Summary of Key Points from Morgan Stanley Research on Global Semiconductors Industry Overview - The report focuses on the **semiconductor industry**, particularly in Europe, highlighting key debates and top picks for investment in 2026 [6][9][19]. Core Insights and Arguments - **DRAM Pricing Trends**: Year-over-year (YoY) DRAM pricing is expected to increase into the first half of 2026, indicating a recovery in the memory market [6][43]. - **Memory Inventory Normalization**: The memory inventory levels are normalizing, which is a positive sign for the semiconductor supply chain [9][43]. - **Performance Comparison**: ASML has outperformed DRAM companies like Samsung Electronics, Micron, and SK Hynix from 2010 to 2012, suggesting a potential investment opportunity in ASML [13][16]. - **Investment Recommendations**: - **Top Picks**: - **Samsung Electronics**: Expected to benefit from a better commodity cycle driven by AI and high-bandwidth memory (HBM) market share gains, with a price target of 170,000 KRW, representing a 14% upside [18]. - **SK Hynix**: Similar benefits from the AI-driven commodity cycle, with a price target of 840,000 KRW, indicating a 13% upside [18]. - **ASML Holding NV**: Anticipated to benefit from increased EUV layer count, with a price target of 1,400 EUR, suggesting a 25% upside [18]. - **Market Dynamics**: The semiconductor industry is experiencing tech inflation, which is expected to impact demand for tech products due to rising costs in wafers, OSAT, and memory [19][57]. Additional Important Insights - **AI Impact**: The ripple effect of AI is expected to significantly influence memory demand, with companies like Winbond and Phison identified as top picks in the memory sector [19]. - **Long-term Demand Drivers**: The report highlights that AI cannibalization and tech diffusion are key long-term demand drivers, with generative AI proliferating across various verticals [19]. - **Cloud Capex**: Major cloud service providers (CSPs) are projected to spend nearly **$632 billion** on cloud capital expenditures in 2026, indicating robust demand for semiconductors [61]. - **NAND and NOR Flash Shortages**: The report anticipates shortages in NAND and NOR flash memory due to increased demand from AI storage solutions [51][57]. Conclusion - The semiconductor industry, particularly in Europe, is poised for growth driven by AI advancements and normalization of memory inventory. Investment opportunities are highlighted in companies like Samsung, SK Hynix, and ASML, with a focus on the long-term impacts of AI and cloud computing on semiconductor demand.

on 19-Jan-2026 19 January 2026 We update our tracker with the Dec data as we find that the Korea export data is a good early indicator for Samsung's & SK hynix's HBM revenue in the same quarter. Details of our methodology can be found in our prior note. The dataset can be downloaded at this link. Samsung Dec HBM export grew MoM but not enough to meet our 4Q25 HBM revenue projection. Export from S. Chungcheong Province (where Samsung packages HBM) improved further MoM by 16% but still down 25% QoQ (vs. Sep), ...

Sources for: Style Exposure – J.P. Morgan Global Markets Strategy; all other tables are company data and J.P. Morgan estimates. See page 15 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single f ...

