Vi e w p o i n t | 25 Feb 2026 19:27:39 ET │ 10 pages Taiwan Semiconductors Nvidia result implications - Blackwell expanding strongly, entering the Rubin Cycle CITI'S TAKE Nvidia just published its Jan Q result (report) and provided a positive outlook for the upcoming Rubin product cycle. While some investors were skeptical on Rubin's schedule and initial yield rate, Nvidia reiterates that the chip already has mass volume production and system rack is to ramp up big volumes in 2H26. Yet we believe the major ...

25 February 2026 | 4:05PM CST Equity Research CHINA INDUSTRIAL TECH: DATA CENTER ELECTRICALS Asia investor feedback: Eyes on export visibility and execution; Fine-tuning estimates on commodities cost trends/pre-announced results; Buy Kstar We talked with 50+ investors from Hong Kong, Singapore, and Mainland China since our deep-dive reports in mid-January (Kstar, Megmeet, Kehua). While the sector backdrop remains robust, supported by strong 2026E capex guidance from US tech giants as well as order growth an ...

February 13, 2026 05:30 AM GMT Capital Goods | Europe 800vDC Data center - First Inning: What we have heard so far from the Electrical suppliers Since we first wrote in September, investor interest around the shift to 800vDC data center architecture has clearly intensified. Post 4Q25, we assess the latest developments across cap goods suppliers. Delta and Eaton still lead globally, while there is more debate on positioning of EU suppliers We have been early on the 800vDC topic. first writing it in Sep-2025 ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **grid and electrical equipment** sector, particularly in the context of global investment trends and structural demand drivers across regions including **China, ASEAN, the US, and the EU** [2][3][10]. Core Insights and Arguments - **Structural Upcycle**: Analysts believe the current upcycle in grid equipment is structural rather than cyclical, supported by high manufacturing utilization and multi-year order visibility across **APAC** [3][10]. - **Investment Needs**: Global grid investment reached approximately **$450 billion** in 2025, but this is still below the estimated **$1 trillion** needed annually by 2050 to meet demand [4]. - **Aging Infrastructure**: About **45%** of global grid assets are over **20 years old**, with significant replacement needs emerging, particularly in the US where the average transformer is around **40 years old** [4][10]. - **OEM Backlogs**: Equipment suppliers are experiencing unprecedented demand, with average selling prices for transformers increasing by approximately **75%** since 2019, and high-voltage cable costs nearly doubling [5][10]. Regional Developments - **China**: The 15th Five-Year Plan mandates a record investment of **RMB 4 trillion** by 2030, a **40%** increase from previous plans, focusing on high-voltage expansion to support renewable energy [7]. - **ASEAN**: Leaders have agreed to accelerate the ASEAN Power Grid, aiming to double cross-border capacity by 2040, supported by an **$800 billion** financing initiative [7]. - **US**: Federal programs, including a **$65 billion** grid modernization fund, are pushing utilities to enhance and expand networks [7]. - **Europe**: The European Commission has introduced a new Grid Package requiring **€584 billion** in transmission investment by 2030 [7]. Capacity and Constraints - Manufacturing capacity for grid equipment is tight across APAC, with Japan operating at nearly **100%** utilization. Expansion plans are in place, but skilled labor shortages and input constraints remain significant challenges [12]. - Orderbooks are strong, particularly in Korea, where companies report **30%** year-over-year growth in orderbooks, with lead times extending to **3-4 years** [13]. Pricing Dynamics - Anticipated price increases in China due to potential tariff adjustments in the 2026 regulatory cycle are expected to support average selling price hikes and margin expansion [14]. - Japan's Hitachi aims to increase EBITDA margins from **13-15%** to **16-20%** by FY30, indicating a focus on disciplined pricing and higher-value products [14]. Demand Drivers - Demand is driven by a multi-year structural grid upgrade cycle across APAC, with significant needs for replacement and modernization of aging infrastructure, as well as the integration of digital automation and smart grid technologies [15][16]. Investment Recommendations - Companies positioned at the core of structural grid equipment demands, such as **NARI Technology**, **Hitachi**, and **Hyundai Electric**, are highlighted as key beneficiaries of the ongoing investment cycle [18][19]. - NARI Technology is particularly noted for its alignment with China's domestic grid investment priorities, with expectations of sustained pricing uplift and market share gains [18]. Conclusion - The combination of aging infrastructure, rising demand from renewable energy, and the need for modernization and digitalization in grid systems suggests a robust growth outlook for the grid equipment sector across APAC, with favorable pricing power and earnings durability anticipated [10][11].

