting: SK Hynix top pick on HBM upside; Samsung re-rating potential on HBM4 catalyst + book value; Micron in contention but secondary preference.

Summary of Global Investor Meeting Feedback on Korean Memory Sector (Goldman Sachs)

1. HBM Pricing and SK Hynix Earnings Expectations

- HBM4 price negotiations are understood to be in their final stages for 2026.
- Investors are concerned that the HBM4 price increase rate might be lower than the cost increase rate.
- However, SK Hynix anticipates an increase in HBM shipments due to strong HBM demand and enhanced competitiveness.
- HBM margins are also expected to remain strong, suggesting upside potential for earnings compared to market expectations.

2. Low Concerns Regarding Samsung Electronics' HBM Qualification Delays, but HBM4 Expectations Exist

- SK Hynix is already shipping the majority of its 12-layer HBM3E.
- Samsung Electronics is experiencing shipment delays due to qualification delays with a major GPU customer.
- Investors did not express significant concerns about Samsung Electronics' qualification delays, judging it more important to fo- cus resources on the future 3rd generation HBM4 and 1c nm.
- If news of HBM4 progress emerges in Q3, it could act as a positive catalyst compared to current low expectations.

3. Traditional Memory Price Increases Are Positive but Impact Is Limited

- Recent memory spot price increases have been notable, leading to expectations of ASP upside.
- Strong price trends are expected to continue until Q3, but some price increases might be attributed to preemptive demand due to tariff issues.
- The price increase is centered on DDR4, where Korean companies have less than 10% exposure, thus limiting the actual impact on earnings.

4. SK Hynix Expected to Increase Capex, Samsung Electronics Opinions Divided

- SK Hynix is expected to see capital expenditure of approximately ₩23 trillion (+$40% YoY) this year due to strong HBM, with potential for further increases if demand exceeds expectations and competitor expansions are delayed.
- Opinions among investors are divided regarding Samsung Electronics' memory Capex. While it's generally expected to remain at last year's level, there's room for an increase depending on HBM qualification progress in Q3.

5. Investor Preference: SK Hynix Maintains Lead, Interest in Samsung Electronics Growing

- At the beginning of the meeting, many questions were about choosing between SK Hynix and Micron, but as time passed, inquiries regarding Samsung Electronics increased.
- Investor preference still favored SK Hynix, with many investors contemplating entry timing due to the recent sharp rise in stock price.
- Samsung Electronics is trading below its book value, and with limited negative catalysts expected after the Q2 earnings announcement, its valuation appeal is highlighted.


Samsung Electronics is trading below its book value, and with limited negative catalysts expected after the Q2 earnings announcement, its valuation appeal is highlighted


many questions were about choosing between SK Hynix and Micron


Summary: JPM bullish on AVGO and MRVL as ASIC market dominators; also flags SNPS, CDNS, ARM as EDA/IP beneficiaries of 30%+ CAGR custom AI chip growth.

ASIC: Custom AI Chip Market Expands Rapidly, Broadcom and Marvell Continue to Dominate the Landscape
JPM (H. Sur, 06/15/25)

JPM points out that with the surge in AI training and inference workloads, the custom AI ASIC chip market is set to reach $30 billion in 2025 and will expand at a compound annual growth rate of over 30%. Broadcom and Marvell will continue to dominate this track with market shares of 55-60% and 15%, respectively.

AI Acceleration Drives Custom ASIC Market Growth, Customers Advance Multi-Generational Product Roadmaps

The high-end custom ASIC chip market is expected to reach $30 billion in 2025, with an annual growth rate of 30%. Cloud service providers and hyperscale customers (such as Google, Meta, Microsoft, Amazon) are accelerating the adoption of custom AI accelerators (XPUs) to gain advantages in performance, power consumption, and cost. They are extending this to multi-generational product plans, forming a basis for long-term growth.

