Summary of Key Points from the Conference Call Industry Overview - **Industry**: Memory Sector, specifically focusing on DRAM and NAND markets in the Asia Pacific region - **Current Trend**: The memory sector is experiencing a significant upturn, with expectations for continued growth driven by AI demand and cloud computing needs [2][9][19] Core Insights and Arguments 1. **Memory Price Dynamics**: - Pricing for NAND and DRAM has increased sharply, with expectations for prices to potentially double from current levels if they return to peak levels [2][19] - Recent data indicates a price increase of up to 25% for DRAM and NAND, driven by heightened orders from US cloud server customers [3][19] 2. **Supply and Demand Balance**: - A tightening supply/demand balance is emerging faster than anticipated, with estimates suggesting it will take 4-6 quarters for supply to catch up with demand [4][19] - DRAM inventories have decreased significantly, now below a two-week supply, prompting customers to build buffer stock [4][21] 3. **Investment Strategy**: - The final phase of a memory upcycle historically yields the strongest equity returns, suggesting that maintaining positions in outperformers like SK hynix and diversifying with Samsung is advisable [5][9] - Staying invested through volatility is crucial to capture the full benefits of the upcycle [9][15] 4. **Earnings Momentum**: - Analysts have raised earnings projections for memory companies by nearly 46% on average over the past year, indicating a shift from skepticism to optimism [27][32] - The correlation between earnings revisions and stock performance is evident, with SK hynix showing a 140% share price increase supported by a 62% rise in earnings estimates [32][40] 5. **Valuation Considerations**: - Current valuations reflect high investor confidence, particularly for SK hynix, which is trading at an all-time high forward P/B multiple [40][39] - Samsung, however, is trading below its historical peak, indicating potential for upside if earnings forecasts continue to improve [40][39] Additional Important Insights - **AI Demand Influence**: The demand for memory is increasingly driven by AI applications, with inference workloads becoming a dominant force in the market [3][20] - **Market Psychology**: Historical data suggests that new highs in memory stocks do not necessarily indicate an imminent reversal, as the average one-year return post-highs is still positive [12][32] - **Technological Developments**: Ongoing advancements in memory technology and the growth of hyperscale data centers are expected to prolong the memory upcycle [53][54] Conclusion - The memory sector is positioned for significant growth, driven by strong demand from AI and cloud computing. Investors are encouraged to maintain their positions and consider the long-term potential of leading companies in the sector, while being mindful of market volatility and valuation dynamics.

Summary of Conference Call on Greater China Semiconductors Industry Overview - **Industry**: Greater China Semiconductors - **Focus**: NOR Flash and DDR4 DRAM pricing trends Key Points 1. **Price Hike Anticipation**: A price hike for NOR Flash is expected starting from Q3 2025, as pricing has likely reached its lowest point. This is supported by increased foundry wafer prices from Chinese foundries since late Q2 2025, which may lead to higher prices for design houses in Q3 2025 [2][10][11] 2. **Vendor Pricing Strategies**: GigaDevice is reportedly reducing low-density NOR production while increasing prices for mainstream NOR by up to 10%. This strategy is expected to benefit NOR Flash vendors including GigaDevice, Winbond, and Macronix [2][10] 3. **Top Pick**: Winbond is highlighted as the top pick among NOR Flash vendors due to its strong pricing power in the current market environment [2][10] 4. **Market Dynamics**: The NOR Flash market is experiencing an upcycle driven by limited supply expansion and stronger demand, particularly in sectors like automotive for SLC NAND [10][11] 5. **Risks**: Potential risks include a downcycle in NOR Flash pricing due to faster supply expansion or demand weakness, as well as weaker-than-expected DRAM pricing due to oversupply [10][11][12] Company-Specific Insights 1. **GigaDevice Semiconductor**: The price target for GigaDevice is set at Rmb169, based on a residual income model with key assumptions including a cost of equity of 8.9% and a medium-term growth rate of 18% [8] 2. **Macronix International**: Valuation methodology for Macronix is based on a price-to-book ratio of approximately 0.8x for 2025, reflecting the cyclical nature of the memory industry [6] 3. **Winbond Electronics**: Winbond's valuation is pegged at a price-to-book ratio of 1.3x for 2025, indicating stronger pricing power compared to its peers [7] Additional Considerations - **Analyst Ratings**: The overall industry view is considered attractive, with various companies in the semiconductor sector receiving ratings ranging from Overweight to Underweight based on their performance and market conditions [3][68] - **Investment Banking Relationships**: Morgan Stanley has ongoing investment banking relationships with several companies in the semiconductor sector, which may influence research objectivity [4][20][21] This summary encapsulates the key insights and data points from the conference call regarding the Greater China semiconductor industry, particularly focusing on NOR Flash pricing trends and company-specific evaluations.