Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Technology Semiconductors - **Focus**: Cloud and PC Semiconductors - **Key Trends**: AI investments are a primary focus for hyperscalers in 2026, with memory pricing affecting capital expenditure (capex) and the overall PC and enterprise server market. Preference is given to cloud semiconductor companies over PC semiconductor companies [1][3]. Key Company Insights Meta (META.O) - **4Q25CY Capex**: US$22.1 billion, representing a 14% increase quarter-over-quarter (Q/Q) and a 48% increase year-over-year (Y/Y) [7]. - **2026 Capex Guidance**: Expected to be between US$115-135 billion, a 74% increase Y/Y at the mid-point, driven by investments in superintelligence labs and core business infrastructure [7]. - **AI Focus**: Continues to prioritize AI and collaborates with key partners while advancing its silicon program to diversify chip supply and enhance infrastructure flexibility [7]. Microsoft (MSFT.O) - **F2Q26 Capex**: Reported at US$37.5 billion, a 7.4% increase Q/Q and a 66% increase Y/Y, with two-thirds allocated to short-lived assets focusing on GPUs and CPUs [7]. - **Future Capex Expectations**: Anticipates a sequential decrease in capital expenditure due to normal variability from cloud infrastructure buildouts and timing of finance lease deliveries [7]. - **New Products**: Introduced the Maia 200 GPU and Cobalt 200 CPU, aimed at avoiding reliance on a single source for chip supply [7]. - **Impact of Memory Pricing**: Increasing memory prices are expected to affect capex and create volatility in on-premises server business transactions, with a negative outlook for the PC market [7]. Investment Outlook - **Cloud Semiconductor Providers**: Positive sentiment towards cloud semiconductor companies like Aspeed Technology (5274.TWO) due to ongoing investments in 2026 [3]. - **PC Market Caution**: A cautious view on PC semiconductors, particularly in the second half of 2026, due to rising memory prices impacting the market [3]. Valuation Methodology and Risks - **Aspeed Technology (5274.TWO)**: Valuation based on a residual income model with key assumptions including a cost of equity of 9.8%, medium-term growth rate of 18.5%, and terminal growth rate of 5.2% [9]. - **Risks**: Upside risks include stronger cloud demand and faster-than-expected specification migration, while downside risks involve softening cloud demand and intensified competition [9]. Additional Insights - **Industry View**: The overall industry view is considered attractive, indicating potential for growth and investment opportunities [5]. - **Analyst Team**: The report is prepared by a team of analysts including Daniel Yen, Charlie Chan, Daisy Dai, and Tiffany Yeh, who have certified their views on the companies discussed [14]. This summary encapsulates the key points from the conference call, focusing on the semiconductor industry, particularly the cloud and PC segments, and highlights the strategic directions of major players like Meta and Microsoft.