Accessible version We hosted a memory expert call on 12 Sep. The guest speaker was Avril Wu of TrendForce. Wu was not bullish on HBM for 2026 given her assumptions for bit growth (only +27% YoY vs +94% in 2025) and ASP (down 10% vs +21%) are more conservative vs our current forecasts (bit growth +51%, ASP -6%). Wu also expects Samsung Electronics' HBM4 to be more successful (vs 12-hi HBM3e) given superior tech specs (1c node, 4nm logic die) vs peers. However, we still assume Hynix's market-dominant position ...

Summary of Global Memory Technology Conference Call Industry Overview - **Memory Market Growth**: The global memory market is projected to experience significant growth, with DRAM sales expected to reach **US$196 billion** in 2026, representing a **51% year-over-year increase**. NAND sales are anticipated to hit **US$114 billion**, reflecting a **45% increase** [1][10]. - **ASP Increases**: Average Selling Prices (ASP) for DRAM and NAND are expected to rise by **33%** and **26%** year-over-year, respectively, contributing more to revenue than bit growth, which is projected at **14%** for DRAM and **15%** for NAND [1][10]. Key Points 1. **2026 Super-Cycle**: The memory market is expected to enter a super-cycle similar to the 1990s, driven by AI advancements and a prolonged upturn, with sales growth continuing into **2027** [1][10]. 2. **HBM Demand Growth**: High Bandwidth Memory (HBM) demand is projected to grow by **50-100% annually**, driven by new GPU and ASIC technologies, while wafer capacity growth is expected to remain below **50%** [2]. 3. **Supply Constraints**: High capital expenditures (capex) are anticipated, with SK Hynix's capex estimated at **W23 trillion** in 2025 and **W35 trillion** in 2026. However, productivity is expected to be low, leading to a production volume increase of less than **20%** year-over-year for DRAM and NAND [3]. 4. **Sustainable High ASP**: Despite spot price corrections, conventional DRAM prices are expected to stabilize between **US$10-15**, indicating a potential upside of over **50%** for contract prices [4]. 5. **Top Investment Picks**: SK Hynix is identified as the top pick in the global memory sector, with Samsung Electronics and Nanya Tech also recommended. EPS estimates and price objectives for all three companies have been raised due to favorable pricing conditions [5][6]. Company-Specific Insights - **SK Hynix**: Projected operating profit for 4Q25 and 2026 is **W16 trillion** and **W77 trillion**, respectively. The new price objective is set at **W900,000**, up from **W800,000**, with a **23%** increase in EPS estimates based on higher DRAM ASP [6]. - **Samsung Electronics**: Expected operating profit for 4Q25 and 2026 is **W15 trillion** and **W76 trillion**. The new price objective is **W150,000**, up from **W140,000**, with a **17%** increase in EPS estimates [6]. - **Nanya Tech**: Benefiting from legacy DRAM shortages, the new price objective is **NT$200**, up from **NT$178**, with a **25%** increase in EPS estimates [6]. Additional Insights - **Inventory Levels**: As of December 2025, both DRAM and NAND inventories are at **3-4 weeks**, lower than the normal **1-2 months**, indicating tight supply conditions [12]. - **Utilization Rates**: Memory chipmakers' fabs are fully utilized, excluding old idle capacity, suggesting strong demand [14]. - **Sales Mix**: The sales mix for DRAM is increasingly driven by server and smartphone applications, with servers expected to account for **55%** of DRAM sales by 2027 [17]. Conclusion The global memory market is poised for substantial growth driven by technological advancements and increasing demand across various applications. Investment opportunities are favorable for key players like SK Hynix, Samsung Electronics, and Nanya Tech, with a focus on ASP increases and supply constraints shaping the market dynamics.

