JPMorgan expects strong AI demand from the top four CSPs and incremental demand from players such as OpenAI and Oracle to lift Asia Tech EPS by an additional 20–25% over the next two to three quarters

Summary: JPM relays bullish AI demand thesis: Asia Tech EPS +20–25% over 2–3 quarters, no bubble signs, TSMC CoWoS +60%, CSP capex upgrades into 2026–27.

Asia tech sector; AAXJ broad + semiconductor ETFs

JP Morgan: Surge in AI Demand and Price Increases Likely to Drive EPS Upgrades Through 1H26, No Signs of AI Bubble Burst

⸻

1. Continued EPS Upgrades Driven by AI Demand

• JPMorgan expects strong AI demand from the top four CSPs (cloud service providers) and incremental demand from players such as OpenAI and Oracle to lift Asia Tech EPS by an additional 20–25% over the next two to three quarters.

This improvement is likely to materialize mainly in 4Q25 and 1Q26 as the market re-rates growth expectations for the AI value chain in 2026.

• The firm currently forecasts capex for the top four CSPs to grow by 20% in 2026, with potential for further upside.
The hardware component of spending is expected to increase its share — for instance, TSMC’s CoWoS wafer shipments are projected to rise by around 60%.

⸻

2. No Signs of a Semiconductor Bubble — Capacity Expansion Still Absent

• Typical semiconductor/tech bubbles occur when a new demand frontier emerges rapidly (as with generative AI since 2023).
The supply chain races to expand production capacity to meet this demand, leading to a surge in wafer fab equipment (WFE) spending.
However, because it takes 1.5–2 years for new capacity to come online, by the time it does, demand has already shifted, resulting in oversupply and a cyclical downturn.

• Applying this logic to the AI-driven tech cycle, JPMorgan notes that WFE spending has only rebounded 8% from the 2023 trough, and excluding China, the rebound is just 12% — far below the ~80% rebound typically seen in previous up-cycles.
Thus, there are no imminent signs of overheating or a bubble.

• To illustrate, CSP capex totals about USD 379 billion, while NVIDIA + AMD + ASIC revenue amounts to USD 287 billion, and downstream AI-server revenue is only USD 96 billion.
This disparity indicates persistent bottlenecks across the supply chain, from chips to racks and power infrastructure.

⸻

3. Potential for Further CSP Capex Upgrades into 2026 — Early Signs of Debt Utilization

• In addition to the top four CSPs’ strong demand, JPMorgan expects Oracle, OpenAI, and other AI labs to further lift CSP capex in 2026.
So far, most of the top four CSPs’ capex has been financed through operating cash flows, with limited leverage, implying no immediate funding risk.

• Given the competitive nature of generative-AI investments, the top four CSPs are likely to continue aggressive capex spending into 2026 and 2027.
However, for smaller players such as Oracle and CoreWeave, debt financing is becoming an increasingly important factor in funding expansion.

• Still, these smaller CSPs account for only ~11% of the top six CSPs’ total capex, so any structural shift in the composition of capital spending should be monitored beginning in 2026, when debt discussions begin in earnest.
For now, given ongoing constraints in chip supply, rack capacity, and data-center power availability, JPMorgan sees limited near-term downside risk to the AI capex cycle.


TSMC's CoWoS wafer shipments are projected to rise by around 60%

structural marker; pre-classified as canonical yfinance ticker


CSP capex totals about USD 379 billion, while NVIDIA + AMD + ASIC revenue amounts to USD 287 billion


NVIDIA + AMD + ASIC revenue amounts to USD 287 billion


Summary: Taiwan PCB makers GBM, Dynamic, Unimicron, GCE named as primary beneficiaries of Google TPU v7 ASIC supply chain ramp through 2026-2027.

GBM (Gold Bridge Machinery) PCB Taiwan 8462.TW

Meta's Google TPU shift opens new AI supply chain for Taiwan PCB makers

Recent market rumors indicate that Meta is negotiating to deploy Google's seventh-generation TPU "Ironwood" in its data centers by 2027, with procurement potentially reaching tens of billions of US dollars. This move signals confidence that Google will become a leading ASIC chip supplier, challenging Nvidia's dominance and securing the second spot in the AI accelerator market.

Shifting market dynamics
Industry experts analyze that if confirmed, this development will shift the AI computing power market shares, presenting Nvidia with coexistence threats from Google-led ASIC forces. It will also accelerate the emergence of an alternative server PCB supply chain diverging from Nvidia's established path.

Because the ASIC server supply chain structure differs somewhat from the GPU ecosystem—and ASIC chips demand higher quantities and specifications for PCBs—Taiwanese manufacturers entering the Google TPU supply chain stand to benefit first from the PCB upgrade wave.

Taiwan's strategic advantage
Currently, Nvidia holds a greater market share in PCB motherboards and upstream copper-clad laminate (CCL) materials through Chinese and South Korean suppliers. In contrast, ASIC vendors like Google, AWS, and Meta rely more heavily on Taiwanese suppliers.

Reportedly, Taiwanese PCB firms such as PSA's GBM and Dynamic have passed certification for compute boards used in Google TPU v7. These boards utilize M7-grade CCL materials supplied mainly by Japan's Panasonic and EMC.

Notably, GBM leveraged its acquisition of Japanese PCB giant Lincstech to successfully enter Google's TPU supply chain. Together, they shipped 220,000 units of AI server compute and switch boards in the first three quarters of 2025, accounting for 45% of revenue, with full-year shipments expected to reach 320,000 units.

Expanding portfolios
Dynamic, originally focused on automotive PCBs, has intensified efforts in networking and server markets, with plans to join Google TPU supplies starting in the second half of 2026. This expansion is projected to balance GPU and ASIC customer revenues evenly, pushing AI-related income from GPU, ASIC, and switch products above 20% of total sales.

Additionally, IC substrate leader Unimicron secured ABF substrate orders for Google TPU v7 advanced packaging via CoWoS technology. Meanwhile, GCE primarily supplies universal baseboards (UBB) for networking and server PCBs.

Growth projections
DIGITIMES Research notes that, driven by increased external computing demands from Anthropic and Apple, alongside delays in AWS's next-generation Trainium3 production, Google TPU stands out as the most significant ASIC product in 2026. Shipments are forecasted at 3.325 million units, nearly one million more than in 2025, maintaining Google's lead in global ASIC accelerators.

Official announcements describe TPU v7 as Google's custom-designed ASIC chip tailored for large language model (LLM) training and AI inference workloads. Its peak performance improves tenfold over TPU v5p, with a formal launch planned within weeks.

Google TPU v7p reportedly entered mass production in the third quarter of 2025, and related PCB supply chains are expected to ramp up ASIC customer shipments starting in the first quarter of 2026, contributing to steadily growing AI application revenues quarter by quarter.

---

https://t.co/djDczHGrCN


Dynamic, originally focused on automotive PCBs, has intensified efforts in networking and server markets, with plans to join Google TPU supplies starting in the second half of 2026

Dynamic Electronics 6214.TW Taiwan PCB for Google TPU


IC substrate leader Unimicron secured ABF substrate orders for Google TPU v7 advanced packaging via CoWoS technology

Unimicron Technology listed on TWSE as 3037.TW


GCE primarily supplies universal baseboards (UBB) for networking and server PCBs


in 2026, shouldn't the sector be allowed to trade at a somewhat higher valuation?

Summary: Bullish DRAM sector into 2026 on constrained cleanroom capacity / no new supply until 2027; conservative (bearish) on NAND.

DRAM sector basket: Micron, Samsung, SK Hynix

I think of it this way.

Right now, the three major memory companies don’t have cleanroom capacity. Even if they want to expand, they can’t.

Among the fabs currently under construction, the earliest one won’t come online until 2027.

So in 2026, shouldn’t the sector be allowed to trade at a somewhat higher valuation?

Of course, this is assuming DRAM only. I’m still conservative on NAND.

@Jukanlosreve @BenBajarin Tsmc does that because tsmc has no competition. Also tsmc is not building standardized products like ddr and nand which are close to pure commodities like oil and gas.

All it takes is one player to overbuild for the market to get loose. And even if they wait for LTAs to build,


Summary: Bullish Alchip (3661): confirmed AWS Trn3 orders worth $3B+, potential $6B+ total, above-consensus EPS of $180/$240/$300 for 2026-2028, stock undervalued at <20x 2026 P/E.

Update on Alchip (3661) — Trn3 and new customer developments

    1. Reconfirmation of Trn3 schedule
In a recent closed-door meeting, the company reaffirmed that the Trn3 timeline remains unchanged.
    • Trn3-1: Tape-out in Q1 2025, mass production in Q1 2026
    • Trn3-2: Tape-out in Q3 2025, mass production in Q2 2026
    2. AWS Trn3 2026 shipment confirmed
Alchip currently has a confirmed order volume of at least 1 million units for AWS’s Trn3 project in 2026.
    • Unit price: $3,000 per chip
    • Estimated revenue contribution of at least $3 billion in 2026
    3. 2026 Trn3 volume exceeds market expectations
TSMC has agreed to provide capacity support for at least 3.5 million units,
and Alchip may revise upward the total revenue scale of the Trn3 project to over $6 billion.
    4.Actively seeking additional orders from Annapurna
Alchip is actively negotiating with Annapurna Labs for more wafer input.
The main reason for the potential upward revision is that the CoWoS design capability and yield improvement for this project have exceeded expectations.
    5. New customer engagements
    • Intel Jaguar Shores (rack-level GPU): Alchip is in discussions with Intel, and the project may be finalized in 1H 2026.
    • Meta Arke project: Alchip also has the opportunity to undertake the main chip backend design work.
    6. EPS forecasts and valuation
    • 2026/2027/2028 EPS: $180 / $240 / $300
    • These figures are above market expectations and may be revised upward.
    • The stock remains undervalued, trading at below 20x 2026 P/E, making it relatively inexpensive within the AI sector.

#市場小作文 #RUMOR
轉
世芯3661 Trn3及新客戶近況更新
1. 近期閉門會議公司重申Trn3時間點，確認無延期，維持Trn3-1 Q1 25 tape out，Q1 26量產。Trn3-2 Q3 25 tape out，Q2 26量產計畫。
2. AWS Trn3 2026目前世芯有確定的量至少1mn，一顆$3000，營收貢獻2026年至少$3B
3.


Summary: Mizuho raises AVGO PT to $435 on Anthropic/OAI AI-rack demand ramp; flags potential headwind for MRVL.

Mizuho) Broadcom raises target price to $435

AVGO — As OAI has become the “fifth” customer and is expected to contribute an additional 2GW of demand in 2025, Anthropic is likely to become the “fourth” customer. We now view Anthropic as AVGO’s fourth customer, with its revenue from the “AI rack” expected to increase to $10 billion by the second half of 2026 (this could be potentially negative for MRVL/Trainium).

The 10GW OAI partnership (link) represents incremental demand: as OAI targets approximately 2GW of capacity expansion in 2026 (about double year-over-year), it will become AVGO’s fifth customer, with demand ramping from the fourth quarter of 2026 (expected). We believe OAI will increase its capacity across GPUs/ASICs to approximately 2GW/3GW/4GW in 2026/27/28 (expected). We also expect other major CSPs (cloud service providers) to expand their capacity to 2–4GW over the coming years, which remains below many widely reported GW figures.