Memory Market Update Summary Industry Overview - The report focuses on the High Bandwidth Memory (HBM) market, particularly the structural shortage expected to persist until 2027E, driven by demand from AI applications such as GPUs and ASICs [1][25]. Key Insights - **HBM Market Cycle**: The HBM market is in its fourth year of an upcycle since 2023, with a projected Total Addressable Market (TAM) growth of 79% CAGR from 2024A to 2027E [1]. - **Pricing Power**: HBM pricing power is expected to remain with memory manufacturers, especially for advanced HBM4 products, due to stringent manufacturing requirements [1]. - **Demand vs. Supply**: HBM supply is anticipated to remain tight until 2027E, with demand growth significantly outpacing supply growth, particularly from major players like Google and Amazon [1][11]. - **Key Catalysts**: Upcoming catalysts include HBM4 qualification results, pricing negotiations, AI model competition, and TSV capacity expansion trends [1]. Demand Projections - **HBM Demand**: HBM bit demand is projected to reach 2,042 million units in FY25E, 3,511 million units in FY26E, and 5,419 million units in FY27E, with significant contributions from NVDA and ASICs [70]. - **ASIC Contribution**: ASICs are expected to account for over 35% of HBM bit demand in 2026-2027, with NVDA being a major driver of this demand [11]. Supply Dynamics - **Supply Constraints**: The report indicates that underinvestment and capex discipline among memory makers will continue to tighten HBM supply, with a projected supply of 2,613 million units in FY25E [70]. - **Glut Ratio**: The HBM supply-demand glut ratio is expected to remain negative, indicating a continued shortage [70]. Competitive Landscape - **Samsung's Role**: Samsung is anticipated to surprise positively with its HBM4 qualification, potentially capturing a significant market share [38]. - **Market Preferences**: In the near term, preference is given to Samsung (SEC) over SK Hynix (SKH) based on HBM option value and pricing upside [1]. Financial Metrics - **Revenue Growth**: HBM industry revenue is projected to grow from $35.7 billion in FY25E to $96.4 billion in FY27E, reflecting a robust demand environment [70]. - **ASP Trends**: The average selling price (ASP) for HBM is expected to increase, with a projected premium of 30% for HBM4 over HBM3E prices [61]. Investment Outlook - **Stock Performance**: Recent stock rallies in memory shares are attributed to conventional memory pricing rather than HBM factors, indicating a potential shift in market focus [66]. - **Future Catalysts**: The upcoming HBM4 qualification outcomes and demand equations are seen as critical for influencing memory earnings and stock performance [66]. Additional Considerations - **Capex Trends**: Concerns regarding capex for smaller cloud service providers (CSPs) may persist, but AI-related compute/storage demand is expected to remain strong [25]. - **In-House Demand**: The potential in-house demand from frontier AI model companies has not been fully factored into HBM projections, representing an upside risk [25]. This summary encapsulates the critical insights and projections regarding the HBM market, highlighting the ongoing structural challenges and opportunities for growth in the semiconductor industry.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **memory sector** within the **global technology** industry, particularly in relation to **AI** and its impact on memory demand and pricing dynamics [1][9][57]. Core Insights and Arguments - **Capacity Constraints**: The memory market is experiencing a capacity-constrained cycle, with long order visibility driven by AI inference. The primary risk for 2026 is execution and transition rather than demand [1][4]. - **Pricing Trends**: A steeper pricing climb is anticipated, with expectations of aggressive price hikes of over 70% quarter-on-quarter (QoQ) for both DRAM and NAND. This pricing power is shifting rapidly, driven by increased demand from AI applications [3][4][49]. - **Memory Demand**: Text-only AI inference is projected to account for 35% of global DRAM supply and 92% of NAND supply in 2026, indicating a significant shift in memory requirements due to AI advancements [3][41]. - **Supply Chain Dynamics**: The supply-demand gap for legacy memory is widening, particularly for DDR4/3 and NAND types. Capital expenditure (Capex) is expected to accelerate, focusing on DRAM, with meaningful expansions anticipated from 2027 [4][49]. Investment Recommendations - **Preferred Stocks**: The report recommends investing in companies with higher pricing power in DRAM (e.g., Samsung, SK Hynix, Micron), legacy memory (e.g., Winbond), and semiconductor capital equipment (e.g., ASML) [5][9][13]. - **Bottlenecks as Opportunities**: The report suggests that bottlenecks in the semiconductor industry, particularly in memory and semiconductor capital equipment, will lead to stock performance winners [9][10]. Additional Important Insights - **AI Inference Challenges**: The transition from generative AI to Agentic AI is creating new memory challenges, as these systems require significantly more memory capacity and performance to support their functions [28][29]. - **Long-term Growth Potential**: The memory market is expected to continue growing, with substantial headroom for improvement in AI models and increasing memory requirements due to the adoption of multimodal AI systems [32][33]. - **Market Dynamics**: The report highlights that the memory market is currently the largest and fastest-growing segment in semiconductors, with a projected growth rate exceeding 40% year-on-year in 2026 [57]. Conclusion - The memory sector is poised for significant growth driven by AI demand, with strong pricing power and investment opportunities in key players. The evolving landscape of AI applications is reshaping memory requirements, presenting both challenges and opportunities for investors in the semiconductor space [1][57].