Core Insights - The AI infrastructure buildout is accelerating across semiconductors, cloud computing, and software applications, leading to increased competition and concentration risk for investors [2] Group 1: Fund Overview - The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) provides broad exposure to 86 AI companies, holding $7.0 billion in assets with a 0.68% expense ratio [3][8] - AIQ aims to offer comprehensive AI participation without concentrating capital in a few companies, combining investments in AI infrastructure and applications [4] Group 2: Portfolio Composition - No single position in the AIQ portfolio exceeds 4.5%, with Alphabet (NASDAQ:GOOGL) at 4.44%, Samsung Electronics at 3.92%, and Advanced Micro Devices (NASDAQ:AMD) at 3.63% [5] - Information technology constitutes 52.3% of holdings, while communication services and consumer discretionary sectors add another 16% [5] Group 3: Performance Metrics - AIQ has achieved a return of 26.29% over the past year and 30.89% year-to-date through December 12, 2025, with an annualized return of 17.91% since inception in May 2018 [6][8] - The fund has experienced recent volatility, with a drawdown of 12% from $53.76 to $47.33 before recovering to $50.52 [6] Group 4: Cost Considerations - The 0.68% expense ratio is higher than broad market index funds by approximately 0.65 percentage points annually, leading to significantly higher fees over long-term investments [7]

Group 1: OKLO and Nuclear Power - Oklo Inc. Class A stock saw over 25% weekly gains after entering an ATM equity distribution agreement to issue up to $1.50 billion in common stock for financing its small modular reactor technology, particularly for AI data centers [1] Group 2: Natural Gas Market - The ProShares Ultra Bloomberg Natural Gas ETF (BOIL) gained more than 22% in the last week as U.S. natural gas prices surged to a three-year high due to intense winter cold and increasing export flows [2] Group 3: Cannabis Industry - The AdvisorShares MSOS Daily Leveraged ETF (MSOX) achieved approximately 21% weekly return, driven by a major acquisition announcement in Europe and positive sentiment regarding potential U.S. federal policy changes in the cannabis sector [3] Group 4: Palantir Technologies - Palantir Technologies' stock price increased significantly, supported by enthusiasm for its AI product suite and strong growth in both government and commercial sectors [4] Group 5: Semiconductor Sector - The Direxion Daily Semiconductor Bull 3x Shares (SOXL) recorded over 12% returns last week, benefiting from AI momentum and a stronger-than-expected decline in inflation expectations [5] Group 6: Quantum Computing - The Defiance Daily Target 2X Long IONQ ETF (IONX) was driven by renewed momentum in the quantum computing sector, with notable commentary from Nobel laureate John Martinis on China's advancements in this field [6] Group 7: Transportation Sector - The Direxion Daily Transportation Bull 3X Shares (TPOR) returned approximately 11.6% last week, fueled by optimism around stabilizing trade policies, improving freight rates, and strong e-commerce demand [7] Group 8: Tesla and AI Chips - The Direxion Daily TSLA Bull 2X Shares (TSLL) featured approximately 11% returns as Tesla's stock jumped following CEO Elon Musk's announcement about plans to manufacture AI chips at unprecedented volumes [8] Group 9: S&P 500 Performance - The Direxion Daily S&P 500 High Beta Bull 3X Shares (HIBL) provided 3x leveraged exposure to high-beta stocks, with the S&P 500 gaining due to investor expectations of an interest rate cut by the Federal Reserve and strong individual stock performances [9] Group 10: South Korean Market - The Direxion MSCI Daily South Korea Bull 3X Shares (KORU) saw significant performance due to global enthusiasm for AI and advanced chips, benefiting major companies like Samsung Electronics and SK Hynix [10]

Core Viewpoint - SK Hynix is considering a U.S. listing to enhance corporate value amid soaring demand for AI hardware, with shares having surged nearly 230% this year [1][2]. Group 1: U.S. Listing Consideration - The company is reviewing various measures to enhance corporate value, including a potential U.S. stock market listing utilizing treasury shares, although no final decision has been made [2]. - SK Hynix has received proposals to list about 2.4% of its shares as American depositary receipts (ADRs) backed by treasury stock [3][4]. - A U.S. listing could help narrow valuation gaps between SK Hynix and U.S.-listed rivals like Micron Technology and Samsung Electronics [5]. Group 2: Financial Performance and Market Response - Following the announcement, SK Hynix shares rose 4% on Wednesday but later traded over 2% lower [5]. - The company has solidified its position in high-bandwidth memory chips, which are essential for Nvidia's AI processors [5]. Group 3: Capital Investment and Industry Support - SK Hynix is investing nearly $4 billion in an advanced packaging fab in Indiana to expand supply capacity and align with U.S. efforts to boost domestic chip production [6]. - The South Korean government is considering a 4.5 trillion won ($3.06 billion) foundry to support local chipmakers amid rising AI chip demand [7].

