on 03-Feb-2026 3 February 2026 Global Semiconductors Global Semis: Can Intel challenge TSMC with EMIB-T? And who benefits in the supply chain? David Dai, CFA +852 2918 5704 david.dai@bernsteinsg.com Mark Li +852 2123 2645 mark.li@bernsteinsg.com Jack Lin +852 2123 2683 jack.lin@bernsteinsg.com Juho Hwang +852 2123 2632 juho.hwang@bernsteinsg.com Carmine Milano +44 20 7762 1857 carmine.milano@bernsteinsg.com Edward Hou, CFA +852 2123 2623 edward.hou@bernsteinsg.com Yipin Cai, CFA +852 2123 2669 yipin.cai@ber ...

Core Viewpoint - A fresh analysis of global semiconductor supply chains indicates that hyperscaler demand is increasing, leading to tighter memory supply and reshaping the competitive landscape in the industry. Group 1: Hyperscaler Demand and Memory Pricing - Hyperscalers are securing Dynamic Random-Access Memory (DRAM) and NAND capacity in anticipation of a 50% growth in data center bits by 2026, resulting in higher contract prices [2] - DRAM contract prices are expected to rise by approximately 25% in Q1 2026 and 10%-12% in Q2 2026, while NAND prices are projected to increase by about 20% in Q1 2026 and 10%-15% in Q2 2026 [2] Group 2: Company Performance and Upgrades - Intel and AMD are highlighted as leading companies, with both upgraded to Overweight due to being largely sold out of 2026 server CPU capacity, with potential price increases of 10%-15% in Q1 2026 [4] - Micron Technology's price forecast has been raised to $450 from $325, reflecting positive views on AI compute and infrastructure demand [5] Group 3: Custom Silicon and Market Dynamics - Custom silicon is identified as a key battleground for hyperscalers, with Broadcom's Chip on Wafer on Substrate (CoWoS) supply for 2026 revised upward by 30% to 250K units, a significant increase compared to 2025 [6] - OpenAI's custom ASIC timeline has shifted to Q1 2027, with an expected lifetime unit opportunity of 1.5 million to 2 million, potentially adding $8 billion to $10 billion to Broadcom's AI backlog [7] Group 4: Challenges and Market Outlook - Higher memory prices and shortages are negatively impacting handset demand and margins, leading to lowered estimates for Qualcomm and highlighting Arm Holdings as a potential headwind due to anticipated smartphone market contraction in 2026 [9] - Memory constraints and price increases may affect PCs, smartphones, and automotive sectors, despite strong demand in AI and data center markets [9]