Group 1: Memory and Storage Stocks - Memory and storage stocks have seen significant gains, with Sandisk (SNDK) rising nearly 28%, Western Digital (WDC) up 17%, Seagate Technology (STX) increasing by 14%, and Micron (MU) gaining 10% [3] - Micron's recent quarterly results and guidance were significantly better than expected, leading Wall Street firms to suggest the company is in a "supercycle" [4] - A shortage in high-bandwidth memory is reported as data centers and GPUs increase their demand, with Samsung Electronics and SK Hynix discussing a potential price increase for server memory by up to 70% in Q1 [4] Group 2: Meta's Acquisition Review - China's commerce ministry is reviewing Meta's (META) $2 billion acquisition of AI startup Manus for potential violations of technology export controls [5][6] - The review is assessing whether Manus's relocation to Singapore required a Chinese export license, which could allow Beijing to influence the transaction [6] - However, Manus's product is not deemed core technology vital to China, which may reduce the urgency for intervention [6] Group 3: Discord's IPO Filing - Discord (DSCD) has confidentially filed for an initial public offering, with Goldman Sachs and JPMorgan Chase as lead underwriters [7][8] - Founded in 2015 and based in San Francisco, Discord has over 200 million monthly active users and is popular among gamers and programmers [8] - The IPO plans are still preliminary, with no specific timeline, valuation, or listing exchange announced yet [8]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **AI semiconductor industry**, particularly the dynamics surrounding **AI GPUs** and **AI ASICs**. The demand for these components is expected to be strong in 2026, driven by supply factors such as memory availability and TSMC's 3nm technology [1][4][42]. Core Insights - **Nvidia's Production**: Nvidia's management reported that the **Rubin** compute board is in "full production," with assembly time significantly reduced from approximately **2 hours** for Blackwell to about **5 minutes** for Rubin. The launch is anticipated in the **second half of 2026** [2][54]. - **China's AI Chip Demand**: There is a forecast of around **2 million units** of H200 chips demanded by Chinese customers, with ongoing licensing processes. Companies like **ByteDance** are actively developing AI server racks compatible with both Nvidia and local chips [4][84]. - **Market Size Projections**: The total AI chip market is projected to reach **US$550 billion** by **2029**, which includes both AI GPUs and ASICs. This reflects a significant growth trajectory for the sector [5][42]. Capacity and Production Dynamics - **TSMC's CoWoS Capacity**: TSMC is expected to expand its CoWoS capacity by **20-30%** in 2026, with a revised forecast of **125kwpm** by the end of the year, marking a **79% increase** from previous estimates [12][43]. - **ASE/SPIL and Amkor**: Both ASE/SPIL and Amkor are also expanding their CoWoS capacities to meet rising demand from key customers like Nvidia, AMD, and AWS [13][14]. - **Google TPU Production**: Google is accelerating the production of its next-generation **TPU** chips, moving the timeline from **4Q26** to **3Q26**. Broadcom has also booked **30k** of CoWoS-S capacity to meet TPU demand [26][28]. Financial Outlook - **Revenue Growth**: TSMC is projected to generate **US$107 billion** from AI chip foundry services by 2029, which would account for about **43%** of its total revenue [44]. - **Cloud Capex Spending**: Estimated cloud capital expenditure for 2026 is projected to reach **US$632 billion**, indicating robust investment in AI infrastructure [45]. Risks and Considerations - **Supply Chain Risks**: The primary concerns for 2026 are expected to be shortages in memory, T-Glass, and TSMC's 3nm wafers, rather than CoWoS capacity itself [43][42]. - **China's Localization Efforts**: China is expected to increase its local chip production to support AI development, which may create additional demand for both local and foreign chips [81][82]. Additional Insights - **ByteDance's AI Server Racks**: At a recent conference, ByteDance showcased its **256-node AI server racks**, which are designed to work with both Nvidia and local AI chips, highlighting the competitive landscape in China's AI market [84]. - **Market Dynamics**: The AI semiconductor market is characterized by rapid growth and evolving dynamics, with significant implications for companies involved in chip production and supply chain management [42][43]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the AI semiconductor industry.