Delta Electronics has more than quadrupled in market value since April, making the AI server parts maker Taiwan’s second-biggest stock. It’s now worth more than $100 billion. https://t.co/PmN0NxbomD ...

Summary of Greater China Technology Hardware Conference Call Industry Overview - The conference focused on the Greater China Technology Hardware sector, specifically addressing the impact of input cost hikes on profit outlook for 2026 [4][8]. Core Insights - **Opportunities in AI and Server Upgrades**: There are significant opportunities in AI GPU and ASIC server/rack design upgrades, particularly with the upcoming Vera Rubin platform and Kyber architecture [8][8]. - **AI ASIC Server Expansion**: The magnitude of AI ASIC server upgrades and volume expansion is primarily centered around TPU and Trainium platforms [8][8]. - **Share Price Upside Potential**: Analysts see potential for share price upside in the near term due to various factors including AI server power solutions and capacity expansion across the tech hardware supply chain [8][8]. - **Risks Identified**: - Consumer electronics demand, particularly for smartphones and PCs, is being negatively impacted by rising memory costs [8][8]. - Anticipated lower business momentum in the second half of 2026 due to pull-forward builds in the first half [8][8]. - Raw material price hikes (copper, nickel) and supply tightness are expected to create margin headwinds [8][8]. - Supply shortages may delay shipment pace, affecting overall market performance [8][8]. Key Stock Ideas - **AI Server Hardware**: Recommended stocks include Wistron, FII/Hon Hai, Wiwynn, Delta Electronics, AVC, BizLink, King Slide, Accton, Chenbro, Gold Circuit, Innolight, FIT, and Fositek [8][8]. - **Edge AI Companies**: Notable mentions include Xiaomi, Luxshare, and Lenovo [8][8]. Valuation Comparison - A detailed valuation comparison of various companies within the Greater China Technology Hardware sector was provided, including metrics such as market cap, EPS estimates, P/E ratios, and target prices [10][10]. - Companies highlighted include Lite-On Tech, Delta, Hon Hai, Foxconn Tech, and others, with specific price targets and ratings [10][10]. Additional Considerations - The report emphasizes the importance of considering Morgan Stanley Research as one of several factors in investment decision-making, acknowledging potential conflicts of interest [4][5]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the Greater China Technology Hardware industry.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the U.S. Semiconductors industry, particularly the AI value chain and its implications for various companies involved in hardware and semiconductor verticals [1][2] Core Insights and Arguments - A top-down framework is constructed to dimension the AI upside across sectors from 2025 to 2027, aimed at simplifying comparisons across different companies [2][19] - The analysis updates the breakdown of data center capital expenditures (capex) to reflect rising prices for DRAM and NAND, estimating an increase of approximately $70,000 per rack for server DRAM and $35,000 per rack for storage costs, raising all-in capex from $5.9 million to $6.0 million per rack [3][21] - Incremental revenue estimates per gigawatt (GW) of capacity are derived from market share estimates across nine key hardware/semiconductor verticals, with a regression analysis used to estimate margins on incremental AI revenue [4][23] Company-Specific Insights - **Unimicron and Ibiden** are highlighted as having significant upside potential, particularly in ABF substrate and HDI, with Unimicron expected to benefit from large opportunities [5][27] - **Nvidia (NVDA)** and **Broadcom (AVGO)** are identified as industry favorites, with Nvidia's AI substrate upgrade expected to double content generation [5][27] - **Intel (INTC)** and **Cisco** are noted to have lower exposure to AI opportunities compared to their market prominence, with Intel facing challenges in capturing market share [6][28][31] - **Delta Electronics** is rated as outperforming, with a price target of NT$1,300, benefiting from increased electrical content in AI data centers [13][30] - **MediaTek** is expected to see growth from the TPU ramp, while memory/storage players like **SanDisk**, **Samsung**, **Micron**, **SK Hynix**, and **KIOXIA** are projected to benefit from rapid memory price surges [6][30] Financial Metrics and Valuations - The report includes a detailed ticker table with performance metrics for various companies, including EPS and adjusted P/E ratios, indicating that Unimicron has room for growth while Intel appears expensive relative to its AI opportunities [9][29] - **Nvidia** is rated outperform with a target price of $275, while **AMD** is rated market perform with a target of $225, reflecting high expectations for AI growth [11][12] Additional Considerations - The analysis acknowledges that estimates of AI upside are imprecise and that valuations are influenced by various non-AI factors, suggesting that investors should consider their own assumptions for more accurate estimates [20][26] - The report emphasizes the importance of understanding the nuances of each company's position within the AI landscape, including their ability to adapt to evolving data center requirements [20][30] Conclusion - The semiconductor industry is poised for significant growth driven by AI, with specific companies like Unimicron and Ibiden positioned to capture substantial market share. However, challenges remain for established players like Intel, highlighting the dynamic nature of the sector and the need for careful analysis of individual company prospects [5][6][27][30]