Broadcom Holds #1 Market Share, Leads in 2nm Era, with FY26 Revenue Expected to Reach $31 Billion

Broadcom has achieved breakthroughs in multiple projects, including Google's TPU v6/v7/v8, Meta's MTIA, and a 2nm project with OpenAI and ARM/Softbank. AI-related revenue is projected to be $19.5 billion in FY25 and reach $31 billion in FY26. The company's integrated capabilities in high-performance computing, networking, and advanced packaging constitute its core advantages.

Marvell Continuously Expands Customer Base, Amazon and Microsoft 2nm Projects to Ramp Up from CY27

Marvell is currently mass-producing its first AI ASIC projects (Trainium 2 and Axion CPU) and will mass-produce subsequent projects (Trainium 3, Maia 3nm) in 2026. The company has secured 2nm ASIC design wins from Amazon and Microsoft, which are expected to contribute to revenue from 2027 to 2028. It also has a broad presence in sub-markets like SmartNICs.

Rising Demand for IP and EDA Benefits Synopsys, Cadence, and ARM

The boom in ASIC customization is driving rapid growth in demand for EDA tools and IP cores. As customer roadmaps become more complex and the number of chip design engineers surges, companies that provide design tools and core IP, such as Synopsys, Cadence, and ARM, stand to benefit. The EDA refresh cycle is accelerating, indicating strong future revenue growth prospects.

Custom ASICs Are a Core Growth Engine for Broadcom and Marvell in the Coming Years

Over the past decade, both companies have built leading IP and chip design capabilities through organic growth and acquisitions, creating technological moats in key areas like computing, acceleration, networking, and storage. As AI applications deepen, custom ASICs have become a core growth strategy, driving continuous increases in revenue and valuation.


Marvell Continuously Expands Customer Base, Amazon and Microsoft 2nm Projects to Ramp Up from CY27


Rising Demand for IP and EDA Benefits Synopsys, Cadence, and ARM


Uncertainty is bound to grow... Apple, Sony's biggest customer, is exploring a switch to Samsung. This poses a far greater risk than any of the previous ones listed above.

Summary: Bearish Sony semiconductor business: Chinese clients shifting to smaller sensors, Chinese CMOS rivals gaining share, and Apple potentially switching to Samsung sensors.

Sony Group Corp listed on NYSE as SONY (ADR)

Of course, the uncertainty is bound to grow.

1. Key Chinese clients are shifting back to smaller sensors from 1-inch sensors.
→ This naturally leads to lower unit prices and shrinking margins.

2. Rapid rise of domestic Chinese sensor makers.
→ Chinese CMOS players like OmniVision and Huawei’s in-house sensors have made significant progress, and more Chinese smartphones are adopting them.

3. Apple, Sony’s biggest customer, is exploring a switch to Samsung.
→ Apple, the largest player in the smartphone market and Sony’s most important source of semiconductor revenue, is reportedly considering adopting Samsung’s CMOS sensors.
→ This poses a far greater risk than any of the previous ones listed above.

Sony: Uncertainty is increasing regarding the outlook for its semiconductor business.


I'm not sure if Morgan Stanley really knows what they're talking about when it comes to Intel. From what I've heard, the yield for 18A has already surpassed 50%.

Summary: Implicitly bullish Intel; disputes Morgan Stanley's bearish view, citing 18A yield already above 50%.

I’m not sure if Morgan Stanley really knows what they’re talking about when it comes to Intel. From what I’ve heard, the yield for 18A has already surpassed 50%. https://t.co/0STpfAH2Xv


I'm hoping that SK Hynix will announce around July that all of its 2026 HBM supply has been sold out. NVIDIA can't keep delaying forever either.

Summary: Bullish SK Hynix; expects 2026 HBM supply to be fully sold out by ~July as NVIDIA can't delay contracts indefinitely.

Of course, I’m hoping that SK Hynix will announce around July that all of its 2026 HBM supply has been sold out.
NVIDIA can’t keep delaying forever either.

