Cloud giants’ shift to ASICs for cost/performance efficiency makes production excellence a strategic ‘must have’Taipei, Taiwan, Feb. 10, 2026 (GLOBE NEWSWIRE) -- Successfully managing high-volume mass production is a critical pillar in the ASIC value chain as datacenters and AI infrastructure companies pursue an alternative to off-the-shelf GPU, according to Dave Hwang, Senior Vice President of Alchip Technologies, Inc. Driving down the high to total cost of ownership (TCO) and optimizing training and infe ...

February 4, 2026 08:00 PM GMT Greater China Semiconductors | Asia Pacific Investor Feedback on Semi Distribution Morgan Stanley Asia Limited+ Daisy Dai, CFA Equity Analyst Daisy.Dai@morganstanley.com +852 2848-7310 Investors broadly agree with our thesis that semi distribution is entering a new phase of relevance driven by AI ASIC adoption and supply-chain complexity. Questions remain around margins, cyclicality, and relative positioning. Following our Semi Distribution – An Overlooked Segment to Play AI in ...

Summary of Conference Call on Semiconductor Distribution and AI Industry Overview - The focus is on the semiconductor distribution sector, particularly in relation to AI ASIC demand and its implications for companies like WT Microelectronics and WPG Holdings [1][2][3]. Key Points 1. AI Market Outlook - The AI data center Total Addressable Market (TAM) is projected to grow to **US$632 billion by 2026** [2]. - Semiconductor TAM is expected to grow at a **9% CAGR** over the next five years, driven by AI [2]. - AI ASICs are forecasted to have a **63% CAGR** from 2025 to 2028, indicating a significant shift in demand from traditional GPUs [2]. 2. Semiconductor Distributors' Growth Potential - Semiconductor distributors have underperformed in growth compared to the overall semiconductor market, lagging by **18 percentage points** over the past two years [3]. - However, the growth of AI ASICs is expected to expand the TAM for distributors, alongside increased complexity in supply chain logistics and rising working capital needs [3]. - A potential decline in interest rates could further enhance earnings for distributors, with estimates suggesting a **2% earnings boost** for WT Micro with a **50bps cut** in rates [39]. 3. Company-Specific Insights - **WT Microelectronics** is initiated with an **Overweight (OW)** rating and a price target of **NT$198**, reflecting a **20% revenue CAGR** from 2025 to 2028 [5][53]. - The company is positioned to benefit significantly from AI ASICs due to its high exposure to data centers and recent acquisition of Future Electronics, which enhances its market share in the US and EU [4][49]. - **WPG Holdings** is rated **Underweight (UW)** due to limited AI exposure and pressures in non-AI markets, with a revised price target of **NT$57** [6][58]. 4. Market Dynamics and Competitive Landscape - The semiconductor distribution segment is described as mature and consolidated, with the top four distributors holding a **43% global market share** as of 2024 [4]. - WT Micro's market share has increased from **1.9% in 2011 to 14% in 2024**, indicating strong growth and competitive positioning [46]. - The average P/E ratio for semiconductor distributors is low at **11x**, compared to **14.5x** for ODM/OEMs, suggesting potential undervaluation [23]. 5. Future Projections - The TAM for semiconductor distribution is expected to reach **US$279 billion by 2029**, with a **13% CAGR** from 2025 to 2029, significantly outpacing the overall semiconductor industry growth of **8%** [44]. - The shift towards ASICs is anticipated to drive more indirect sales through distribution channels, reversing previous trends dominated by direct sales of GPUs [30][44]. Additional Insights - The semiconductor distribution sector is increasingly recognized for its value-added services, particularly in logistics management and working capital support, as supply chains become more complex [24]. - The performance of semiconductor distributors has been notably weaker compared to semiconductor companies, with distributor stocks up **52%** since the start of 2023, compared to **126%** for TAIEX and **214%** for SOX [22]. This summary encapsulates the key insights and projections from the conference call, highlighting the evolving landscape of the semiconductor distribution industry in the context of AI advancements.

Core Viewpoint - Intel's stock is gaining attention from investors after years of struggles, with recent upgrades from analysts indicating a more optimistic outlook for the company [1][2][10] Group 1: Analyst Upgrades and Market Sentiment - KeyBanc analyst upgraded Intel's stock to "buy" with a price target of $60, reflecting growing investor optimism [2] - Citigroup analyst Atif Malik upgraded Intel from "sell" to "hold" with a price target of $50, indicating a cautious but improved outlook [3][10] Group 2: Foundry Opportunities - Malik identifies significant opportunities for Intel's foundry segment due to a shortage of advanced packaging capacity at TSMC and U.S. government investments [4] - The demand for AI ASICs is expected to drive business to Intel Foundry, as companies like Alphabet, Amazon, and Microsoft design custom AI chips [6] Group 3: Production and Technology Developments - Intel's 18A process is in production, with Panther Lake chips set to debut in laptops, achieving yields of around 60% [5] - The successful implementation of the 18A process is seen as a compelling option for chip designers facing manufacturing capacity challenges [5] Group 4: Market Challenges and Risks - Despite positive developments, concerns remain regarding Intel's CPU business, particularly with the performance of Arrow Lake chips and competition from AMD and Arm-based devices [7][9] - Rising memory chip prices could negatively impact overall PC demand, complicating Intel's recovery in the PC market [9]