Core Insights - India's government aims to be among the top four semiconductor manufacturing nations by 2032, with four companies set to begin commercial production in 2026 [1] - Significant investments are being made in semiconductor manufacturing, with Micron's ATMP facility in Gujarat costing over Rs 22,500 crore and Tata Electronics' fab in Dholera estimated at nearly Rs 91,000 crore [1][2] - The upcoming Budget is critical for transitioning the India Semiconductor Mission (ISM) from a subsidy-led program to a long-term industrial strategy [4] Investment and Capacity - Micron Technology's ATMP facility in Gujarat has an investment of Rs 22,516 crore with phased ramp-up [2] - Tata Electronics, in partnership with Powerchip Semiconductor Manufacturing Corp, plans a fab in Dholera with an investment of approximately Rs 91,000 crore, targeting an output of 50,000 wafers per month [2] - Other projects include CG Power's investment of Rs 7,600 crore for 15 million chips per day in Sanand, and Tata Semiconductor's Rs 27,000 crore investment in Assam for 48 million chips per day [2] Industry Demand and Support - India's internal semiconductor demand is projected to account for nearly 10% of global consumption over the next five years, indicating a strong case for domestic manufacturing [5] - Continued policy support similar to ISM 1.0 is essential to maintain momentum and prevent greenfield projects from relocating [6][7] - The FY27 Budget is expected to prioritize direct capital subsidies over long-term operating support due to the capital-intensive nature of semiconductor manufacturing [9] Infrastructure and Ecosystem Development - There is a need for semiconductor-ready infrastructure, including land, water, and power grids, which are often under state jurisdiction [13] - Competitive selection models for clusters and anchor investments are recommended to align state strengths with semiconductor manufacturing needs [14] - A national skills pipeline and technical tie-ups with global companies are critical for training in semiconductor technologies [19] Long-term Strategy and Governance - ISM 2.0 should adopt a long-term, milestone-linked investment model, with support extending beyond fabs to include suppliers and skilled talent [25] - A dedicated governance body is recommended to track metrics such as capex committed and project completion [19] - The upcoming Budget will be closely monitored for signals of continuity and strategic clarity in India's semiconductor ambitions [24]