The reason why Micron CEO SJ did not announce HBM sold-out for 2026 on the conference call is simple: Nvidia is delaying the contract. Nvidia is hoping that Samsung will pass HBM3E validation, allowing them to buy Micron's HBM at a lower price. That's why they're dragging out the


Lowered its shipment forecast... The ASIC segment has also been revised down by 20%... weak execution has raised concerns

Summary: Bearish MediaTek: shipment forecast cut across smartphones (Qualcomm pricing, Xiaomi N3 shift) and ASIC (down 20%), raising execution concerns.

• 2454 MediaTek
→ Lowered its shipment forecast.
→ In the smartphone segment, the reduction is driven by Qualcomm’s price cuts and Xiaomi’s adoption of the N3 process.
→ The ASIC segment has also been revised down by 20%.
→ This segment was originally expected to contribute one-third of the group’s revenue, but weak execution has raised concerns.

5/27 ：
。6498久禾光: 微型鏡頭廠商，產品以NB窄邊框的鏡頭為主，佔公司30%營收以上，今年還會導入AIOT & 人形機器人視覺鏡頭，公司派認為今年會逐季成長，去年EPS5.6,今年6-7.
。8299群聯: 本月56-58億，下月近60億，Q2會有匯損.
。組裝廠目前財務開始回報匯損大概7-10%，5月業績公布前要留意.


Summary: CLSA bullish on PCB/CCL value chain (Elite Material, Gold Circuit, Accton) on ASIC-driven supply constraints; Celestica recovery 2H25; Marvell benefits from Tranium 2 surge.

250527_All Eyes on ASIC – CLSA

[Key Takeaways]

1. Based on our latest CoWoS capacity update, we expect strong ASIC demand in 2025–2026, driven primarily by:
    •  (1) AWS Tranium
    •  (2) Google TPU

2. As a result, supply constraints will likely intensify across the value chain, especially in PCBs and CCL (including mainboards), which should lead to strong earnings for the related suppliers.

⸻

[Contents]

1. According to recent updates on TSMC’s CoWoS capacity, strong ASIC demand is expected to persist through 2025 and 2026.

2. CoWoS capacity is projected to grow from 67K wafers/month in Q4 2025 to 85K wafers/month by Q4 2026, a YoY increase of +27%, led by:

• (1) NVIDIA
• (2) Expanding ASIC demand

3. We estimate that CoWoS demand for AWS Tranium 2 (manufactured by Marvell) will surge by +371% YoY in 2025.

4. Broadcom’s CoWoS demand is also expected to grow +29% YoY in 2026, mainly due to:

• (1) Google TPU
• (2) Meta MTIA v3

5. Demand for Tranium 2 and future next-generation versions is expected to provide strong momentum across the ASIC-related value chain in 2025.

6. Amazon executives have cited bottlenecks in the supply of mainboards, CCL, PCB, and other components essential to AI infrastructure. As component/raw material capacity expands, Elite Material, Gold Circuit, and Accton are expected to benefit.

7. Beginning in 2H25, the ramp-up in mass production of Google TPU v6/v7e/v7p will also drive value chain demand and support strong earnings across related sectors.

8. Celestica previously attributed revenue declines in its Enterprise segment—beginning 4Q25—to a technology transition in AI/ML compute programs for hyperscaler clients, especially related to Google TPU:

• Celestica’s Enterprise segment revenue declined by -10% in 4Q24, -39% in 1Q25, and is expected to decline by -40% in 2Q25(F).
• A recovery is expected from 2H25 onward.

9. Our CoWoS demand outlook assumes Broadcom’s CoWoS demand will grow +29% YoY in 2026, supported by:

• The launch of TPU v6e from 2Q25
• The full-scale ramp of TPU v7p in 2026

10. Thus, the mass production of TPUs starting in 2H25 will positively impact earnings across lower-tier value chain players, especially given continued industry-wide supply constraints.

11. Given the ongoing supply shortage across the sector, we maintain a preference for PCB and CCL companies.

12. Gold Circuit is currently operating at full capacity. The company is expanding capacity at its Suzhou plant in China and completing the remaining half of Phase 1 at its Thailand facility.

13. Elite Material also continues to operate at a tight utilization rate. It is expected to add 600K units of annual capacity at its Kunshan plant, which will bring total capacity to a +15% YoY increase in 2026.