AVGO also launched the third-generation CPO (Co-Packaged Optics) Tomahawk 6-Davisson, featuring more than 70% lower power requirements and 1 million “flap-free” hours (we believe over 5 million “flap-free” hours may be required for reliability). AVGO additionally introduced the new Thor Ultra 800G NIC (Network Interface Card) with telemetry, load balancing RoCE, and open architecture, and announced the expansion of its Jericho product line to support “Scale Across.”

With Anthropic adding incremental tailwinds, we raise our estimates and target price to $435.

$AVGO


this could be potentially negative for MRVL/Trainium


Summary: Goldman relays TrendForce's sharply upgraded 4Q25 DRAM/NAND price outlook, beating GS estimates for Samsung and SK Hynix; bullish memory cycle into 2026.

251110_South Korea Technology: Oct. 2025 memory pricing - Goldman Sachs

(1) TrendForce again significantly raised its outlook for 4Q25 DRAM price increases.

(2) This comes on top of its upgrade in mid/late October, when it had already raised the 4Q25 Legacy DRAM price increase outlook from QoQ +8–13% to +18–23%.

(3) The latest outlook is higher than our current estimates for SEC/SKH Legacy DRAM price increases [SEC: +22% / SKH: +20%].

(4) TrendForce noted that server customers are now requesting allocations out to ’27.

(5) It also assessed that strong server customer demand is increasing supply uncertainty for non-server applications, thereby strengthening memory vendors’ bargaining power.

(6) PC DRAM price outlook raised: 4Q25 QoQ +25–30%
■ In October, D4 8GB rose MoM +17% to $31.5, and D5 8GB rose MoM +25% to $33.5.
■ D5 is contracting at a +6% premium to D4 [vs. a 1% discount in September].
■ As supply tightens further in 4Q25, TrendForce raised its PC DRAM price increase outlook from +18–23% to +25–30%.

(7) Server DRAM price outlook raised: 4Q25 QoQ +28–33%
■ In October, D4 64GB rose MoM +28% to $300, and D5 64GB rose MoM +24% to $338.
■ The D5 premium fell by 3pp MoM to about 13%.
■ U.S. hyperscalers are now discussing allocations not only for ’25 and ’26 but out to ’27, providing memory suppliers with medium- to long-term visibility.

(8) LPDDR [handset] price outlook sharply raised: 4Q25 +38–43%
■ For both LPD4/5, on intensifying tightness, the price increase outlooks were raised from +18–23% and +20–25% to +38–43%.
■ The situation is so tight that some vendors are temporarily refraining from offering quotes at all.

(9) NAND: Price upcycle expected to continue throughout ’26
■ TrendForce expects the NAND price upcycle to persist throughout 2026.
■ 1Q26 +3–8% / 2Q26 +5–10% / 3Q26 +0–5% / 4Q26 +0–5%
■ Strong server demand and tight supply offset concerns over weak consumer demand.


Summary: Wells Fargo maintains ANET as well-positioned despite Spectrum-X fears; NVDA networking momentum continues with Meta/Oracle wins.

Wells Fargo) NVIDIA: Meta and Oracle to Use NVIDIA Spectrum-X Ethernet; Concerns About ANET Are Overblown

Our View

This morning, Meta and Oracle announced they will each use NVIDIA’s Spectrum-X Ethernet for the Facebook Open Switching System (FBOSS) OS and for giga-scale AI factories, respectively.

Derivative concerns about ANET (Arista Networks) are excessive — we maintain that Arista remains well positioned.

Initial Analysis

What’s new:

This morning, NVIDIA announced that Meta will integrate NVIDIA’s Spectrum-X switches with the FBOSS (Facebook Open Switching System) on its next-generation Minipack3N switch. We view this as a natural extension of Meta’s Minipack line.

For reference, the Minipack3 introduced last year transitioned to Broadcom’s Tomahawk 5 (51.2T) silicon, integrated with Cisco’s G200-based 8501 switch and Celestica-manufactured hardware.
NVIDIA also announced that Oracle will adopt its Spectrum-X Ethernet solution to build giga-scale AI factories, aimed at interconnecting millions of GPUs into a single massive computer for next-generation frontier AI model training.
According to NVIDIA’s press release, this deployment is aligned with Oracle Cloud Infrastructure’s (OCI) next-generation Vera-Rubin architecture, targeting rollout in 2026.

Networking Context
For reference, NVIDIA’s F2Q26 networking revenue reached $7.252 billion (+98% YoY, +46% QoQ).

Spectrum-X Ethernet revenue alone exceeded an $8 billion annualized run rate in Q1 and surpassed $10 billion by the latest quarter.

At Hot Chips 2025 (Aug 26), NVIDIA highlighted its new Spectrum-XGS Ethernet designed for giga-scale AI superfactories with 1,000 km+ reach, focusing on inter-data center connectivity.

This architecture emphasizes AI-optimized Ethernet over generic off-the-shelf (OTS) Ethernet, claiming a 1.9× NCCL performance advantage in multi-data-center communication.

ANET Analysis – Concerns Are Overblown

While this announcement may weigh on ANET’s share price and reinforces the view that Spectrum-X momentum is a key competitive dynamic, we believe these fears are overstated.
We continue to see Arista Networks as well positioned in Oracle’s (OCI) and OpenAI’s Stargate data-center build-outs.

We also believe Arista maintains a solid position within Meta’s data-center leaf-spine architecture, particularly in distributed Ethernet switch (DES) networks supporting AI clusters.

Arista also holds strong potential to play a core role in Meta’s future scale-up architectures.

Arista and Broadcom are scheduled to co-host a session at the Open Compute Project (OCP) titled “Scale-Up Ethernet (SUE) Framework for AI/ML Accelerators” on Wednesday at 10:05 a.m. PT.

We see Arista’s participation in scale-up networking as a potential additional growth driver beyond 2027.
At its recent Analyst Day, Arista management mentioned that it is already involved in “many projects” within the scale-up segment.

$ANET


Spectrum-X Ethernet revenue alone exceeded an $8 billion annualized run rate in Q1 and surpassed $10 billion by the latest quarter


Summary: Meritz maintains positive view on Korean front-end equipment sector on Samsung P5 investment; top picks Wonik IPS and TES, also positive on Eugene Tech, GST, PSK, EOTechnics.

Samsung Electronics listed on KOSPI as 005930.KS

[Meritz Securities IT Kim Sun-woo / Kim Dong-kwan]

Hello. This is Kim Sun-woo / Kim Dong-kwan from Meritz. We are sharing our firm's comments on the media reports regarding Samsung Electronics' P5 investment.

▶ Implications of Samsung Electronics' P5 Investment Announcement

[Samsung Electronics' P5 investment announcement. Assessed as a long-term investment plan aimed at securing mid-to-long-term competitiveness]

According to media reports, Samsung Electronics held a temporary management committee meeting and announced plans to proceed with the framework construction for Pyeongtaek P5.

The company currently operates a total of 4 production fabs up to P4 at its Pyeongtaek campus. In the case of P4, where investment recently began, around 60k of DRAM Capa is expected to be added between 4Q25 and 2Q26.

The company had originally planned to start the P4 investment in early 2025, but it has shifted direction to execute the investment at a time when visibility for DRAM price increases is secured. This investment announcement is unrelated to oversupply and is assessed as a sound investment execution plan aimed at securing mid-to-long-term competitiveness.

The company's P5 investment has the following two implications:

1. Production start at the earliest 1H28, unrelated to short-term supply increase: P5 was prepared with the intention of securing cleanrooms in advance during a downcycle, following Samsung Electronics' past 'Shell-First' strategy, but it had been delayed until recently due to the HBM-focused market development in 2024-2025.

Now, Samsung Electronics has decided to partially pull forward the P5 investment to lead the market, based on establishing price negotiation power for some commodity products and securing business visibility. It is assessed that this was partially influenced by the disclosure of the operation schedule for competitor SK hynix's Y1 fab.

However, Y1 also begins operation in 1H27 at the earliest, and P5 will only start operations in 2028, so concerns about a short-term increase in memory supply are non-existent.

Investors should note that, unlike in the past, memory makers' production expansion efforts are focused on a 'mid-to-long-term' perspective. The immediate front-end equipment investment that used to occur during past upcycles is proceeding only in a limited manner, and an unusual cycle is continuing where all producers are focusing on profitability rather than current volume.

2. 3-story structure for synergy creation upon foundry recovery: P5 is presumed to be the latest fab with a wider site area and a 3-story structure (vs. the existing 2-story structure), enabling greater vertical cleanroom space utilization.

Assuming the recovery of foundry competitiveness, Samsung Electronics will be able to configure efficient production lines through sequential investments in a total of Phase 6 starting from 2028.

It is judged that it will be possible to reduce production time and secure cost competitiveness by configuring continuous and sequential production lines for foundry processes (ASIC, etc.) and memory processes in the future. However, expanding foundry orders and securing process competitiveness after SF2P are essential prerequisites.

[Impact on Value Chain and Investment Opinion – Maintain Positive View]

We maintain our positive investment opinion on the front-end equipment sector following this investment announcement. Considering the expected mass production timing (2028E), new orders for P5 from front-end equipment makers are expected to occur starting from 2H27E.

The impact on 2025-26 earnings is limited, but this period is already a time when earnings growth is expected due to new P4 DRAM investment and conversion investments in existing DRAM/NAND lines.

Typically, the stock prices of the front-end equipment sector move in tandem with expectations for the memory industry outlook and front-end customer CAPEX. The stock price rise since September is the result of expectations for 2026E CAPEX expansion being reflected as a multiple-centric expansion.

This investment announcement is positive in that it secures visibility for the long-term profit growth of equipment makers. 2027 is when SK hynix's Yongin Cluster construction and equipment investment will be underway. In addition, the P5 equipment order momentum in 2H27 and equipment revenue recognition in 2028E are expected to unfold sequentially.

As profit growth beyond 2026 and further acceleration of investment unfold, it is expected to have a positive impact on equipment sector stock prices.

We suggest Wonik IPS and TES as beneficiaries within our coverage. As of 1H25 cumulative, the sales exposure to Samsung Electronics is estimated at 58% for Wonik IPS and 35% for TES. Wonik IPS can benefit from investments across all of Samsung Electronics' product lines—DRAM, NAND, and Foundry—through its general-purpose CVD/ALD equipment.

In addition to the companies mentioned above, it is expected to lead to benefits for all front-end equipment companies with high sales exposure to Samsung Electronics.

The Samsung Electronics exposure we estimate for major front-end equipment/facility companies is as follows: Wonik IPS (58%), TES (35%), Eugene Technology (40%), GST (50%), UNISEM (50%), PSK (25%), EOTechnics (25%).


We suggest Wonik IPS and TES as beneficiaries within our coverage

TES (Korea semiconductor equipment, Wonik IPS context) listed on KOSDAQ 095610.KQ


it is expected to lead to benefits for all front-end equipment companies with high sales exposure to Samsung Electronics

Eugene Technology 084370.KQ Korea KOSDAQ LPCVD


GST Co. 036830.KQ Korea semiconductor equipment


industry='Semiconductor Equipment & Materials'


Summary: Bullish Broadcom on Hock Tan's cost-cutting discipline; investors should feel reassured.