Core Viewpoint - Micron's stock surged over 8% following a strong earnings report, indicating investor confidence in the company's potential as a key player in the semiconductor market, particularly driven by AI data-center demand tightening memory supply and increasing prices [1][2]. Financial Performance - Micron reported record fiscal Q1 2026 revenue of $13.64 billion, exceeding consensus by approximately $800 million and reflecting a 57% year-over-year increase [3]. - Earnings per share (EPS) reached $4.78, nearly $1 above estimates, with free cash flow hitting $3.9 billion, the highest in the company's history [3]. - For Q2, Micron forecasted revenue of $18.7 billion, $4.5 billion above Wall Street expectations, and EPS of $8.42, nearly doubling the consensus estimate of $4.49 [3]. Market Dynamics - The earnings report has led to a significant repricing of Micron's earnings trajectory for 2026, driven by memory scarcity [4]. - Conventional DRAM prices are expected to rise by 55-60% quarter-on-quarter in Q1 2026, while server DRAM prices are projected to increase over 60% in the same period [4]. - High-bandwidth memory (HBM) prices are anticipated to rise by 50-55%, with custom HBM for specialized AI chips increasing even more rapidly [5]. Analyst Sentiment - Analysts have adjusted their price targets for Micron, with Morgan Stanley raising its target to reflect the new guidance, indicating that Micron could benefit from the memory supply crunch for multiple years [6]. - Consensus price targets have increased by 30% in the two weeks following the earnings release, with some boutique firms projecting targets as high as $350 [6]. Demand and Supply Outlook - The demand for memory in AI infrastructure is growing faster than supply, with data center memory density per server increasing and HBM capacity sold out through much of 2026 [7][8]. - Manufacturers like Micron are being cautious with capital expenditures to avoid a cyclical downturn, which supports elevated memory prices as long as AI spending remains strong [8]. Future Projections - Institutional investors foresee a potential for Micron to double its net income in 2026 if pricing remains stable and utilization stays high [9].

on 05-Jan-2026 5 January 2026 Global Memory MEMORY TRACKER (Dec): Further acceleration from Nov Mark Li +852 2123 2645 mark.li@bernsteinsg.com Mark C. Newman +1 212 845 7822 mark.newman@bernsteinsg.com Edward Hou, CFA +852 2123 2623 edward.hou@bernsteinsg.com Yipin Cai, CFA +852 2123 2669 yipin.cai@bernsteinsg.com Contract price: Contract prices rose further in Dec as more follow-on orders came in. With server demand staying strong, suppliers continued to hike prices while also having to ration supply to no ...

Group 1: Fox and Flutter's FanDuel - Fox has the option to acquire an 18.6% stake in Flutter's FanDuel, which holds over 30% market share in U.S. sports betting [2][3] - The option originated from Fox's 2019 investment in The Stars Group, which was later folded into FanDuel after Flutter's acquisition [3] - CEO Lachlan Murdoch confirmed Fox's intention to exercise the option, with a potential FanDuel valuation around $35 billion [4] Group 2: Market Reactions and Other News - Analysts view the FanDuel option as a hidden asset value for Fox, with varying opinions on the timing for exercising the option [5] - LifeMD and GoodRx stocks rose after adding Novo Nordisk's Wegovy weight-loss pill to their offerings, priced at $149 per month [5] - Samsung and SK hynix are expected to raise server memory prices by up to 70% in Q1 due to increased AI demand [6]