14. GCEis also expected to increase its share of AWS ASIC orders starting from 2H25. Thanks to its proactive capacity expansion strategy, GCE is projected to gain market share over Chinese competitors.


Gold Circuit is currently operating at full capacity. The company is expanding capacity at its Suzhou plant in China and completing the remaining half of Phase 1 at its Thailand facility

Gold Circuit Electronics 2368.TW Taiwan PCB


Elite Material, Gold Circuit, and Accton are expected to benefit


CoWoS demand for AWS Tranium 2 (manufactured by Marvell) will surge by +371% YoY in 2025


Summary: Samsung Q2 seen as the earnings bottom; inventory allowance reversal on HBM shipment recovery expected to lift Q3 operating profit to ~₩8T range.

Report: Samsung Electronics Records ₩1.5 Trillion in HBM Inventory Asset Reversal

Samsung Electronics' operating profit for the second quarter of this year was more than halved compared to a year ago. This significant reduction in operating profit was due to a large-scale reflection of inventory asset valuation allowances in the Semiconductor (DS) division.

However, this allowance is largely characterized as a pre-emptive, one-time cost, and there is potential for partial reversal if shipments recover in the second half of the year. The industry expects Q2 to be the bottom, with a reversal in Q3 potentially leading to an operating profit in the ₩8 trillion range.

On the 8th, Samsung Electronics announced that its consolidated operating profit for the second quarter of this year was provisionally tallied at ₩4.6 trillion. This represents a 55.9% decrease compared to the same period last year (₩10.44 trillion) and a 31.2% decrease compared to the previous quarter (₩6.69 trillion). This figure is also more than ₩1.5 trillion lower than the initial securities firm consensus (₩6.1833 trillion).

This earnings result is provisional, and specific figures by division were not disclosed. However, Samsung Electronics stated in its explanation material that the reasons for the decrease in operating profit included inventory asset valuation allowances in the DS division, export sanctions on artificial intelligence (AI) semiconductors, and reduced line utilization rates.

The industry estimates that Samsung Electronics recognized an inventory asset valuation allowance of ₩1 trillion to ₩1.5 trillion in its DS division. This is analyzed as a result of significantly reflecting unsold inventory of high-performance DRAM, including High Bandwidth Memory (HBM), and the impact of restrictions on AI chip exports to China in the Foundry division.

An inventory asset valuation allowance is an accounting treatment that reduces the book value of unsold inventory to its actual market price. The depreciated amount is recognized as a loss and is deducted from operating profit as an expense.

The product estimated to account for the largest portion of this amount is HBM. Samsung Electronics significantly increased HBM production in response to expanding AI demand, but shipments were not made on time due to customer qualification delays, leaving production as inventory. It appears that a portion of this was processed as an inventory asset valuation allowance. The fact that HBM3E 12-high products have not passed NVIDIA's qual (quality) tests is also a regrettable point for Samsung Electronics.

On this day, Kim Sun-woo, a researcher at Meritz Securities, stated in a report titled 'Intersection of Structural and Lagging Costs' that "Samsung Electronics' Q2 provisional operating profit of ₩4.6 trillion is disappointing, despite strong smartphone performance, due to decreased HBM sales, the reflection of lagging costs from advanced processes, and continued low Foundry utilization rates."

Researcher Kim analyzed, "Around mid-last year, when Samsung Electronics planned for HBM advance production (HBM3E 8-high), I judged that the decision to pre-invest wafers before quality certification results would cause some inventory burden. According to the ambitious production plan that has been underway since last year, it is likely that ₩1 trillion to ₩1.5 trillion in lagging costs, including sluggish inventory, has been recognized this year."

However, the allowance processed as an expense this time will be reversed back into profit upon future product shipments.

On the same day, market research firm Counterpoint Research stated in its report 'SK Hynix, Competing for Leadership with Samsung in the Memory Market' that "Although Samsung Electronics' operating profit for this quarter decreased by 56% compared to the same period last year, performance improvement is expected in the second half of the year as it supplies HBM3E products to AMD and Broadcom." However, it added, "Shipments to NVIDIA remain uncertain," and "Due to intensified sales regulations to China, the increase in HBM sales this year will be limited compared to last year."

