Core Insights - Nvidia is the leader in the AI accelerator market, which is projected to grow at a CAGR of 29% through 2030, indicating continued strong performance for Nvidia [1] - With a market cap of $4.6 trillion, achieving significant stock price growth becomes increasingly challenging, prompting investors to consider smaller companies with higher growth potential [2] Company Analysis Micron Technology - Micron develops high-bandwidth memory (HBM), which is in high demand due to the AI data center boom, positioning it favorably in the market [3] - In Q1 of fiscal 2026, Micron reported revenue of $13.6 billion, a 57% increase year-over-year, with net income reaching $5.2 billion compared to $1.9 billion in the same quarter last year [4] - The stock price has risen by 250% over the past year, leading to a market cap of over $340 billion, with a P/E ratio of 34, slightly above the S&P 500 average [6] Advanced Micro Devices (AMD) - AMD is well-positioned to compete with Nvidia, with a market cap around $380 billion and plans to release the MI450 AI accelerator, which may outperform Nvidia's offerings [7][8] - In Q3 of 2025, AMD's revenue was $9.2 billion, reflecting a 36% year-over-year growth, with net income of $1.2 billion and a profit growth rate of 61% [9] - Despite a P/E ratio of 115, AMD's forward P/E of 35 suggests potential for rapid profit growth, making it an attractive investment opportunity [11]

Group 1 - The core viewpoint is that TD Cowen has raised the target price for Micron Technology from $300 to $450 [1]

Core Viewpoint - Micron Technology is positioned as a key player in the memory chip market, with significant demand expected to drive growth, making it an attractive investment opportunity despite its current low valuation [2][8]. Company Overview - Micron Technology trades at a low valuation of 10 times forward earnings, significantly cheaper than the average big tech companies trading at about 30 times forward earnings [3]. - The company has reported strong revenue growth over the past two years, yet its stock remains undervalued due to the cyclical nature of the memory chip market [5][7]. Market Demand and Growth Potential - Wall Street analysts project a remarkable growth rate of 133% for Micron in the next quarter and 100% for fiscal year 2026, indicating robust demand for memory chips [7]. - The market opportunity for Micron's high-bandwidth memory (HBM) is expected to grow at a 40% compound annual growth rate (CAGR) to reach $100 billion by 2028 [10]. Production Capacity and Constraints - Micron's production capacity is currently maxed out, which poses a challenge in meeting the anticipated demand [10]. - Several new production facilities are under construction, including a fab facility in Idaho expected to start output in mid-2027, but these will not alleviate the production constraints expected in 2026 [11][12]. Financial Performance and Projections - Micron's gross margin is projected to reach an all-time high of 67% in Q2, which is expected to significantly boost earnings and profitability [13]. - The company is likely to benefit from soaring memory prices due to supply constraints, potentially leading to record margins this year [12][13].

Group 1 - Tesla CEO Elon Musk is pushing for the company's transformation into a robotics company, with the Optimus humanoid robot as a key focus, aiming for a valuation of $25 trillion, significantly surpassing current business value [2] - Huawei is projected to lead the Chinese smartphone market in shipments by 2025, benefiting from price adjustments and government subsidies, despite an overall decline in smartphone shipments in China [3] - Micron Technology plans to acquire PSMC's factory in Taiwan for $1.8 billion to enhance its DRAM production capacity, with the deal expected to close in Q2 2026 [10] Group 2 - Chengdu Xingji Glory's reusable liquid rocket production base is set to be completed by December 2026, with a design capacity of 20 rockets per year, focusing on reducing launch costs through reusability [7] - SK Hynix will distribute record bonuses of over 136 million KRW (approximately 640,000 RMB) per employee, attributed to a historic labor agreement that allows for a percentage of annual operating profit to be included in the bonus pool [12] - Yingfang Micro plans to acquire 100% stakes in Shanghai Xiaokeli and FIRST TECHNOLOGY CHINA LIMITED, with the transaction expected to constitute a major asset restructuring for the company [16]