If every CEO were like Hock Tan, it would be wonderful. Broadcom investors must be very reassured. Imagine having a CEO who is so focused on extreme cost-cutting. https://t.co/xS13HUgKJ9

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https://t.co/dwfAoZz7tb


Samsung Electronics' DRAM average selling price (ASP) will rise by the high teens percent compared with the previous quarter

Summary: DRAM super cycle driving high-teens ASP increase for Samsung and high-single-digit for SK Hynix in Q4; profitability revisions higher expected, with prices rising into Q1 next year.

Samsung Electronics Eyes High-Teens Increase in DRAM ASP in Q4

Samsung Electronics and SK hynix are fully enjoying the benefits of the DRAM “super cycle” triggered by the AI industry. As customer orders for high value-added and legacy DRAM are surging, there are projections that in the fourth quarter Samsung Electronics’ DRAM average selling price (ASP) will rise by the high teens percent compared with the previous quarter, while SK hynix’s will increase by the high single digits.

According to industry sources on the 21st, the DRAM ASP of major domestic memory suppliers in the fourth quarter of this year is expected to increase significantly compared with earlier expectations.

Recently, demand in the memory market has been surging as global big tech companies aggressively expand their AI infrastructure. In particular, orders for high value-added products such as server DRAM and HBM (high-bandwidth memory) have been brisk.

Commodity DRAM used in PCs and smartphones is also suffering from a severe supply-demand imbalance. This is the result of major memory suppliers allocating most of their DRAM production capacity to HBM and focusing on conversion investments instead of building new mass-production lines. In addition, as memory suppliers sharply reduce the share of legacy products such as DDR4, the prices of these DRAMs are also skyrocketing.

In response, major IT companies are pursuing strategies that prioritize securing memory supply even at the cost of higher expenses. Chinese companies such as Xiaomi and Alibaba have accepted price increases of more than 50% compared with the previous quarter, while Lenovo has stated that it has signed long-term supply contracts for next year’s memory to stabilize its supply chain.

A semiconductor industry official said, “Price negotiations for the fourth quarter have progressed to a considerable extent, but since the timing of contract signings differs by customer, Samsung Electronics and SK hynix are expected to continue signing memory supply contracts through the end of this year,” adding, “In particular, Samsung Electronics is known to be pursuing a more aggressive price hike strategy than its competitors in commodity DRAM.”

There is also a very high likelihood that the increase in DRAM ASP for the domestic memory industry in the fourth quarter of this year will exceed earlier expectations. Previously, Samsung Electronics disclosed that its DRAM ASP in the third quarter of this year rose by the mid-teens percent compared with the previous quarter, while SK hynix’s increased by the mid-single digits.

In the fourth quarter, Samsung Electronics is expected to see an ASP increase in the high teens percent. At the time of last month’s third-quarter conference call, the increase was estimated to be in the low- to mid-teens percent, but reflecting contracts recently concluded, the prevailing view in the industry is that an upward revision of the increase is inevitable.

SK hynix is expected to see an increase in the high single digits. Because the sales proportion of commodity DRAM is relatively small, its price uptrend is structurally bound to be more moderate than Samsung Electronics’.

Another industry official said, “Although the contracts have not yet been finalized, given the current mood, the profitability of the two companies’ DRAM businesses will need to be revised higher,” adding, “Since prices are expected to continue rising in the first quarter of next year as well, the key will be how much the two companies choose to moderate the pace.”

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https://t.co/4oHiuNRlMA


SK hynix's will increase by the high single digits


the profitability of the two companies' DRAM businesses will need to be revised higher

Korea DRAM sector: Samsung Electronics + SK Hynix


Summary: KIS maintains Buy/Overweight on Korean semis: DRAM supply shortfall in 2026, HBM margins 65–70%, WFE-driven equipment earnings rising through 2026–2027.

[KIS Chae Min-sook / Hwang Joon-tae] Semiconductor Industry Brief: Comments on Semiconductor Stock Price Declines

● Fundamentals remain solid; we need to wait for the storm to pass

• Following Kioxia’s earnings shock the previous day, share price pressure has spread to memory-related names that had surged in a short period, and semiconductor stocks are falling on macro issues such as FX as well.

• Compared to the previous day: Samsung Electronics -5.4%, SK hynix -8.5%, PSK -7.1%, Eugene Technology -9.1%, with share prices across semiconductor names declining.

• In 4Q, server DRAM prices are up about 30–40% QoQ. For some Chinese customers, contract prices have been agreed at levels 70% higher QoQ.

• Customers are betting on memory price increases even in 2026. Large customers are negotiating prices for six-month periods instead of on a quarterly basis. This reflects moves to lengthen the contract price application period in anticipation of price hikes every quarter.

• DRAM demand bit growth in 2026 is forecast at 24.6%, while the three DRAM players’ supply bit growth is only 21%; as such, ASPs are expected to continue rising through supply shortages during 2026.

• For NAND as well, the supply–demand ratio will remain below 100% throughout 2026, with supply shortages persisting.

• NAND has lower profitability than DRAM, and bit growth from node migrations is larger. As a result, NAND suppliers are expected to maintain a conservative investment stance on capacity expansion, concerned that the cycle could turn down if they add too much capacity.

• As of 4Q25, server DRAM operating margins will reach about 60–65%. For SK hynix, HBM operating margins are around 65–70%. Solid earnings are a factor that continues to ease valuation burdens.

• Memory capex is expected to increase, centered on DRAM. With growth in WFE, the earnings of materials, components, and equipment companies are expected to keep rising from 2H25 through 2026.

• In the second half of 2027, large-scale expansion investments such as Samsung Electronics’ P5 and SK hynix’s Yongin Y1 are scheduled. Front-end equipment companies’ earnings are expected to remain on an uptrend in 2027 following 2026.

• Investor sentiment is expected to recover starting with NVIDIA’s earnings on 11/19.

• We maintain Overweight and Buy recommendations on the semiconductor sector.


We maintain Overweight and Buy recommendations on the semiconductor sector. Fundamentals remain solid; we need to wait for the storm to pass

Korea semiconductor sector proxied by EWY ETF


TSMC gross margin expected to 'rise significantly'… TSMC's gross margin could reach the low-to-mid 60% range in the first half of 2026, exceeding current market expectations

Summary: Shares JPM thesis: TSMC N3 capacity extremely tight, hot-run premiums + 6-10% price hikes push gross margin to low-to-mid 60% in H1 2026, above consensus.

JPM: Production capacity extremely tight… customers place “urgent capacity expansion” orders; TSMC gross margin expected to “rise significantly”

In research published on November 10, J.P. Morgan pointed out that despite reports that Nvidia has asked TSMC to expand N3 capacity to 160,000 wafers per month (wfpm), TSMC’s actual capacity may only reach 140,000–145,000 wafers per month by the end of 2026. This means the shortage of the world’s most advanced chips will persist over the next two years.

This supply–demand imbalance foreshadows a dual impact. On the one hand, chipmakers that rely on leading-edge nodes may face growth bottlenecks; on the other, TSMC, which holds pricing power, could see its profitability improve markedly. J.P. Morgan believes supply tensions have already triggered “hot-runs,” which could push TSMC’s gross margin into the low-to-mid 60% range in the first half of 2026.

Production capacity “extremely tight”
Confronted with urgent customer demand, TSMC has not opted to build new N3 fabs. According to J.P. Morgan’s supply-chain checks, TSMC tends to prioritize its new fabs in Kaohsiung (Fab 22) and Hsinchu (Fab 20) for next-generation process nodes such as N2 and A16. Analyst Gokul Hariharan notes that TSMC’s strategy is to encourage customers to move to leading nodes more quickly rather than inject excessive new capacity late in N3’s lifecycle.

Accordingly, the main increment of N3 capacity in 2026 is expected to come from line conversions at the Tainan Fab 18. J.P. Morgan expects that as some accelerator demand shifts to N3, utilization of the N4 process will drop below 100% in the first half of 2026, at which point around 30,000 wafers per month of N4 lines could be converted into roughly 25,000 wafers per month of N3 lines.

However, there are variables to this conversion. If Nvidia is permitted to ship China-bound GPUs such as the B30A to China, N4 demand could tighten, slowing the pace of N4-to-N3 conversion.

Maximizing supply through multiple avenues
Beyond line conversions, TSMC is trying other ways to “squeeze out” more capacity.

The report states that through “cross-fab collaboration,” TSMC is using idle N6/N7 capacity at Fab 14 to handle parts of the back end of line (BEOL) for N3. J.P. Morgan judges that while this approach is not highly efficient, given that utilization at the N6/N7 nodes could remain at a low level of around 65% in 2026, there is room to add an extra 5,000–10,000 wafers per month in the second half of 2026.

Another is “overseas support.” The much-watched U.S. Arizona fab (Fab 21) is expected to begin tool move-in for its second phase in the second quarter of 2026, but it will not be until early 2027 that it can supply about 10,000 wafers per month of N3 chips, meaning it will not ease the supply tightness in 2026. In aggregate, J.P. Morgan estimates TSMC’s total N3 capacity at around 140,000–145,000 wafers per month by the end of 2026, still leaving a gap with the reported 160,000-wafer demand.

Customers’ “urgent expansion orders”
With capacity extremely tight, major tech companies have already moved preemptively and jumped into a “capacity grab.” The demand-side lineup is star-studded, encompassing virtually all Big Tech.

In high-performance computing (HPC), beyond Nvidia’s Rubin and Rubin CPX, there are in-house designed ASICs such as Broadcom’s TPU v7, Amazon’s Trainium 3, Meta’s Iris, and Microsoft’s Maia 300.

In consumer electronics, Apple’s C2 baseband chip and the iPhone 17, as well as Qualcomm’s and MediaTek’s Android flagship SoCs, are slated to move to N3 at scale. With capacity already pre-booked by major customers, the report specifies that demand from customers such as cryptocurrency miners in 2026 will be “essentially unable to be met.”

TSMC gross margin expected to “rise significantly”
The scarcity of capacity is feeding directly into TSMC’s profitability. According to J.P. Morgan’s supply-chain checks, as capacity becomes extremely tight, many customers are executing or planning “hot-runs” or “super hot-runs”—paying 50% to as much as 100% more per wafer in exchange for earlier delivery.

The report analyzes that although the total of such high-priced orders usually does not exceed 10% of total capacity, it is sufficient to have a clear positive impact on TSMC’s financial performance.

J.P. Morgan forecasts that if “hot-runs” persist and exchange rates remain stable, TSMC’s gross margin could reach the low-to-mid 60% range in the first half of 2026, exceeding current market expectations. In addition, TSMC’s plan to raise advanced-node pricing by 6%–10% starting in the first quarter of 2026 will further support its profit level.


Summary: Fabrinet gaining share in AWS Trainium3 accelerator modules at the expense of Taiwanese suppliers; bullish for FN into 2026.

Rumor:

According to reports from the supply chain, as $FN expands its market share in component supply, the share of Taiwanese companies in the accelerator module segment for AWS’s next-generation ASIC server, Trainium3 (T3), is expected to drop from 90% for the previous T2 generation to 60%.

This adjustment in supply allocation is projected to affect revenue growth in 2026.