---

https://t.co/WbUi0Oq7CP


Summary: Shares Citi Buy reiteration on MRVL; XPU custom projects and interconnect TAM expansion drive long-term growth into 2026.

Marvell: XPU Custom Projects Drive Long-term Growth, Interconnect TAM Continues to Expand
Citi (A. Malik, July 07, 2025)

Citi states that Marvell's stock price has risen by approximately 50% since its low in April. Management effectively boosted market confidence in long-term XPU growth opportunities through its Custom AI Day. Despite variations in project advancement pace, the firm maintains its expectations for XPU penetration and interconnect TAM expansion in 2026, reiterating its "Buy" rating.

XPU Attach Definition and Representative Projects
XPU Attach broadly refers to all custom projects surrounding customized computing engines, such as security offload chips, custom NICs with prefetch capabilities, CXL-enabled DRAM access chips, custom PCIe switches, and scale-up fabrics. These projects help the main chip focus on AI training/inference. Marvell is a primary supplier of such ancillary custom chips, with Meta's custom NIC being a representative example.

Long-term Gross Margin Structure and Profit Model Optimization
Although an increased proportion of ASIC revenue will pull down the overall gross margin to 55-60%, Marvell's operating margin (OM%) is still expected to continue improving, as the majority of R&D costs for custom ASICs are borne by clients. The ASP (Average Selling Price) per chip will also see generational growth due to process iteration and increased functional integration.

Interconnect Market TAM Significantly Expands
Marvell's interconnect product TAM (Total Addressable Market) has increased by 37%, primarily benefiting from DCI (Data Center Interconnect) opportunities driven by expanding AI cluster sizes, the trend of network opticalization (e.g., AEC replacing copper cables), and growing demand for PCIe retimers. Although data center growth is mainly driven by ASICs, the interconnect business still holds structural growth potential.

Project Progress Pace Varies but 2026 Expectations Maintained
Citi notes that the Trainium2 lifecycle might extend into 2026, and Microsoft's XPU project might be delayed by half a year. However, the overall XPU attach opportunity is still expected to ramp up as originally anticipated in 2026. Therefore, long-term forecasts remain unchanged, with Marvell expected to continue benefiting from expansion in both custom computing and interconnect segments.


Summary: UBS reiterates Buy on SK Hynix, raises PT to KRW 277K on DDR pricing uptrend, inventory drawdown, and HBM leadership.

Semiconductor Memory: DDR Pricing Rebound Amid Inventory and Tariff Uncertainty in 2H; HBM Demand Revised Down, but DRAM Outlook Remains Positive

UBS (Nicolas Gaudois, 2025/06/02)

Driven by synchronized demand from servers and smartphones, DDR demand has exceeded expectations, leading to short-term pricing momentum. However, inventory digestion and tariff uncertainties in the second half remain key concerns.
Although HBM demand is being revised downward due to a slower ramp of AI ASICs, SK Hynix maintains strong market share and technological leadership in DRAM, and UBS reiterates its Buy rating.

⸻

• Short-Term Upside in DDR Pricing
• Industry checks indicate that not only smartphone and PC OEMs but also cloud service providers (CSPs) are replenishing DDR5 server memory, leading to bit supply falling short of demand and continued inventory drawdowns across customers.
• UBS now forecasts 2Q25 DDR contract prices to rise 7% QoQ, up from the previous estimate of 5%.
Signs suggest that some DDR4 and LPDDR5 products are seeing price hikes exceeding 10%.
• The 3Q25 DDR contract price forecast is also raised slightly from 2% to 3%.
• NAND Flash contract pricing is unchanged, with expectations of +3% QoQ in 2Q25 and -3% QoQ in 3Q25.