Core Insights - Stanley Druckenmiller sold his position in Broadcom and initiated a position in Sandisk during the third quarter of 2025 [1][2] Group 1: Broadcom - Broadcom holds a dominant position in three semiconductor markets: wireless networking, wired networking, and application-specific integrated circuits (ASICs) [3] - The company has approximately 75% market share in AI ASICs, which are custom chips designed to accelerate AI workloads [4] - AI revenue from networking chips and ASICs rose 65% to $20 billion in 2025, with expectations for significant growth in the coming years [5] - Wall Street estimates Broadcom's adjusted earnings will grow at 43% annually through 2027, with a median target price of $461 per share, indicating a 34% upside from its current price of $343 [6] Group 2: Sandisk - Sandisk manufactures data storage solutions based on NAND flash technology, benefiting from a strategic partnership with Kioxia [7] - Flash memory devices like SSDs are preferred for AI applications due to their speed and efficiency, while HDDs are used for cost-effective long-term storage [8] - Sandisk achieves cost efficiencies and supply chain security through vertical integration, managing the entire process from design to final product [9] - As the fifth-largest NAND flash memory manufacturer, Sandisk gained market share in the first half of 2025, with ongoing tests of its enterprise SSDs by major hyperscalers [10] - Wall Street estimates Sandisk's adjusted earnings will grow at 79% annually through June 2029, but its current valuation of 170 times earnings appears high, with a median target price of $307 per share indicating a 26% downside from its current price of $415 [11]

TSMC (2330.TW) Conference Call Summary Company Overview - **Company**: Taiwan Semiconductor Manufacturing Company (TSMC) - **Ticker**: 2330.TW - **Market Cap**: NT$41.1 trillion / $1.3 trillion - **Current Price**: NT$1,585.00 - **12-Month Price Target**: NT$2,330.00 (47% upside) [1] Key Industry Insights - **AI as Growth Driver**: AI is identified as a multi-year growth engine for TSMC, with silicon demand expected to outpace supply through 2027 due to exponential growth in token consumption [2][20] - **Capacity Tightness**: Anticipated capacity tightness will persist, leading to accelerated revenue and capital expenditures (capex) [2] Financial Projections - **Revenue Growth**: TSMC's revenue is projected to grow by 30% in 2026 and 28% in 2027, up from previous estimates of 22% for both years [2][20] - **Capex Forecast**: Total capex is expected to exceed US$150 billion from 2026 to 2028, with 2026E capex raised to US$46 billion and 2027E capex to US$54 billion [3][21] - **Gross Margin (GM)**: Projected GM for 2026 and 2027 is now 60.4% and 60.6%, respectively, indicating structural improvement despite higher capex [4][22] Earnings Estimates - **Earnings Per Share (EPS)**: EPS is expected to reach NT$82.56 in 2026 and NT$105.93 in 2027, reflecting an increase from previous estimates [6][40] - **EBITDA Growth**: EBITDA is projected to grow significantly, with 2026E EBITDA at NT$3,368.47 million and 2027E at NT$4,324.30 million [6][18] Capacity and Technology Developments - **Node Transition**: The transition from 5nm to 3nm nodes is expected to be fully loaded in 2026/2027, driven by AI GPU and ASIC demand [20] - **CoWoS Capacity**: CoWoS (Chip on Wafer on Substrate) capacity is forecasted to reach 1,275k wafers in 2026 and 2,310k wafers in 2027, representing significant year-over-year growth [25][39] Market Dynamics - **Investor Concerns**: Key debates include the sustainability of 60% GM, the extent of 3nm expansion, and the timing of capex increases [26] - **Geopolitical Stability**: A stable geopolitical environment is deemed necessary to prevent valuation discounts and support earnings visibility [27] Conclusion - **Investment Recommendation**: TSMC is rated as a "Buy" with a revised price target of NT$2,330, supported by strong AI demand, ongoing productivity improvements, and a favorable capex outlook [1][27]