#市場小作文 #RUMOR
轉傳
供應鏈傳出消息，因Fabrinet(FN US)擴大供貨市佔率，AWS下一代ASIC Server Trainium3 (T3)的加速器模組比重，台廠將由原有T2的90%降至60%，供貨比重修正將影響2026年營收成長率。
#零級分


Summary: SK Securities reiterates Overweight on Korean semis; PT KRW 170K Samsung, KRW 1M SK Hynix on prolonged DRAM supply shortage and structural memory supercycle.

SK Securities semiconductor comment:

Improvement in the supply shortage will be difficult even at the end of 2026
It will be difficult for the current memory supply shortage to improve significantly even by the end of 2026. DRAM demand in 2026 is forecast to grow by 20–25%, but we judge that production will find it difficult to outpace this. This implies that the current three-week inventory level of suppliers will remain at a similar level, or lower, by the end of 2026. DRAM investment in 2025 has been focused on conversions and HBM, and this is due to space constraints for new investments in 2026 and the impact of upward revisions to HBM demand (HBM3e 12H, 4 12H). The production contribution from Samsung Electronics’ P4 investment in 2026 will begin gradually from the second half of 2026, and SK hynix’s M15X, also focused on HBM, will begin contributing from mid-2026. For subsequent new fabs, we expect SK hynix’s Yongin fab to begin production in 2027 and Samsung Electronics’ P5 to start production in 2028. The prolongation of a supplier-favorable supercycle is the driving force that allows the industry to overcome the macro economy. This time is different.

Full-scale expansion of long-term supply contracts. Driving structural improvement in earnings stability for memory
The share of long-term supply contracts within the memory industry will begin to increase in earnest. The longer the supply shortage persists, the larger the potential magnitude of memory price hikes becomes, and such violent price increases act as a powerful incentive for long-term supply contracts. In addition, as the AI cycle shifts from scale-up to scale-out/across, memory demand expands structurally. Long-term supply contracts aimed at securing stable volumes will spread not only to HBM but also to server DRAM and other products. The resulting improvement in demand visibility will translate into a structural rise in earnings stability within the memory industry and provide justification for capacity expansions.

Going the distance
We maintain our Overweight view on the semiconductor sector. The intensifying benefit to AI-oriented memory and the synergy from supply shortages are only just in their early stages. The fundamental structural changes in the memory industry will continue to provide justification for valuation expansion. Although concerns remain about a correction following the steep share price rally, earnings that exceed expectations at both the top and bottom ends will validate the move. We maintain our target prices of KRW 170,000 for Samsung Electronics and KRW 1,000,000 for SK hynix.


We maintain our target prices of KRW 170,000 for Samsung Electronics


this price adjustment is expected to have a positive impact on TSMC's revenue and profit growth

Summary: TSMC's 2026 price hikes (3–10%) mark fourth consecutive year of increases; expected to positively impact revenue and profit growth.

• As production capacity for advanced process nodes continues to lag behind demand, TSMC has moved up its annual price negotiations. According to industry sources, TSMC began sequential discussions with customers in September regarding plans to raise prices for advanced process products in 2026. This move is aimed at reflecting higher production costs. However, the extent of the increase will vary depending on each customer’s purchasing volume and partnership status.

• According to previous forecasts from research institutions and securities firms, the unit price of advanced process products in 2026 is expected to rise by approximately 3% to 10%. While the degree of increase differs by process, it will generally be higher than this year’s level, marking TSMC’s fourth consecutive year of price hikes. Although the upward trend is clear, the overall rate of increase is relatively moderate, which will help maintain stable cooperation with clients. Nevertheless, this price adjustment is expected to have a positive impact on TSMC’s revenue and profit growth. (Taiwan Economic Daily)

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https://t.co/5PCaFb8ycO


I think it's fine to stay long until 2027

Summary: Stay long memory through 2027; China supply-flood risk overstated given domestic demand absorption and effective US sanctions.

Memory sector basket: Micron, SK Hynix, Samsung

@TShirtnJeans2 China is currently struggling just to meet its own domestic demand, and as I’ve discussed in my previous writings, I believe the U.S. sanctions are proving effective.

I think it’s fine to stay long until 2027.

@Jukanlosreve I'm just not confident in my ability to trade the memory cycle. If I'm lucky I can trade the first 3 innings, to use a baseball analogy, but I don't know what to do about the rest.

Plus this time, I'm very worried about China flooding the market if prices keep going up.


Summary: TSMC CoW order spillover to OSATs from 2026-2027; ASE, Amkor, and Powertech named as primary beneficiaries with meaningful revenue expected from 2H26.

ASE Technology Holding US ADR ticker ASX

TSMC to expand CoW Orders in 2H26 as OSAT CoWoS-like tech rises

As major US CSPs are ramping up ASIC development, the capacity gap in TSMC's CoWoS advanced packaging continues to widen. Thus, the rise of "CoWoS-like" capacity by OSAT providers has emerged. To address the strong demand for advanced packaging capacity from AI GPU and ASIC vendors, and as IC design houses increasingly introduce second suppliers to enhance supply chain resilience, TSMC is expected to begin expanding the release of Chip-on-Wafer (CoW) packaging process orders to OSAT providers starting in 2026-2027.

The main beneficiaries of TSMC's advanced packaging order releases include ASE and its subsidiary Silicon Precision Industries (SPIL), Amkor, and Powertech Technology, the three leading players in the industry. These orders are expected to further support OSAT operations, drive utilization rate recovery, and optimize product mix.

Tech gaps limit near-term revenue contribution
However, since most OSAT providers' CoWoS-like technologies still lack sufficient mastery of TSMC's CoW packaging process, there have previously been reports of suspended technology transfers in mass production yields. As a result, current progress remains at the small-volume shipment stage. Meaningful revenue contributions are not expected until the second half of 2026 at the earliest, which would then help ease supply tightness in the market.

It is estimated that by the end of 2026, TSMC's CoWoS monthly capacity will reach 125,000 wafers, representing annual growth of more than 70%. Meanwhile, the combined average monthly CoWoS-like capacity of ASE, SPIL, and Amkor is expected to reach around 40,000 wafers. This marks multiple-fold growth compared with 2024.

TSMC shifts focus to higher-value advanced packaging
Although TSMC will continue to dominate the global CoWoS advanced packaging market in terms of scale, it is expected to focus future expansion on the CoW segment of CoWoS-L, as well as new technologies such as WMCM, SoIC, and CoPoS. These efforts will concentrate on higher value-added orders to meet demand from customers, including Apple, AMD, Nvidia, and Broadcom.

Aside from on-substrate (oS) packaging and wafer testing (CP) orders that have already been increasingly outsourced to OSAT providers in 2025, lower-margin CoWoS-R and CoWoS-S processes are also expected to see a gradual expansion in outsourced packaging volumes. Orders for these two processes are expected to flow to ASE, SPIL, and Amkor.

ASE stated that its advanced packaging and testing revenue target of US$1.6 billion for 2025 is on track. Testing revenue growth is expected to be twice that of packaging, with demand from AI and HPC applications serving as the biggest growth drivers going forward. As customer order visibility continues to improve steadily, related revenue is projected to increase by another US$1 billion in 2026.

Utilization rates and revenue trends
With spillover CoWoS orders from TSMC, ASE Group has recently seen that advanced packaging, testing, and traditional packaging orders all remain robust. Consolidated revenue for November reached NT$58.82 billion (approx. US$1.9 billion), down 2.3% month-over-month but up 11.1% year-over-year, marking the second-highest level for the same period on record. Cumulative revenue for the first 11 months totaled NT$586.523 billion, representing year-on-year growth of 8.1%.

ASE stated that its capacity utilization for advanced packaging processes such as flip-chip and wafer bumping has already reached full load, while utilization for traditional wire-bond packaging lines was still gradually recovering. Overall, average utilization across the packaging business stands at the upper end of the 70–80% range.

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https://t.co/A7OaFXwkLU


Powertech Technology listed on TWSE as 6239.TW


Summary: Long TSMC: near-monopoly on sub-2nm, 2-3yr order visibility, AI demand accelerating, CoWoS tight, record profits with growth into 2026.

TSMC’s Hidden Strategy to Dominate Global AI — Why C.C. Wei’s Tone Has Changed

Another “spoiler” from TSMC’s earnings call.

In the third quarter of 2025, TSMC posted a net profit of NT$452.3 billion, hitting a new record and meeting expectations.
Cumulative profit for the first three quarters reached NT$1.21 trillion, already surpassing the NT$1.17 trillion achieved in all of 2024.
What caught attention was Chairman C.C. Wei’s noticeably different attitude.
Gone were the bold declarations of having “no competitors.”
For the first time, he described TSMC’s expansion plans as guided by “discipline.”
His tone—optimistic about AI but not exuberant—earned widespread approval.

Amid Surging AI Infrastructure Investment, TSMC Remains Cautious

While companies such as NVIDIA and OpenAI are making aggressive moves in AI infrastructure expansion,
TSMC has adopted a decidedly prudent and conservative stance.
Wei reiterated that the company maintains technological leadership in 2-nanometer and A16 processes,
and that nearly all major chipmakers are working with TSMC—giving it near-complete control over sub-2-nanometer orders.

CAPEX Upgrades as Expected — Even Stronger Order Visibility

TSMC continues to see strong long-term AI chip demand,
expects record-high revenue this year,
and anticipates continued growth momentum into 2026.
Wei delivered several notable remarks—most prominently, repeated mentions of “customers’ customers.”

This phrase was widely interpreted as a signal that TSMC now holds a deeper grasp of the entire AI ecosystem,
specifically referencing the escalating capital-spending competition among OpenAI, NVIDIA, Oracle, AMD, Broadcom, and Google,
as well as major cloud service providers (CSPs).

According to supply-chain insiders,
thanks to robust AI demand, full utilization rates, and favorable exchange rates,
TSMC’s Q3 and full-year results, upward CAPEX revision, and U.S.-dollar revenue growth were all within expectations.
The company’s discussion no longer centered on smartphone clients such as Apple, Qualcomm, and MediaTek—
instead, AI contributions took the spotlight.

Wei’s New Tone — “The AI Trend Is Extremely Positive”

Wei’s remarks were far more measured than in the past.
He stated:

“Recent AI developments are very positive.
The number of tokens processed by large language models (LLMs) is growing explosively,
showing that user adoption of AI models is rapidly expanding.
This translates into higher computing demand,
which in turn drives advanced semiconductor needs.”

He added that enterprise AI demand remains strong and that sovereign AI is rising globally.
Wei emphasized that TSMC’s clients maintain a solid outlook and that

“very strong signals are coming directly from our customers’ customers,
asking us to secure more capacity to support their business.”

Who Are the “Customers’ Customers”?

TSMC’s direct clients include Apple, NVIDIA, AMD, Qualcomm, and Bitmain.
But Wei’s “customers’ customers” refer to the end-users driving AI adoption.

Supply-chain analysts noted that TSMC already collaborates with major chipmakers such as NVIDIA and Broadcom.
Recent AI-related wafer starts include Google and Amazon’s Annapurna Labs.
The recently unfolding alliances—OpenAI with NVIDIA, Oracle, AMD, and Broadcom—
have sparked what the market calls an “AI perpetual-motion phenomenon,”
driving an unprecedented surge in AI compute capacity.
OpenAI and Oracle, in particular, are believed to be the “customers’ customers” Wei referred to—
making TSMC one of the biggest beneficiaries of this cycle.