⸻

• Inventory & Tariff Risks in 2H25
• As of May 2025, DDR inventory levels stand at:
• Hyperscaler data centers: ~13 weeks
• Smartphone OEMs: ~10 weeks
• PC OEMs: ~12 weeks
— each down by ~3 weeks from the beginning of the year.
• SK Hynix’s DDR5 finished goods inventory has dropped to ~2 weeks, one of the lowest levels in the industry.
• However, part of the bit shipment growth in 2Q25 is believed to be front-loaded pre-stocking, and
memory shipment growth for PCs and smartphones is likely to moderate in 2H25.
• In addition, the U.S. is considering tariffs of 10%–25% on both Chinese and non-Chinese smartphones,
creating downstream demand risk and pressure in 2H25 contract negotiations.

⸻

• HBM Demand Forecast Lowered
• Due to delays in ramping up AI ASICs like Google TPU v6e/v7 and AWS Trainium 3,
UBS lowers its 2025 HBM bit shipment forecast from 189B Gb to 163B Gb (+89% YoY),
and the 2026 estimate from 291B Gb to 254B Gb (+56% YoY).
• AWS Trainium 2/3 and Google TPU v7/v7e are all configured with HBM3E 12-Hi (144GB),
and contrary to earlier expectations, have not yet transitioned to HBM4.
• SK Hynix continues to expand its market share in cloud AI HBM, underscoring its technological leadership in the space.

⸻

• DRAM Sector Remains Attractive
• While HBM demand faces headwinds, the uptrend in mainstream DRAM pricing remains intact.
With declining inventory and recovering demand, DDR supply-demand tightness is expected to persist into 2H25.
• UBS remains constructive on SK Hynix, reiterating its Buy rating and raising the target price from KRW 262,000 to KRW 277,000,
reflecting the company’s leadership in both DDR and HBM markets and its long-term earnings growth potential.


Summary: BofA adopted: AI accelerator TAM grows to $650B by 2030; NVDA holds 80%+ share, AMD ~5%, AVGO/MRVL ASIC ecosystem 10-15%; consensus estimates conservative with upside for most suppliers.

BofA) AI Accelerators (GPU, ASIC, XPU) 2

While not all computers (including servers) need accelerators, all AI servers must be equipped with accelerators like GPUs, ASICs, and XPUs to be competitive in AI workloads.

Types of Accelerators

There are two main types of accelerators/XPUs: GPUs and ASICs.

GPUs refer to general-purpose or commercial accelerator solutions, designed by Nvidia (NVDA) and AMD (and to some extent, Intel (INTC)).

Considering the continuously evolving nature of AI workloads and the excellent product roadmaps/cycles of the two GPU suppliers, we expect GPUs to maintain 80-85% of the total AI accelerator market over time.

ASICs generally refer to semi-custom-made accelerators designed by AVGO (Broadcom) and MRVL (Marvell) (and Asia-based suppliers like Alchip, GUC). Many hyperscalers with the resources to develop their own accelerators often take this path, collaborating with existing SerDes/IP/design suppliers like AVGO/MRVL. We believe a market for semi-custom accelerators (10-15% of the total market over time) exists for more specialized and repetitive workloads, such as Gmail search and Instagram algorithms, because they can be processed more efficiently on ASICs than on power-intensive GPUs.

Total Addressable Market (TAM)

We believe the AI accelerator market can grow from $126 billion in 2024 to over $400 billion in 2027, over $500 billion in 2028, and over $650 billion in 2030, with a Compound Annual Growth Rate (CAGR) of +26% from 2025-30. For reference, this is the total system market size (including accelerator silicon, HBM, software, packaging, etc.), and custom silicon suppliers like AVGO/MRVL only report their silicon revenue.

We expect Nvidia (NVDA) to maintain approximately 80% or more of the overall AI accelerator market over time, with AMD holding around 5%, and the broader ASIC ecosystem accounting for 10-15%. Therefore, we believe that the consensus enterprise accelerator revenue forecasts (below) are generally conservative and have upside potential for most suppliers.


consensus enterprise accelerator revenue forecasts (below) are generally conservative and have upside potential for most suppliers