Core Viewpoint - The competition between Broadcom and AMD to challenge Nvidia's dominance in the AI infrastructure market is intensifying, with both companies showing strong stock performance in 2025, particularly AMD with a year-to-date increase of over 70% compared to Broadcom's approximately 45% gain [1]. Summary by Company AMD - AMD is the second-largest player in the GPU market, focusing on the inference segment where cost-per-inference is crucial, and it has a competitive edge against Nvidia's CUDA software [3]. - Microsoft is developing a toolkit to convert CUDA code to AMD's ROCm, enhancing the use of AMD GPUs for inference, and AMD has partnered with OpenAI to deploy 6 gigawatts of GPUs, starting with 1 gigawatt next year, with OpenAI also acquiring a stake in AMD [4]. - In addition to GPUs, AMD is a leading provider of CPUs for computers and data centers, a rapidly growing market where it is gaining market share [5]. Broadcom - Broadcom approaches the AI chip market by designing custom AI ASICs, which are preprogrammed chips optimized for specific tasks, offering better performance and energy efficiency compared to traditional GPUs [6]. - The company has collaborated with Alphabet to develop Tensor Processing Units (TPUs), which have attracted other major data center operators as customers, with potential revenue from three key customers projected to exceed $60 billion by fiscal year 2027, and a $21 billion order from Anthropic for TPUs [7]. - Both AMD and Broadcom are trading at similar valuations, indicating a competitive landscape [8].

Group 1: Broadcom - Broadcom is well-positioned to capitalize on the increasing demand for AI infrastructure, particularly in data centers [2][5] - The company has significant opportunities in custom AI chip development, with potential revenues from three customers estimated between $60 billion to $90 billion by fiscal 2027, and a $10 billion order from a fourth customer [5][6] - Broadcom's recent deal with OpenAI to design and deploy 10 gigawatts of AI chips represents a substantial growth opportunity, equating to approximately $35 billion in chips per gigawatt [6] Group 2: Amazon - Amazon's stock has underperformed recently, but it is expected to rebound and outperform in 2026 due to operational efficiencies driven by advancements in robotics and AI [7][8] - The North American segment of Amazon has shown strong operating leverage, with a 28% increase in adjusted operating income in Q3, despite only an 11% increase in sales [9] - AWS is beginning to accelerate its growth, with a 20% revenue increase in Q3, and a significant $38 billion cloud computing deal with OpenAI is expected to enhance its data center capabilities [11][12]

Core Viewpoint - TSMC is expected to see significant growth in AI-related revenue, driven by orders from major clients like Nvidia, AMD, and Broadcom, with projections indicating a potential breakthrough of NT$1 trillion in revenue this year and continued growth into 2026 [1] Group 1: AI Revenue Growth - TSMC's AI-related revenue is projected to reach between $28 billion and $33 billion this year, representing multiple growth compared to last year, and accounting for approximately 23% to 28% of total revenue [1] - In 2024, TSMC anticipates its AI-related revenue will surpass $10 billion for the first time, marking a new operational milestone [1] - By 2026, AI-related revenue is expected to exceed $40 billion, solidifying TSMC's position above NT$1 trillion, reaching approximately NT$1.24 trillion [1] Group 2: Advanced Process Capacity and Client Demand - TSMC's clients are strategically reserving capacity for advanced processes below 3nm, driven by the AI arms race, with order visibility extending to 2028 [2] - The company collaborates closely with over 500 different clients, with project initiation timelines needing to be advanced by two to three years due to increasing process complexity [2] - TSMC defines AI-related demand to include AI accelerators for data centers, such as AI GPUs and AI ASICs, and anticipates that revenue from AI accelerators will double by 2025 [2] Group 3: Technological Advancements - TSMC's most advanced 2nm process has commenced production as scheduled, with expectations for rapid growth in 2026 driven by smartphone, high-performance computing, and AI applications [2]

Core Insights - Broadcom Inc. is recognized as a trending AI stock, with KeyBanc maintaining an Overweight rating and a price target of $420 ahead of its fiscal fourth-quarter 2025 earnings report [1][2] Financial Performance Expectations - KeyBanc expects Broadcom to report revenue of $17.5 billion and earnings per share of $1.87 for F4Q25, slightly above consensus estimates of $17.4 billion and $1.86 respectively [3] - The anticipated strong results are attributed to robust demand for artificial intelligence in networking and AI ASICs [2][3] Growth Drivers - Broadcom is projected to maintain a 100% market share in Google's TPU through 2026, alongside the ramp-up of Meta's AI ASIC, MTIA v2, which are key growth drivers for the company [3] - Investor focus will be on the $10 billion revenue from Broadcom's fourth ASIC customer, AI outlook, ASIC backlog updates, and potential additions to its XPU customer pipeline [4] Strategic Positioning - Broadcom is positioned uniquely in the AI revolution due to its custom chip offerings and networking assets, which enhances its competitive advantage in the market [4]