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call is on the **Artificial Intelligence (AI)** industry, particularly the adoption and financial aspects of AI technologies. Core Insights and Arguments 1. **Accelerating AI Adoption**: Conversations with enterprise CIOs and CTOs indicate that AI adoption is accelerating, with use cases transitioning from pilot to production by year-end. The release of OpenAI's ChatGPT 5.2 is expected to enhance performance and potentially reverse recent underperformance in AI stocks by 300 basis points [1][2] 2. **Risks and Market Adjustments**: The recent market correction is viewed as a normal adjustment following initial enthusiasm post-hyperscaler earnings. Execution risks, such as Amazon's power issues in Oregon, and concerns over borrowing costs are contributing factors [1][3] 3. **Financing Costs**: The construction of AI infrastructure at scale is facing high costs and risks, leading to a re-rating of the risk premium across the AI ecosystem. This is reflected in increased borrowing costs and equity multiple compression, particularly for companies heavily reliant on OpenAI [3][16] 4. **Underestimated Market Opportunity**: The market is believed to be underestimating the scale of the AI opportunity, with consensus estimates for the ecosystem remaining too low, especially beyond 2026. There is an expectation for upward revisions in estimates for AI companies [4][23] Additional Important Insights 1. **Enterprise AI Deployments**: There is a notable increase in enterprise-wide deployments of AI, with tens of thousands of individual agents being utilized in large companies. This trend is expected to continue into the next year [2][11] 2. **Hyperscaler Revenue Growth**: The growth in hyperscaler revenues reached $74 billion in Q3, with a year-over-year growth rate of 30%. Backlog growth is also surging, indicating a supply-constrained environment [11] 3. **Project Financing and Demand**: The increase in vendor-financed and project-financed deals signals strong demand for AI applications, despite supply constraints at the data center level [8] 4. **Specific Company Deployments**: Companies like L'Oreal, Telus, and Philips are deploying AI solutions at scale, achieving significant productivity gains and operational efficiencies [13] Conclusion - The AI industry is experiencing rapid adoption and growth, with significant opportunities ahead. However, challenges related to financing and execution risks remain. The market's current estimates may not fully capture the potential of AI technologies, suggesting a need for investors to reassess their outlook on the sector.

Market Overview - Asian stocks declined ahead of the Federal Reserve's interest-rate decision, with expectations of a 25 basis-point rate cut despite divisions within the committee [1] - The U.S. dollar faced pressure in Asian trade, while gold traded below $4,200 per ounce and oil prices remained steady after a 2 percent drop in the previous sessions [2] Regional Indices - China's Shanghai Composite index fell by 0.37 percent to 3,909.52, following the Politburo's announcement of plans to enhance domestic demand for 2026 through proactive fiscal and loose monetary policies [2] - Hong Kong's Hang Seng index dropped 1.29 percent to 25,434.23, primarily due to declines in tech stocks [3] - Japan's Nikkei average increased by 0.14 percent to 50,655.10, while the broader Topix index remained relatively unchanged at 3,384.92 ahead of the Bank of Japan's policy decision [3] - Seoul's Kospi average decreased by 0.27 percent to 4,143.55, ending a two-session winning streak amid uncertainty regarding the Federal Reserve's policy direction [4] Sector Performance - Tech shares, including SoftBank Group, Advantest, and Tokyo Electron, saw gains after Nvidia received permission to ship its H200 AI chip to China, leading to a 25 percent cut of sales [4] - Semiconductor and auto shares experienced declines due to profit-taking after recent strong gains, with Samsung Electronics down 1 percent, SK Hynix down 1.9 percent, and Hyundai Motor down 2.7 percent [5] - Australian markets fell as the Reserve Bank of Australia maintained interest rates, citing inflation risks, with the S&P/ASX 200 dropping 0.45 percent to 8,585.90 [5] - New Zealand's S&P/NZX-50 index decreased by 0.23 percent to 13,454.78, reversing earlier gains [6] U.S. Market Impact - U.S. stocks ended lower as Treasury yields rose due to inflation concerns, with the Dow down 0.5 percent, the Nasdaq Composite down 0.1 percent, and the S&P 500 down 0.4 percent [6]