Orders Placed 2–3 Years in Advance — Switching Foundries Is Nearly Impossible

Wei explained that to address structural long-term demand growth,
TSMC has established a highly rigorous and sophisticated capacity-planning system.
The company now collaborates not only with direct clients but also their end customers,
and as manufacturing processes grow more complex,
project lead time has extended—
today, engagements must start at least 2 to 3 years ahead.

This gives TSMC the deepest and broadest visibility in the entire industry.
Supply-chain sources noted that TSMC’s visibility now extends beyond NVIDIA and Broadcom
to OpenAI and leading CSPs, allowing the company to assess true market supply-demand conditions
and minimize the risk of overbooking.

Early collaboration also means chip firms must commit wafers early to secure capacity.
As a result, TSMC has near-complete control over long-term order flows—
shifting foundries has become extremely difficult.
For Samsung Electronics and Intel, this is clearly bad news.

Accelerating the U.S. Arizona Fab — Moving to Sub-2 nm

Regarding the Arizona plant,
Wei said TSMC is “speeding up construction” and for the first time confirmed
that it will upgrade to sub-2-nanometer process technology,
while also securing a larger land parcel.

According to the supply chain,
the previously 3-nanometer-focused second fab will now include 2-nanometer production,
meaning TSMC’s U.S. operations will enter the 2 nm era ahead of schedule.
With this acceleration and expansion,
TSMC’s goal for the U.S. fab to account for 30% of sub-2 nm capacity may be raised.
If so, the U.S. government’s ambition for a 50-50 capacity balance between Taiwan and the U.S.
could soon be realized.

Beyond AI: Other Markets Recovering Gradually

Wei also addressed concerns about non-AI markets and the geopolitical environment.
He said demand for smartphones and PCs has bottomed out and is slowly recovering,
with inventory levels “healthy.”
He emphasized that U.S. restrictions on Chinese AI chips have no impact on TSMC’s performance,
and forecast that the AI accelerator market’s CAGR for 2024–2029
will likely exceed the previous estimate of 44–46%.

CoWoS Capacity Remains Tight — Next Update in January 2026

Finally, on CoWoS advanced packaging, Wei reiterated that both front-end and back-end capacity
remain extremely tight.
TSMC is working to narrow the supply gap and boost output,
and Wei stated that a new capacity target will be announced in January 2026.

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https://t.co/8e9zuDX0QL


Summary: Shares/endorses Morgan Stanley upgrade of MU to Overweight, PT raised to $220 on faster-than-expected DRAM/NAND price recovery and EPS upward revision cycle.

Micron: Rating Upgraded from Equal-weight → Overweight, Price Target Raised from $160 → $220 (Morgan Stanley)

    • DRAM and NAND prices are improving faster than expected, with buyers increasing inventories amid concerns over supply shortages through CY26.
    • Concerns over HBM are easing, and the strength in the DRAM market is positively influencing HBM3e price negotiations.
    • There is a high likelihood of continued EPS upward revisions over the coming quarters.
    • While the current valuation appears stretched, Morgan Stanley is betting on short-term upside given the strong industry sentiment and confidence in ongoing supply tightness.

$MU


Summary: Memory supercycle tightening BT substrate supply; Kinsus and Nanya PCB are primary beneficiaries via surging orders and quarterly price hikes through Q1 2026; Nittobo expanding fiberglass capacity.

▶ Memory supercycle exposes T-Glass constraint, tightening BT substrate supply

• As the global memory industry enters a supercycle driven by structural supply shortages, the supply shortage of BT substrates for memory chips is intensifying.

• Taiwan IC substrate manufacturers Kinsus and Nanya PCB have secured urgent orders as customers seek to sign long-term supply agreements amid material shortages.

• This has significantly improved order outlooks from the second half of 2025 and has acted as a major driver behind the increase in Taiwan PCB production in Q3.

• According to the supply chain, shipments of ABF substrates for advanced AI packaging have been constrained by upstream shortages of T-Glass fiberglass fabric, and BT substrate lead times have been significantly extended due to material production capacity saturation.

• These supply pressures are expected to ease only in the second half of 2026, when memory customers’ urgent order requirements can be handled more smoothly.

• Currently, AI and memory customers view the situation as a short-term bottleneck caused by material shortages, and this is driving growth in long-term supply agreement signings to secure core ABF and BT substrate capacity.

• BT substrates are mainly used in consumer electronics and have remained in oversupply in recent years due to sluggish smartphone demand.

• However, the shortage of upstream T-Glass fiberglass and the surge in AI-related ABF substrate orders have accelerated BT substrate shortages.

• Supply chain analysis indicates that Japan’s leading fiberglass fabric manufacturer, Nittobo, has confirmed capacity expansion, and end customers are reviewing the introduction of alternative suppliers.

• BT substrate lead-time pressure is expected to begin easing in Q2 2026, and once new material production facilities are fully operational in 2027, they are expected to meet AI and memory customer demand.

• Taiwan IC substrate manufacturers have been raising BT substrate prices on a quarterly basis since the end of Q2, with increases of about 3–5% or 5–10% per quarter.

• Based on current order conditions, this price increase is expected to continue into Q1 2026, offsetting traditional off-season operating weakness resulting from declining consumer demand.

• Industry analysis shows that among Taiwan’s three major IC substrate manufacturers, Kinsus is the largest supplier of BT substrates for memory, accounting for 36% of related revenue.

• Nanya PCB follows, with BT substrates accounting for 30–35% of revenue, while Unimicron generates around 13% of its revenue from BT substrates but is focused on smartphones and game consoles, limiting its exposure to the memory market boom.

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https://t.co/4B7SnWHenn


Nanya PCB follows, with BT substrates accounting for 30–35% of revenue


Japan's leading fiberglass fabric manufacturer, Nittobo, has confirmed capacity expansion


Summary: Citi raises SK Hynix TP to ₩640K (from ₩480K) and FY26 OP estimate to ₩81.5T vs ₩55T consensus on AI inference memory demand surge.

251022_SK Hynix: Opening Another Upside Catalyst Watch - CITI

⸻

[Key Takeaways]

(1) FY26(F) operating profit estimate revised upward from ₩64.1T → ₩81.5T vs. ₩55.0T consensus
■ Target price raised from ₩480,000 → ₩640,000, applying FY26(F) P/B 2.8x target

(2) 4Q25(F) operating profit estimate revised upward from ₩12.2T → ₩15.0T vs. ₩12.5T consensus

(3) The revision reflects:
    1. a surge in tokenized data generated by AI Agents,
    2. worsening supply shortage in legacy products, and
    3. rapidly rising AI inference memory demand in China.

⸻

[Contents]

(1) We expect AI inference memory demand to surge not only in the U.S. but also in China.

(2) Chinese hyperscalers, in particular, are projected to make concentrated investments in AI inference infrastructure.

(3) Accordingly, we have raised our 4Q25(F) server DRAM and eSSD price forecasts versus previous estimates.

(4) Server DRAM [64GB DDR5 RDIMM] price forecast raised from $261 → $360.

(5) The upward revision for eSSD is due to the explosive increase in the amount of tokenized data generated from AI Agent operations.

(6) Reflecting these trends, we have raised SK hynix’s 4Q25(F) operating profit from ₩12.2T → ₩15.0T.

(7) FY26(F) DRAM ASP: YoY +37% vs. prior +25%
■ Driven by a sharp rise in AI inference memory demand in China and deepening legacy memory supply shortages.

(8) FY26(F) DRAM QoQ growth:
■ 1Q26(F): +10% vs. prior +3%
■ 2Q26(F): +7% vs. prior +8%
■ 3Q26(F): +3% vs. prior +5%
■ 4Q26(F): +1% vs. prior +2%

(9) FY26(F) NAND ASP: YoY +39% vs. prior +23%
■ 1Q26(F): +11% vs. prior +3%
■ 2Q26(F): +9% vs. prior +9%
■ 3Q26(F): +5% vs. prior +7%
■ 4Q26(F): +3% vs. prior +5%

(10) As a result, FY26(F) operating profit estimate is raised from ₩64.1T → ₩81.5T, and target price from ₩480,000 → ₩640,000, applying FY26(F) P/B 2.8x target.


Summary: Samsung Securities reiterates Overweight on memory semiconductor sector: dual profit engines, AI-driven structural demand, and rate cuts make this cycle different from prior ones.

Korea memory semicon basket: SK Hynix, Samsung Electronics

Why This Memory Semiconductor Cycle Is Different (Samsung Securities, Korea)

This memory cycle differs from previous ones in three key aspects.
First, there are two profit growth engines. Although demand and supply for AI-focused HBM and general DRAM are connected, they do not move in perfect synchrony. The recent rally has been driven by a mismatch between AI demand and general DRAM demand.
Second, the main demand source — AI infrastructure investment — is larger and more prolonged than in any prior cycle. It is the first time in 30 years, since the Internet infrastructure boom, that we have seen a trend of continuous growth for three consecutive years.
Third, memory demand is no longer correlated with the consumer economy. The prolonged weakness in smartphones and PCs repeatedly leads to underestimation of memory price hikes during this cycle.

Relentless Demand Outlook
So far, memory companies’ share prices have followed the typical pattern of rising profits alongside declining valuations. A rapid profit increase usually signals the approach of a cycle peak.
However, the current rally — where both profit upgrades and valuation re-rating are occurring simultaneously — evokes the early phase of a new cycle. This phenomenon seems driven by the emergence of massive, seemingly “out of nowhere” demand — sometimes worth $100 billion — whenever capital is available.
Traditionally, memory demand has been judged based on customers’ ROI. But in this cycle, demand is being dictated less by profitability and more by the preemptive competition and fundraising capacity of Silicon Valley’s mega-tech companies.

B2B Demand and Interest Rates
This kind of demand surge is not entirely new. Previous B2B infrastructure cycles have shown similar patterns — the Internet infrastructure boom in 1999 and Amazon’s data-center expansion in 2017 both seemed to have no visible end to demand.
Yet, those cycles were preceded by economic expansion and rising interest rates. This time is different: as the cycle enters its third year of growth, interest rates are falling. The conclusion is that memory companies should remain Overweight during this period of simultaneous earnings upgrades and rate cuts.

September Inflection Point Confirming Long-Term AI Growth
The key feature of the AI theme in September was the reinforcement of its long-term growth narrative. Until recently, investors had compared cloud providers’ AI investments for this year and next with projected AI revenue growth — repeatedly worrying about bubbles.
Now, however, Big Tech companies are publicly discussing multi-hundred-trillion-won data-center clusters and multi-year semiconductor procurement contracts.
Investor conviction in 5-year-plus structural growth for semiconductors is strengthening.


earnings estimates and target price raised… We raise our 12-month target price from $150 to $210

Summary: Shares Goldman Sachs raising AMD PT $150→$210 on OpenAI partnership; AVGO seen neutral-to-mildly positive from spending uplift.