Summary of Key Points from Conference Call Records Semiconductor Industry - **CPU Shortage**: Intel has shifted production capacity of Intel 3 and Intel 7 towards servers, with Rubin significantly increasing CPU core counts and hyper-threading capabilities. The CPU in the Agent era acts as a central manager, coordinating the operation of the Agent environment, multiple Agent calls, and memory system management [1][3] - **Memory Chip Shortage**: Micron anticipates an unprecedented shortage of memory chips to persist beyond 2026 [1][3] Robotics Industry - **Order Acquisition**: UBTECH has secured orders from Airbus [3] - **Tesla Robotics**: Domestic Tesla robot suppliers are gradually obtaining framework agreements such as PPA [3] - **Product Development**: He Xiaopeng announced that the first robot developed using automotive standards, the ET1 version, has successfully launched [3] Artificial Intelligence - **Industry Engagement**: MiniMax founder Yan Junjie participated in a significant roundtable discussion [3] - **Product Development**: "Button" announced a 2.0 brand upgrade, introducing new features called Agent Skills [3] - **Upcoming Financial Reports**: Meta's FY2025 Q4 and Microsoft's FY2026 Q2 financial reports are set to be released on January 28 [3] Satellite Industry - **Successful Launch**: The Long March 12 rocket successfully launched 19 low-orbit satellites for satellite internet [4] Apple Inc. - **Market Performance**: Counterpoint reports that Apple's iPhone shipments surged by 28%, leading the Chinese market [4] - **Product Innovation**: Rumors suggest that the iPhone 18 Pro series will be the first 5G satellite communication smartphone [4] Aerospace and Defense - **C919 Compliance**: The C919 aircraft has passed compliance flight tests by the European Union Aviation Safety Agency [4] - **Gas Turbine Project**: The Aero Engine Corporation's "Taihang Three Brothers" gas turbine project has completed evaluation and acceptance [4] Agriculture - **Pesticide Export Policy**: The cancellation and reduction of export tax rebates for pesticide raw materials and intermediates may lead to short-term "export rush" boosting market conditions, while optimizing supply in the medium to long term [4] Tourism Industry - **Travel Trends**: The extended nine-day holiday during the Spring Festival in 2026 is expected to sustain positive travel data [5] Market Insights - **Regulatory Environment**: There are rumors about prohibiting excessive hype around market uptrends and restricting over-interpretation of industry hotspots [6] - **Market Activity**: Today's trading volume was 27,083 billion, with a reduction of 3,179 billion. The market is expected to release liquidity as several stocks hit the limit down [7] Chemical Industry - **Investment Strategy**: The chemical sector remains a suitable direction for stable investment, recommended for large, conservative funds [8] Power Grid - **Market Recovery**: The power grid sector is showing strong recovery, with significant interest from both quantitative and subjective investors [9]

Group 1 - The core viewpoint of the article highlights the significant rise in stock price of兆易创新 (GigaDevice), which increased over 5% and reached a new high of 304.8 HKD, driven by the ongoing memory chip shortage and strong demand from AI infrastructure [1] - Micron Technology's executives indicated that the memory chip shortage has worsened over the past quarter and will continue into the following year due to surging demand for high-end semiconductors driven by AI [1] - To address the supply shortage, Micron Technology announced an acquisition of a wafer fabrication facility from Powerchip for a total of 1.8 billion USD to expand its storage chip capacity [1] Group 2 - TrendForce reported that the current price increase is not merely driven by short-term sentiment but is a result of limited advanced process capacity and rigid growth in AI server demand, indicating a more sustained trend compared to previous cycles [1] - The fundamental driver of demand is the AI data center, with TrendForce predicting a 65% year-on-year increase in capital expenditure from the top eight global cloud providers by 2025 [1] - Both IDC and Gartner noted in their annual reports that AI servers have become the fastest-growing segment in data center IT investments, with storage systems being a key beneficiary [1]

Core Viewpoint - The stock of Zhaoyi Innovation (03986) has risen over 5%, reaching a new high of 304.8 HKD, driven by increasing demand for memory chips due to AI infrastructure development and ongoing supply shortages [1] Group 1: Company Developments - Micron Technology's executives indicated that the shortage of memory chips has worsened over the past quarter and will continue into the following year due to surging demand from AI infrastructure [1] - To address the supply shortage, Micron Technology announced an acquisition of a wafer fabrication facility from Powerchip for a total price of 1.8 billion USD to expand its storage chip capacity [1] Group 2: Industry Trends - TrendForce noted that the current price increases are not driven by short-term sentiment but are a result of limited advanced process capacity and rigid growth in AI server demand, indicating a more sustained trend than previous cycles [1] - The fundamental driver of demand comes from AI data centers, with TrendForce predicting a 65% year-on-year increase in capital expenditures from the top eight global cloud providers by 2025 [1] - Reports from IDC and Gartner highlight that AI servers are the fastest-growing segment in data center IT investments, with storage systems being a key beneficiary [1]