Investment Rating - The report does not explicitly state an investment rating for the industry, but it provides a mixed outlook for various countries in Asia, indicating potential outperformers and underperformers based on economic conditions and growth forecasts [5][10][11]. Core Insights - The strong momentum of tech exports, particularly driven by AI demand and higher memory prices, is expected to sustain through 2026, while non-tech exports are likely to remain soft due to US tariffs and spillovers from China [10][21]. - The report anticipates a North-South monetary policy divide, with North Asian countries likely to maintain an extended hold on rates, while South/Southeast Asian countries may see further rate cuts [12][30]. - The overall GDP growth for Asia is projected at 3.6% year-on-year in 2026, slightly down from 3.7% in 2025, with specific countries like Korea, Malaysia, Japan, Singapore, Taiwan, and India expected to outperform [10][11][18]. Summary by Sections Economic Outlook - The AI supercycle is driving a regional split, with tech exports expected to thrive while non-tech exports face challenges [10][19]. - Domestic demand shows a mixed picture, influenced by supportive policies and political risks [24][28]. Growth Projections - Korea, Malaysia, Japan, Singapore, Taiwan, and India are projected to outperform, while China, Thailand, and the Philippines may disappoint due to weaker domestic demand [11][28]. - Specific growth forecasts include Korea at 2.3%, Malaysia at 5.2%, and India at 6.9% for 2026, all above consensus estimates [18][32]. Inflation and Monetary Policy - Inflation is expected to remain benign, with an average CPI inflation of 1.9% year-on-year in 2026, up slightly from 1.7% in 2025 [29]. - The monetary policy easing cycle is largely complete in North Asia, while South/Southeast Asia may see further cuts [30][31]. FX and Rates Strategy - The report outlines a strategy for Asia FX and rates into Q1 2026, highlighting potential trades such as long EUR/INR and short SGD/JPY [14][15]. - The USD is expected to remain stable, but risks of a weaker USD are noted due to potential triggers [15][30].

Market Overview - Major U.S. index futures indicate a slightly higher open on Monday, with stocks expected to build on modest gains from Friday [1] - Optimism regarding interest rates is contributing to initial strength on Wall Street ahead of the Federal Reserve's monetary policy meeting [1] Federal Reserve Expectations - The Fed is widely anticipated to lower interest rates by another quarter point, with traders focusing on the accompanying statement for future rate cut indications [2] - CME Group's FedWatch Tool shows an 89.2% chance of a quarter-point rate cut on Wednesday, but a 70.3% chance of rates remaining unchanged in January [2] Stock Performance - After a mixed trading session on Thursday, stocks showed modest strength on Friday, with the Nasdaq and S&P 500 reaching their best closing levels in a month [3] - For the week, the Nasdaq rose by 0.9%, the Dow by 0.5%, and the S&P 500 by 0.3% [4] Inflation Data - The PCE price index increased by 0.3% in September, matching August's growth and economist estimates [4] - The annual growth rate of the PCE price index rose to 2.8% in September from 2.7% in August, aligning with expectations [5] - The core PCE price index, excluding food and energy, rose by 0.2% in September, consistent with previous months and estimates [5] Sector Performance - Computer hardware stocks saw a 1.7% increase, while airline stocks gained 1.5% [7] - Networking, semiconductor, and software stocks also exhibited notable strength, while steel stocks declined significantly [7] Commodity and Currency Markets - Crude oil futures decreased by $0.53 to $59.55 per barrel, while gold futures fell by $11.30 to $4,231.70 per ounce [8] - The U.S. dollar traded at 155.60 yen and $1.1647 against the euro [8] Asian Market Performance - Asian stocks showed mixed results, with China's Shanghai Composite Index climbing 0.5% after positive trade data [10] - Hong Kong's Hang Seng Index fell 1.2% amid escalating tensions between China and Japan [11] European Market Performance - European stocks are mixed ahead of interest rate decisions from multiple central banks [16] - German industrial production unexpectedly accelerated by 1.8% in October, contrasting with expectations of a slowdown [16][17]

The race to get in on the humanoid robot boom is heating up. In a research note released earlier this month, analysts at Morgan Stanley broke down a list of the 25 companies best positioned to dominate the market for humanoid robots, which the investment bank estimates will be worth more than $5 trillion by 2050.The list focuses on companies with expertise in AI and computing chips, cameras and perception, and sensors and movement technology, the analysts said. They added that the list is intended to help ...