Goldman Sachs) AMD: The strategic partnership with OpenAI is a strong long-term catalyst for AMD’s GPU business momentum; earnings estimates and target price raised

Our View and Potential Industry Impact
We view this announcement as a significant positive development for AMD’s competitive positioning in the accelerator market for both training and inference workloads. The expectation that AMD will participate in part of OpenAI’s training stack is encouraging, as it slightly undermines Nvidia’s (NVDA) dominant share in OpenAI’s training workloads to date. For Broadcom (AVGO), the impact is seen as neutral to mildly positive, considering the expected increase in spending levels and the potential boost to its networking business. Our assumptions for OpenAI’s contribution are detailed further in Exhibit 1. Based on our analysis, AMD’s contribution to OpenAI (via equity) could reach approximately $75 billion, while generating around $135 billion in revenue. Accordingly, we are revising our estimates and target price upward. The key assumptions used in our analysis are as follows:

1. We assume that for each gigawatt (GW) deployed, the same number of shares (i.e., 160 million shares per GW tranche) is issued evenly.

2. Out of the total 6 GW planned, we assume deployments of 0.25 / 1 / 1.25 / 1.5 / 2 GW from 2026 through 2030, respectively.

3. We also assume AMD’s stock price will be $225 in 2026, $300 in 2027, and will increase linearly to $600 by 2030. Under these assumptions, all else being equal, this equates to approximately $75 billion worth of AMD equity granted to OpenAI.

Based on industry benchmarks and our average selling price (ASP) assumptions, we estimate a revenue opportunity of $22.5 billion per GW for AMD.

Earnings Estimate Revisions
Reflecting the incremental contribution from the strategic partnership with OpenAI, we raise our 2026 and 2027 non-GAAP EPS (excluding stock-based compensation) estimates by 21% and 62%, respectively.

Investment Thesis, Target Price, and Risks
We believe this announcement strengthens AMD’s competitive position in the accelerator market, representing a net positive for the company. However, two key risks remain:

(1) High customer concentration, with OpenAI expected to account for over 40% of AMD’s total revenue in 2027 according to our estimates; and
(2) Uncertainty over OpenAI’s additional funding requirements, which, as previously discussed, could pose potential execution challenges and may lead to a discount being applied to this revenue stream. As confidence in the revenue flow and execution timeline for this contract improves over the next few quarters, our outlook could turn more constructive.

We raise our 12-month target price from $150 to $210, reflecting higher earnings estimates. This is based on increasing our normalized EPS estimate from $6.00 to $7.00 and raising the applied multiple from 25x to 30x, factoring in a higher mix of data center revenue.

Key Upside Risks:
(1) Stronger-than-expected demand for AMD GPUs,
(2) Better-than-expected share trends in server x86 architecture,
(3) Greater operating expense leverage.

Key Downside Risks:
(1) Weaker-than-expected demand for AMD GPUs,
(2) Sharper-than-expected share loss in the server CPU market.

$AMD


For Broadcom (AVGO), the impact is seen as neutral to mildly positive, considering the expected increase in spending levels and the potential boost to its networking business


Super boom continues… SK Hynix to aggressively invest in commodity DRAM as well

Summary: Bullish SK Hynix: 8x+ 1c DRAM capacity ramp next year, AI inference driving commodity DRAM super-cycle alongside HBM growth.

“Super boom continues”… SK Hynix to aggressively invest in commodity DRAM as well

SK Hynix will increase production capacity for its cutting-edge commodity DRAM — 6th-generation 10-nanometer (nm; 1 nm = one billionth of a meter) DRAM (1c DRAM) — by more than eightfold next year. The company judges that demand for state-of-the-art commodity DRAM with superior cost-effectiveness to high-bandwidth memory (HBM) is growing, as the center of gravity in artificial intelligence (AI) shifts from “training,” which requires high-performance memory, to “inference” (service). SK Hynix plans to ramp up production of GDDR7, its latest graphics DRAM based on 1c DRAM, and SOCAMM2, a low-power DRAM module, in order to respond to orders from big tech companies such as Nvidia.

◇ 140,000-wafer 1c DRAM conversion investment next year
According to the semiconductor industry on the 20th, SK Hynix will, through process conversion, add production capacity for 1c DRAM equivalent to 140,000 additional 300 mm (approximately 12-inch) wafers per month at its Icheon campus in Gyeonggi Province next year. An industry official said, “The 140,000-wafer figure is the minimum increase,” adding, “I understand SK Hynix is also reviewing plans to boost it by 160,000–170,000 wafers per month.”

SK Hynix first plans to secure around 20,000 wafers per month of 1c DRAM production capacity by the end of this year. From next year, it will accelerate process conversion and aims to allocate an additional 140,000–170,000 wafers per month to 1c DRAM production by year-end. If this goes as planned, SK Hynix’s 1c DRAM production capacity will expand from 20,000 wafers per month at the end of this year to 160,000–190,000 wafers per month next year. Considering that SK Hynix currently processes around 500,000 DRAM wafers per month on average, this means it will devote more than 32% of its total DRAM production capacity to state-of-the-art 1c DRAM.

At the same time, the company will also expand production of 10 nm 5th-generation DRAM (1b DRAM), which is used in 6th-generation HBM (HBM4) that it will begin supplying in earnest to Nvidia next year. It will install a 1b DRAM line capable of processing 60,000 wafers per month in its new “M15X” fab, which opens at its Cheongju campus in North Chungcheong Province at the end of this year. Given SK Hynix’s aggressive DRAM investment pace, the industry expects its capital expenditures, projected at around 25 trillion won this year, to easily exceed 30 trillion won next year.

◇ Riding the “AI memory super-cycle”
SK Hynix’s 1c DRAM is used not in HBM, but to manufacture the latest commodity DRAM products such as double data rate 5 (DDR5), low-power DRAM (LPDDR), and GDDR7. The company has raised the yield (the ratio of good chips among total output) of 1c DRAM to above 80%, but it has focused its production capabilities on HBM, judging that demand growth for HBM outstrips that for commodity DRAM.

The reason SK Hynix is now turning its attention back to commodity DRAM is its assessment that the landscape of the AI memory industry is changing. As AI models, once concentrated on training, expand into inference, the company expects demand for commodity DRAM to grow as much as for HBM. In AI inference, cutting-edge commodity DRAM, which offers higher power efficiency and lower cost than HBM, is mainly used.

Nvidia’s recently introduced AI accelerator “Rubin CPX” is a case in point. This AI accelerator uses GDDR next to the processor instead of HBM. Big tech companies such as Google, OpenAI, and Amazon Web Services (AWS), which are developing their own AI chips, are also working on custom AI accelerators that are loaded with large quantities of commodity DRAM.

1c DRAM is also used in the SOCAMM2 memory modules that SK Hynix supplies to Nvidia. SOCAMM is a memory module standard for AI servers and PCs led by Nvidia, and while its bandwidth is lower than that of HBM, it has the advantage of higher power efficiency. Nvidia plans to place SOCAMM2 next to “Vera,” its self-developed central processing unit (CPU). If things go according to plan, the industry expects SK Hynix to secure a certain portion of this demand.

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https://t.co/ArGQG8IUxg


Summary: Long Samsung Foundry: TSMC front-end bottleneck + price dissatisfaction driving fabless clients to adopt Samsung front-end + Intel packaging model over 1–2 years.

Samsung Foundry is a division of Samsung Electronics, 005930.KS

A few days ago at work, someone asked me what everyone is ignoring right now but will end up realizing is important next year.

Without even thinking, I immediately answered: Samsung Foundry.

Here’s why.

First, not only TSMC’s back-end (i.e., CoWoS), but also its front-end is becoming a severe bottleneck.

In other words, a scenario where CoWoS is simply substituted with Intel packaging—i.e., front-end at TSMC and back-end at Intel—is, for now, very difficult to execute. The front-end itself is the bottleneck, so there simply aren’t enough chips to package on Intel’s EMIB in the first place.

So I recently did some supply-chain checks, and it seems like a number of fabless companies are increasingly dissatisfied with TSMC. They’re saying the PPA improvement is not that large, yet the magnitude of the price increases is far too big.

Because of this, I expect a model to emerge over the next year to two years where Samsung Foundry wins the front-end business, and Intel handles the packaging on the back-end.

Tesla has already decided to do exactly that: front-end at Samsung Foundry, and packaging at Intel IFS. It’s the project that tightly integrates AI6 into a single Dojo system.

Now that Tesla has made the first move, I think Nvidia and AMD may be difficult, but within the ASIC camp, I expect there will gradually be more players that adopt the “Samsung front-end + Intel back-end” model.


Morgan Stanley maintains its 2026 earnings growth forecast at +10% (higher than the market's +7.2%), believing that as concerns over RPO and DRAM exposure fade, market expectations will converge toward Morgan Stanley's view

Summary: Shares Morgan Stanley Buy-equivalent view on KLAC: 2026 EPS +10% above consensus +7.2%, RPO/DRAM concerns to ease, structural demand robust.

KLA 2026 Outlook Remains Solid; RPO and DRAM Concerns Expected to Ease
Morgan Stanley (J. Moore, Oct 16, 2025)

Morgan Stanley expects KLA’s December-quarter revenue to remain flat quarter-on-quarter at around $3.2 billion, slightly above the market consensus of $3.16 billion, and in line with buy-side expectations. The firm maintains its 2026 earnings growth forecast at +10% (higher than the market’s +7.2%), believing that as concerns over RPO (Remaining Performance Obligations) and DRAM exposure fade, market expectations will converge toward Morgan Stanley’s view.

Addressing the market’s three main concerns, the firm notes:

1. RPO decline impact is limited — Current RPO covers 78% of the next 12 months’ shipments. Only if the book-to-bill ratio (BB) remains below 1 for the next four quarters would it pose a risk for 2027.

2. DRAM inspection intensity rising — New DRAM capacity additions will drive higher inspection intensity. Morgan Stanley expects DRAM-related revenue to grow 15% YoY in 2026, roughly matching the overall DRAM WFE growth of +18%.

3. Advanced packaging momentum — Driven by higher sampling rates for CoWoS and HBM, advanced packaging revenue is projected to reach $925 million in 2025.

Overall, Morgan Stanley forecasts KLA’s system shipments to grow by about 9.4% in 2026, slightly below the global WFE growth of 10%, but notes that structural demand remains robust, implying further upward revisions in market expectations.

$KLAC


Goldman Sachs reiterated its "Buy" ratings on Alibaba and Tencent

Summary: Shares Goldman Buy reiterations on Alibaba and Tencent; valuations still attractive vs global peers, AI capex/inference demand drive revenue growth.

Goldman Sachs sharply raises Alibaba’s capital expenditure outlook to RMB 460 billion(USD 64.5 billion): Explosive growth in inference demand, AI efficiency improvements drive stronger revenue

Goldman Sachs believes that explosive demand growth will continue to push up capital expenditures (Capex) for cloud service providers. The strategic paths of China’s internet giants in AI are increasingly diverging: Alibaba, leveraging its full-stack capabilities, is betting on the enterprise-oriented (b2b) AI cloud market, while ByteDance is going all-in on consumer-facing (b2c) applications.

In a report on the 23rd, Goldman Sachs raised its capex forecasts for China’s leading cloud companies, estimating that Alibaba’s cumulative capital expenditures for fiscal years 2026–2028 will reach RMB 460 billion(USD 64.5 billion), far exceeding the company’s previous target of RMB 380 billion. The core logic supporting this view is the surge in AI inference demand, and higher compute efficiency could actually increase the conversion rate of capex into cloud revenue, thereby accelerating revenue growth.