Market Overview - Futures are higher, with S&P 500 futures up 0.3% and Nasdaq 100 contracts up 0.4%, driven by enthusiasm for technology stocks [1] - The Russell 2000 has outperformed the S&P 500 for ten consecutive sessions, showing a relative performance improvement of over 600 basis points this year [4] Corporate News - JB Hunt Transport Services Inc. reported a 4% decline in shares after quarterly revenue missed estimates, indicating ongoing weakness in freight demand [5] - Kraft Heinz shares fell 1.1% following a downgrade by Morgan Stanley to underweight [5] - Mosaic's shares dropped 6% due to a significant decline in North American fertilizer demand [5] - PNC Financial Services Group Inc. shares rose 3% after reporting a 9% increase in fourth-quarter revenue, surpassing analysts' expectations [5] - Regions Financial shares fell 4% after reporting lower EPS and total loans than expected, with a forecast of declining net interest income [5] Technology Sector - The Mag 7 stocks are mostly higher in premarket trading, with Nvidia up 0.8% and other tech firms like AMD and Microsoft also showing gains [3] - TSMC's strong earnings and capital expenditure forecast have fueled optimism regarding the AI boom [4] - OpenAI and Microsoft are facing legal challenges over claims related to funding and operational changes [3] Economic Indicators - The first week of the earnings season has seen 89% of the 28 companies reporting so far beating expectations, indicating a positive outlook for the broader economy [9] - US stock funds experienced inflows of $36.5 billion in the week ending January 14, reflecting investor confidence [10] - Yield premiums on corporate debt have narrowed significantly, with a record $435 billion in bonds issued in the first half of January [11] Central Bank Insights - Five regional Fed bank presidents indicated that the central bank is well-positioned to wait for further data before making rate cuts, with no changes expected at the upcoming meeting [12] - Fed officials have expressed a need to maintain a restrictive monetary policy to combat inflation [37] Global Market Trends - European stocks dipped slightly but are on track for their fifth consecutive weekly advance, with health care stocks outperforming [13] - Asian stocks rose, particularly in Taiwan, supported by TSMC's positive outlook for AI demand [15] - The Japanese yen strengthened as Finance Minister Katayama indicated readiness for potential currency intervention [16]

Summary of J.P. Morgan's PC and Server Market Analysis Industry Overview - The analysis focuses on the **PC and server markets**, highlighting trends and forecasts for shipments and demand in the coming years. Key Points on PC Market - **Shipment Growth Forecasts**: - Adjusted global PC shipment growth forecast for 2025 is **+8%**, while a decline of **-9%** is expected in 2026 [1] - **Demand Trends**: - Anticipated downside in PC unit demand due to **memory-driven product price hikes** [1][4] - A significant **20%+ increase** in product prices has been noted recently, impacting consumer PC demand [4] - Forecasts indicate **10%** decline in consumer PC shipments and **7%** decline in commercial PC shipments for 2026 [11] - **Commercial PC Demand**: - Muted refresh demand is expected this year, with a potential pause in demand from **2Q26** onwards [1][11] - **Competition**: - Increased competition in mainstream PCs due to new model launches from major players like **Dell** and **Apple** [4] Key Points on Server Market - **General Server Demand**: - Strong demand from **US Cloud Service Providers (CSPs)** is expected to continue into 2026, particularly for storage servers driven by AI inference activities [4] - Forecasted **30%+ growth** in CSP server shipments, offset by a single-digit decline in enterprise server demand [11] - **AI Server Growth**: - Notable ramp-up in **GB300 server shipments** is expected, with estimates of **50-70k NVL72 rack shipments** this year, driven by strong AI server demand [4] - Anticipated growth in **ASIC server demand**, particularly for TPU servers [4] - **Overall Server Shipment Growth**: - Total server shipment growth forecast for 2026 is **14.6%**, up from previous estimates of **+4.6%** [11] Key Companies Mentioned - **Positive Outlook**: - Companies such as **Wiwynn**, **Hon Hai**, and **Quanta** are favored in the server ODM space [1] - For server components, **ASPEED**, **Delta**, **Jentech**, and **Lotes** are highlighted [1] - **Cautious Outlook**: - Companies like **ASUSTek**, **Micro-Star**, and **Compal** are viewed with caution due to expected challenges in the PC segment [1] Additional Insights - **Memory Component Costs**: - A significant increase in memory component costs is expected, leading to at least **double YoY memory costs** in the upcoming quarters [4] - **Market Dynamics**: - The report indicates a prolonged supercycle in general servers driven by AI demand, with potential risks from component supply constraints [4] This summary encapsulates the critical insights from the J.P. Morgan analysis on the PC and server markets, providing a comprehensive overview of expected trends, challenges, and opportunities within the industry.