16 January 2026 Asia Quant Strategy & Asia Semis & Internet Asia Tech in 2026: Near-term momentum intact but broaden the exposure Rupal Agarwal +65 6326 7641 rupal.agarwal@bernsteinsg.com Mark Li +852 2123 2645 mark.li@bernsteinsg.com Robin Zhu +852 2123 2659 robin.zhu@bernsteinsg.com Cheng Zhang, CFA, CQF +852 2123 2636 cheng.zhang@bernsteinsg.com Edward Hou, CFA +852 2123 2623 edward.hou@bernsteinsg.com Charles Gou +852 2123 2618 charles.gou@bernsteinsg.com Min-Joo Kang +852 2123 2644 minjoo.kang@bernstei ...

Market Overview - On January 20, A-shares opened slightly higher, with the Shanghai Composite Index rising by 2.37 points (0.06%) to 4116.37 points, the Shenzhen Component Index up by 13.5 points (0.09%) to 14307.55 points, and the CSI 300 Index increasing by 2.45 points (0.05%) to 4736.91 points [1] - The gas and energy metal sectors led the gains, while the cultural media sector also opened high, with Zhejiang Wenhu Internet hitting the daily limit [1] - Focus stocks included Fenglong Co., which reached a limit up on its 14th trading day, and Jiamei Packaging, which opened 10% higher on its 22nd trading day [1] Company News - Yidian Tianxia announced that its stock will resume trading on January 20, 2026, after completing a self-examination related to stock price fluctuations [2] - Hualing Cable terminated its acquisition agreement with Hunan Xingxin Aerospace New Materials Co., due to a lack of consensus on specific terms [2] - Jiangbolong set the inquiry transfer price at 212.09 yuan per share, with 12,574,358 shares fully subscribed by 54 institutional investors [2] - Tianjian Technology expects a net loss of 170 million to 242 million yuan for 2025, with a revenue forecast of -140 million to -201 million yuan [2] Financial Performance - Trina Solar anticipates a net loss of 6.5 billion to 7.5 billion yuan for 2025, citing supply-demand imbalances and increased competition in the photovoltaic industry [3] - Chengdu Huamei expects a net profit of 213 million to 255 million yuan for 2025, a year-on-year increase of 74.35% to 108.73% [3] - Jiangxi Copper plans to issue debt financing tools, including medium-term notes up to 15 billion yuan and short-term financing bills up to 10 billion yuan [3] Sector Insights - Water Well Square forecasts a net profit of 392 million yuan, a 71% decrease year-on-year, with revenue expected to drop by 42% [4] - Dingtong Technology projects a net profit of 242 million yuan for 2025, a 119.59% increase year-on-year [4] - Hunan Yuneng expects a net profit of 1.15 billion to 1.4 billion yuan for 2025, a growth of 93.75% to 135.87% year-on-year [4] Industry Trends - Micron Technology reported a worsening shortage of memory chips, driven by surging demand for AI infrastructure [6] - The Hainan Free Trade Port has seen a 46.8% year-on-year increase in duty-free shopping amounts, indicating strong consumer enthusiasm [7] - The Chinese aviation engine group announced successful evaluations of several gas turbine innovation projects, promoting the commercialization of the gas turbine industry [8] - The upcoming Spring Festival holiday is expected to boost travel, with domestic travel bookings up nearly 20% year-on-year and outbound travel bookings up nearly 80% [9]

Core Viewpoint - Barclays has raised its 12-month price target on Micron stock to $450 from $275, indicating a significant bullish outlook on the company's future performance [1] - Wells Fargo has also increased its target for Micron stock to $410, reflecting a positive sentiment in the market [1] Company Summary - The new price target set by Barclays represents a substantial increase of approximately 63.64% from the previous target [1] - Wells Fargo's revised target indicates a notable increase, suggesting confidence in Micron's growth potential [1]