At the same time, the strategic differences among the big tech companies are becoming more pronounced. Goldman Sachs pointed out that Alibaba holds a leading position in external AI cloud revenue scale and enterprise-oriented (b2b) services, with a clearer commercialization path. In contrast, ByteDance, led by its chatbot “Doubao (豆包),” holds the largest share in the b2c space and in average daily token consumption, demonstrating its commitment to exploring consumer-oriented AI applications.

The report views the current valuations of major Chinese tech stocks as still attractive. The market has not yet entered an AI bubble, and the valuations of Tencent and Alibaba remain at a discount relative to their earnings growth outlooks and to global peers (such as Google and Amazon). Based on this, Goldman Sachs reiterated its “Buy” ratings on Alibaba and Tencent.

Even with AI efficiency improvements, it is hard to curb capex expansion
Recently, Chinese companies have achieved multiple breakthroughs in AI infrastructure and compute efficiency. For example, Alibaba Cloud announced a new GPU pooling system, “Aegaeon,” which it claims can save 82% of GPU resources; DeepSeek’s new OCR model can reduce token consumption for text input by up to 90%.

However, Goldman Sachs believes these efficiency gains do not imply a corresponding reduction in capex. According to data cited in the report, AI inference demand and token consumption are growing exponentially. ByteDance recently announced that its average daily token consumption surpassed 30 trillion in September, doubling from April–May, a level approaching Google’s 43 trillion. Alibaba also revealed at the Yunqi Conference (Cloud Conference) that its AI inference demand doubles every 23 months.

Goldman Sachs forecasts that Chinese cloud service providers’ (CSPs) capital expenditures in the third quarter of 2025 will increase by 50% year-on-year. The strong inference demand is the key driver of continued investment by cloud vendors, and improvements in technical efficiency help convert these investments more effectively into revenue growth, forming a positive cycle.

Diverging paths of the giants: Alibaba b2b, ByteDance b2c
Goldman Sachs’ report clearly outlines the different strategic layouts of China’s two tech giants in the AI field.

Alibaba is focusing on the enterprise AI market and, leveraging its “unique full-stack AI capabilities,” occupies a leading position in external AI cloud revenue. On October 23, Alibaba officially launched the new Quark AI chatbot assistant service, which uses its most advanced closed-source Tongyi Qianwen (Qwen) model to compete directly with ByteDance’s “Doubao” and Tencent’s “Yuanbao.” In addition, Quark’s “Zaodian” application has also made progress in multimodal video and image editing functions based on the closed-source video model Wan2.5.

By contrast, ByteDance is more focused on exploring consumer-oriented AI applications. Its “Doubao” chatbot has secured a leadership position in China’s b2c market and in average daily token consumption. ByteDance is accelerating the commercialization of “Doubao,” for example by seamlessly integrating Douyin e-commerce services into chats to allow users to complete transactions directly within the app, and by adding new features such as an AI keyboard.

Multimodality and commercialization accelerate
The report points out that China’s multimodal large models are making progress in global markets and are forming differentiated competitive advantages through strategies such as open-source, low prices, and high speed. For example, Tencent’s “Hunyuan Image 3.0 (混元图像3.0)” model ranks among the top on LMArena’s text-to-image model leaderboard. In terms of pricing, the report cites comparison data showing that Alibaba’s Qwen3 Max model’s output price is 40% cheaper than GPT-5/Gemini 2.5 Pro.

Global adoption of Chinese AI models is also increasing. The report cites a statement by Airbnb’s CEO that the company is making extensive use of Alibaba’s Qwen model to support its customer service agents, highlighting that Chinese open-source AI models are gaining recognition in global markets.

In terms of commercialization, China’s b2c applications are following the path of ChatGPT. In addition to ByteDance’s rapid integration of e-commerce features into “Doubao,” Alibaba’s Quark has launched a one-stop AI image and video creation platform, “Zaodian.” Goldman Sachs believes that the commercialization path of China’s b2c chatbots is still evolving and may ultimately be more driven by advertising revenue.

From a valuation perspective, Goldman Sachs judges that an AI bubble has not yet formed, and its U.S. strategists expect the U.S. AI capex boom to continue until 2026. According to the report, Tencent and Alibaba’s expected 2026 P/E ratios (GAAP) are 21x and 23x, respectively, which remain “not demanding” compared with Google’s 24x and Amazon’s and Microsoft’s 28–30x.

$BABA


Tencent Holdings listed on HKEX as 0700.HK

industry='Internet Content & Information'


We view this announcement as a positive catalyst for Broadcom, reaffirming the company's technological leadership in the ASIC domain. a 1GW-scale AI data center buildout could contribute an estimated $10–15 billion in additional revenue and $0.96–1.44 EPS upside potential

Summary: Goldman endorses AVGO as beneficiary of OpenAI partnership; $10–15B revenue and $0.96–1.44 EPS upside from 1GW-scale AI data center buildout.

structural marker; pre-classified as canonical yfinance ticker

251014_Broadcom: Partnership with OpenAI reinforces Broadcom’s technology advantage in custom silicon - Goldman Sachs

(1) This collaboration includes the joint development of Scale-up and Scale-out network systems utilizing Broadcom’s AI accelerators and Ethernet solutions.

(2) Deployment is expected to begin in 2H26 and be completed by the end of 2029.

(3) We view this announcement as a positive catalyst for Broadcom, reaffirming the company’s technological leadership in the ASIC domain.

(4) While it has not been disclosed whether this agreement involves any equity investment or financing, we believe it strengthens Broadcom’s technological positioning versus competitors.

(5) This can be compared to AMD’s recent announcement of a partnership with OpenAI for a 6GW-scale deployment, which included an equity investment.

(6) For Broadcom, a 1GW-scale AI data center buildout could contribute an estimated $10–15 billion in additional revenue and $0.96–1.44 EPS upside potential.

$AVGO


Summary: Shares Goldman HBM report: SK Hynix dominant at 55% share, Samsung reclaiming 35%; both benefit from 20-30% YoY HBM revenue growth despite price decline.

Insights from Goldman Sachs’ latest memory report:

Currently, Samsung’s HBM3E price is 5% lower than SK hynix’s, but Samsung may further cut HBM3E prices to regain market share.

HBM pricing trend: HBM3E prices are expected to decline 28% YoY in 2026 (from $15/GB to $10/GB) under competitive pressure, but HBM4’s premium (about 40% above HBM3E) and shipment growth will partially offset the price decline, so leading vendors’ HBM revenue will still rise 20–30% YoY.

SK hynix, leveraging its technology lead, will reach a 55% HBM market share in 2025, and plans to expand monthly HBM capacity from 145,000 wafers to 195,000 wafers in 2026.

Samsung is aiming to reclaim a 35% market share, supported by HBM3E capacity expansion (to 160,000 wafers/month in 2026).


leading vendors' HBM revenue will still rise 20–30% YoY


Summary: General-purpose DRAM faces persistent supply shortages in 2026 as all incremental Samsung/Hynix capacity goes to HBM; bullish on DRAM pricing/suppliers.

General-purpose DRAM basket: Micron, SK Hynix, Samsung, Nanya

This is a highly important point.

Samsung Electronics and SK Hynix’s total DRAM capacity in 2026 is expected to increase only slightly (+single-digit).
However, all of that incremental capacity will go toward HBM, while general DRAM capacity will actually decline.

In other words, general-purpose DRAM will continue to suffer from persistent supply shortages.


Micron will supply less than 10% of the volume, falling behind SK Hynix and Samsung... Micron failed to secure an advantage in volume discussions as it struggled to enhance performance

Summary: HBM4 share: SK Hynix ~70%, Samsung >30%, Micron <10% — bullish Hynix/Samsung, bearish Micron on next-gen HBM supply split.

"NVIDIA Supply Talks in Final Stages"... Samsung to Supply More HBM4 to NVIDIA than Micron

It has been reported that Samsung Electronics' negotiations with NVIDIA regarding the supply of next year's 6th generation High Bandwidth Memory (HBM4) have reached the final stages. Following SK Hynix’s announcement that its HBM4 volume for next year is "sold out," it appears that Samsung Electronics will supply the second-largest amount of HBM4, trailing only SK Hynix. Although Samsung suffered a blow to its reputation this year by only supplying a small quantity of 5th generation HBM (HBM3E) to NVIDIA, the company seems to be setting out to restore its pride starting with HBM4.

According to industry sources on the 15th, it is reported that Samsung Electronics will supply over 30% of the HBM4 volume NVIDIA has requested from the memory semiconductor industry for next year. It is known that Samsung is currently finalizing quality certification by mounting its HBM4 samples on the 'Rubin Platform,' the next-generation AI accelerator NVIDIA plans to release to the market next year.

An official familiar with Samsung Electronics' situation stated, "Unlike in the HBM3E market, Samsung Electronics' share within NVIDIA's supply chain for HBM4 is expected to exceed 30%," adding, "It appears they will supply a larger volume than Micron while meeting the performance requirements demanded by NVIDIA."

Until now, Samsung Electronics has faced difficulties in supplying HBM to NVIDIA. While competitors SK Hynix and Micron stably supplied 8-layer and 12-layer HBM3E products, Samsung suffered the humiliation of failing quality certification multiple times. To recover competitiveness in the HBM4 market, Samsung has made a strategic move by utilizing its internal foundry (contract manufacturing) 4nm process and incorporating DRAM that is one generation ahead of its competitors. Samsung is also pushing to expand HBM4 production capacity at its Pyeongtaek Campus to respond to HBM4 demand.

SK Hynix is forecasted to solidify its status as the top supplier by providing close to 70% of the total HBM4 volume requested by NVIDIA next year. It has been confirmed that SK Hynix agreed to supply the maximum amount of HBM4 volume it can handle within its scheduled production capacity for next year. SK Hynix is also maximizing its production capacity to meet HBM demand. A semiconductor industry official noted, "The contract has been finalized for SK Hynix to supply the maximum volume the company can handle out of the HBM4 quantity requested by NVIDIA," adding, "Additional discussions may proceed once plans for capacity expansion become visible."

It is reported that Micron will supply less than 10% of the volume, falling behind SK Hynix and Samsung. It is known that negotiations were somewhat delayed as Micron experienced technical issues, leading to a partial redesign of its HBM4. Although Micron supplied Customer Samples (CS) that met the HBM4 product standards requested by NVIDIA, it was identified that they showed inferior performance compared to competitors.

Unlike SK Hynix and Samsung, Micron utilizes its own DRAM process rather than a foundry process for the logic die, which acts as the brain of the HBM. While SK Hynix and Samsung entered supply negotiations meeting the product performance requested by NVIDIA by utilizing advanced foundry processes, it is analyzed that Micron failed to secure an advantage in volume discussions as it struggled to enhance performance.

$MU

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https://t.co/8mM2d5Y3lt


SK Hynix is forecasted to solidify its status as the top supplier by providing close to 70% of the total HBM4 volume requested by NVIDIA next year


Samsung Electronics will supply over 30% of the HBM4 volume NVIDIA has requested from the memory semiconductor industry for next year


we remain positive on Delta, and we expect the company's server power-supply business revenues to post a CAGR of 42% in 2025–2027, with room for further upside

Summary: JPM bullish on Delta (power/cooling CAGR 42%/36%) and Jentech (sole supplier of lids for both Rubin GPU variants, ASP up 2-9x) into 2026-2028 AI server ramp.

Outlook for Power, Liquid Cooling, and ODMs in Nvidia Racks – JPM

2025 order backlog + 2026 AI capital expenditure increase = strong AI server shipments next year

We estimate that this year the demand and shipments for NVL72 cabinets will be around 38,000 units and 27,000 units, respectively, which implies an order backlog of about 10,000–11,000 units. According to the initial capex outlook, demand for NVL72 cabinets next year will reach 50,000–60,000 units, most of which will be based on GB300. Taking into account the backlog at the end of 2025, we estimate that the number of cabinets assembled by ODMs in 2026 will be in the range of 50,000–70,000 units along the yield-improvement curve. Growth that is close to a doubling year over year implies that revenues for AI server ODMs and downstream component suppliers will all show strong growth next year.

GB300/VR200 schedule and spec update

We believe the mass-production ramp of GB300 servers is somewhat behind our original expectations, and we expect to see a more meaningful ramp in 1Q26. Even so, Nvidia is still maintaining its plan to start volume production of VR200 modules in 2Q26 and to begin downstream AI ODM cabinet production in early 3Q26. However, since detailed specifications are still under discussion, there is a possibility of some schedule slippage, and we expect full-scale shipments of VR200 systems to begin from 4Q26.

The key spec changes for VR200 are as follows. The CPU LPDDR modules adopt an SOCAMM design, and a midplane structure is introduced to replace the current flying-cable-based PCIe interconnect. The TDP of the Rubin chip increases from 1.4 kW for Blackwell Ultra to 1.8/2.3 kW, and as a result, the power consumption of the NVL72 system rises from 140 kW to 220–250 kW. Two cooling solutions are offered: a combination of microchannel cold plate (MCP or MCCP) plus a gold-plated lid for the 1.8 kW Rubin GPU, and a microchannel lid (MCL) configuration for the 2.3 kW Rubin GPU. The rated capacity of the power shelf increases from 33 kW for GB200/300 to 110 kW, the NIC-to-GPU ratio doubles from 1:1 to 2:1, and NIC specs are upgraded from 400G to 800G. In addition, the level of standardization for the compute tray – including the Bianca board, midplane, HMC modules, and so on – is further enhanced.

Optional manufacturing partners for the VR200 compute tray

At the GB200/300 stage, CSP customers could, with the support of the ODM assigned to them, highly customize most parts of the compute tray other than the Bianca board. According to our research, at the VR200 stage Nvidia is attempting to improve manufacturing yield and reduce lead time by providing a standardized reference for the L10 compute tray. Foxconn (Hon Hai), Wistron, and Quanta are highly likely to become Nvidia’s manufacturing partners, and CSPs will co-design the remaining components of the compute tray together with their designated ODM. We believe CSPs are still taking a conservative stance toward this proposal and that no final decision has yet been made. If Nvidia aggressively pushes standardized L10 trays, competition in the NVL72 L10 server ODM market will become more concentrated and could trigger share shifts from server brands to server ODMs.

Exponential increase in AI server power consumption favors power-supply vendors

We expect the installed power capacity of global data centers to increase from 117 GW in 2025 to 242 GW in 2028, implying a CAGR of 27% over this period. The strong growth in power demand is mainly driven by the expansion of AI demand and the rapid rise in AI chip TDP. At the same time, deeper vertical integration of components will lead the server power supply unit (PSU) market to record a CAGR of 64% over the same period. We therefore remain positive on Delta, and we expect the company’s server power-supply business revenues to post a CAGR of 42% in 2025–2027, with room for further upside. The rising share of high-margin AI server business also implies stronger growth momentum on the profitability side.

Opportunities created for PSU vendors by the new data-center power architecture

The power-supply and power-infrastructure markets have historically been separate domains, but we believe that in future AI data-center power designs, opportunities for convergence between the two areas will increase significantly. CSPs tend to prefer more simplified power architectures in order to reduce power-conversion losses. For example, solid-state transformers (SSTs) integrate AC/DC conversion and medium-voltage step-down functions into a single piece of equipment, while high-voltage DC/DC conversion modules integrate the existing power shelf into a single onboard module. We believe Delta, with its leading position in power technologies and its complete product lineup that spans “from grid to chip,” will be the biggest beneficiary as the market expands.

Adoption of immersion/liquid cooling for AI chips drives high growth in the Sidecar/CDU market

We expect the Sidecar/CDU market to grow from around USD 6 billion in 2025 to around USD 21 billion in 2028, implying a CAGR of 54% over this period. The growth drivers are the continued increase in AI server power consumption and the widespread adoption of liquid cooling technologies. According to our research, not only Nvidia’s NVL72 servers but also AMD’s GPUs and ASICs have already exceeded 1 kW in AI chip TDP, and thus are expected to start transitioning to liquid-cooling systems from next year. Delta is the leading supplier of customized Sidecar/CDUs for major US CSPs (e.g., Microsoft and Meta) and is also continuing to expand to new customers such as Amazon and Google. We expect Delta’s liquid-cooling-system business to post a CAGR of 36% in 2025–2027.

Dual-cooling design for Rubin GPUs: a trade-off between on-time delivery and rising TDP

We still believe that the chip designer will provide cooling solutions that allow two TDP versions of Rubin GPUs – 1.8 kW and 2.3 kW – to coexist. In the early phase of VR200 (3Q26), we expect the 1.8 kW Rubin using a microchannel cold plate plus gold-plated lid (MCP + gold-plated lid) to be the mainstream configuration. This solution is structurally very similar to the GB series, with only the cold plate, lid, and TIM (thermal interface material) upgraded. Once the MCL-related supply chain enters a mature stage from 4Q26 onward, the center of gravity in supply will gradually converge toward the higher-spec 2.3 kW version. Notably, we estimate that the two Rubin GPU versions are in fact likely to use the same physical chip, with different TDPs achieved through firmware and hardware settings.

Potential adoption of a consignment model by Nvidia for VR200 (1.8 kW Rubin) MCPs, intensifying cold-plate competition

At the VR200 (1.8 kW Rubin) stage, Nvidia appears to be considering sourcing microchannel cold plates (MCPs) under a consignment model. This implies that there will be a small number of qualified suppliers (Group A) of MCPs going forward, and that their direct customer will no longer be the CSPs or enterprise customers but Nvidia itself. In the future, Nvidia will bundle its Bianca mainboard together with the MCP and sell them to end customers as a package. As a result, competition among major cold-plate suppliers is expected to become even more intense, since MCPs will no longer be customizable for individual customers and all vendors will have to actively compete to obtain Nvidia certification. This could affect both the ASP of MCPs and the allocation of volumes.

Among the potential Group A MCP suppliers for VR200, we still see AVC and Cooler Master as the most likely to receive Nvidia certification, and we also believe that Jentech, which has strong microchannel-machining capabilities, is very likely to be included as a candidate. It is understood that the company has already been supplying microchannel-version cold plates to US customers for more than a year.

Jentech, the lid (heat-spreader) supplier, as the biggest beneficiary: gold-plated lid for 1.8 kW Rubin, MCL for 2.3 kW Rubin

Regardless of which Rubin GPU version is used, the lid (heat-spreader) structure will be significantly upgraded, and as a result the ASP will rise sharply. For the 1.8 kW Rubin, gold plating is required on the lid surface, which demands much higher machining precision, and we believe the ASP will be at least twice that of the existing lid solution used for Blackwell. In contrast, for the high-end 2.3 kW Rubin that transitions to MCL, we expect the ASP to increase by about nine times. We see Jentech as the main beneficiary of both Rubin solutions and believe it will establish itself as the sole supplier of gold-plated lids and the current MCL version.


Summary: Shares HSBC Buy on NVDA with PT $320; CoWoS allocation +140% to 700K wafers, FY2027 DC revenue $351B vs $258B consensus, plus $251–400B Stargate revenue opportunity.

HSBC: NVIDIA Target Price Raised Sharply to $320

Frank Lee, Global Head of Technology, Hardware, and Semiconductor Research at HSBC, analyzed as follows in the report:

1. Significant increase in TSMC’s CoWoS advanced packaging capacity allocation —
NVIDIA’s fiscal 2027 CoWoS wafer allocation has increased from 480,000 to 700,000 units, a 140% rise.

2. Circular (“closed-loop”) transaction structure with OpenAI and the “Stargate” project —
Through this, NVIDIA is estimated to gain a GPU revenue opportunity worth between $251 billion and $400 billion.

⸻

■ 140% Surge in TSMC CoWoS Allocation: A Strong Signal from the Supply Chain

According to HSBC Research, CoWoS capacity allocation, which had shown some adjustment up to the first half of 2025, was sharply revised upward starting in fiscal 2027 (beginning October).
In this update, HSBC raised NVIDIA’s 2027 CoWoS wafer allocation from 480,000 to 700,000 units (+140% YoY).
This is interpreted as the first sign of a renewed capacity expansion momentum since Q4 2025.

This expansion means more than just increased supply. HSBC emphasized:

“The capacity increase implies that NVIDIA’s data center revenue could reach $351 billion in FY2027, which is 36% higher than the market consensus of $258 billion.
It also reaffirms that the AI GPU TAM (Total Addressable Market) is expanding beyond traditional CSP (Cloud Service Provider) CapEx dependence.”

HSBC also noted that under an optimistic scenario, capacity could expand further to 800,000 wafers, leading to $390 billion in revenue and $9.68 EPS, representing an additional 11% upside from the base case.

Furthermore, HSBC stated that “historically, CoWoS capacity expansion has served as a leading indicator for NVIDIA’s earnings upgrades.”
Just as the consecutive capacity expansions in 2023 and 2024 led to unprecedented profit surges, the latest increase signals the start of a new growth cycle.

⸻

■ Explosive Scale of the OpenAI “Closed-Loop Transaction Structure”

The report also highlighted the triangular structure among NVIDIA, OpenAI, and Oracle:
    • NVIDIA invests up to $100 billion in OpenAI.
    • OpenAI signs a $300 billion, 5-year “Stargate” project contract with Oracle.
    • Oracle uses those funds to purchase NVIDIA GPUs in bulk.

This structure functions as a “closed-loop transaction”, where the funds cycle back into NVIDIA’s revenue stream.

Based on internal modeling, HSBC estimated that the 18.3 GW GPU deployment plan for OpenAI’s Stargate project alone would provide NVIDIA with a $251–400 billion revenue opportunity — roughly double the market’s current 2027 earnings forecast.
    • If entirely using Blackwell B300 chips (1,820W each):
→ ~10 million chips needed × $40,000 = $400 billion total revenue
    • If entirely using Rubin chips (2,340W each):
→ ~8 million chips needed × $42,000 = $336 billion total revenue
    • If entirely using Rubin Ultra chips (4,176W each):
→ ~4.4 million chips needed × $57,000 = $251 billion total revenue

$NVDA


140% Surge in TSMC CoWoS Allocation: A Strong Signal from the Supply Chain


SK Securities just raised its target price for SK Hynix to 1 million won… They're basically saying there's a 78.9% upside potential

Summary: Shares SK Securities PT raise on SK Hynix to ₩1M, implying 78.9% upside; author adopts the bullish stance by sharing it.

Crazy lol

Korea’s SK Securities just raised its target price for SK Hynix to 1 million won…

They’re basically saying there’s a 78.9% upside potential. https://t.co/aoUSxDwcpR