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NVIDIA is ramping up capacity together with its supply chain: substrate capacity will be expanded to 2.5 times the current level over the next three years (supported by Samsung Electro-Mechanics and Unimicron). Amkor will expand its advanced packaging capacity by more than 300% by end-2028. KYEC has secured an USD 1.1 billion prepayment to build a fab in the US. Semiconductor testing capacity is set to double in 2026–2027, with a new Singapore fab entering mass production in February 2027. Packaging, substrates and testing are clearly identified as the tightest bottlenecks for AI computing power.
Google Cloud and NVIDIA’s Vera Rubin infrastructure has gone live commercially, supporting deployment of up to 960,000 Rubin GPUs. Amazon plans to take delivery of approximately USD 5 billion worth of GB300 racks ahead of schedule and commit additional purchases of USD 3 billion per month.
TrendForce forecasts DRAM contract prices will rise roughly another 20% quarter-on-quarter in Q4 (following ~80% in Q2 and ~40% in Q3). Gains are moderating but remain elevated. Montage Technology guides Q3 net profit growth of 154%–175%.
TSMC’s 2nm process has confirmed 15 customers; Apple has locked in more than half of the initial capacity, with monthly output targeting 120,000 wafers by year-end. Samsung’s 2nm contract pipeline is behind schedule, while its 4nm line is fully loaded, prompting the firm to shift focus to 5nm.
CoreAiotek has closed an over RMB 1 billion Series A2 financing round (with Shenghong Technology and Rockchip as participants). Total external capital raised exceeds RMB 5 billion, to fund capacity expansion for AI and chiplet packaging substrates.
In-depth Analysis
Optical Communications & Optical Chips: Shanghai Securities News reported on October 22 that amid expanding AI infrastructure, 800G optical modules will become the mainstream shipment volume, while 1.6T shipments are rising rapidly. Order visibility for customers has extended from 3 months to 2027, and some overseas customers have locked in capacity as far out as 2030. At the Global Optical Fiber and Cable Conference held in Wuhan on October 19, the world’s first international standard, Technical Requirements for Weakly Coupled Single-Mode Multi-Core Optical Fibers for Telecommunications, was released, paving the way for high-speed optical interconnection and multi-dimensional multiplexing systems in AI data centers. The CPO and optical component sectors rebounded; Tianyang New Materials secured two daily limit-ups within three trading days.
Advanced Packaging & Testing:NVIDIA’s three-year plan to scale substrate capacity to 2.5× the current level is being executed by Samsung Electro-Mechanics and Unimicron. Amkor will expand its advanced packaging capacity by over 300% by end-2028. KYEC has received an USD 1.1 billion prepayment to build a test facility in the United States. CoreAiotek serves AI computing, optical communication and high-end memory clients. Its revenue CAGR over the past three years exceeds 300%, with more than 160 licensed patents (90% being invention patents). Its products target packaging substrates for the 2nm node. No new price quotes for ABF films and substrates were released today, yet tight supply of high-end substrates persists. Domestic materials still face a 1–3 year qualification cycle.
SiC & Power Semiconductors:No major updates today. The sector is undergoing high-level consolidation after Q3 earnings releases, lacking near-term catalysts. Over the medium term, focus on the ramp of 8-inch SiC capacity and adoption progress for AIDC power supply solutions (800V HVDC, solid-state transformers).
Memory & Compute Chips: SK Hynix completed a KRW 40 trillion share buyback (24.07 million shares, accounting for 3.3% of total shares outstanding) and cancelled all repurchased shares, marking the largest share cancellation in South Korea’s history. ChangXin Memory Technologies stated the DRAM industry will deliver a CAGR of 38.39% from 2025 to 2030. Its Hefei and Beijing fabs are running at full capacity with robust order backlogs. Interconnect chips contribute 98.46% of Montage Technology’s revenue.
Equipment & Materials: Chuanchuan Technology guided Jan–Sep net profit of RMB 1.715–1.815 billion (+98%–110% YoY), with Q3 net profit up 22%–39% quarter-on-quarter. Guangli Technology posted a 259.8% YoY jump in net profit for the first three quarters. Effective October 1, JSR, Tokyo Ohka Kogyo and Shin-Etsu raised prices for new photoresist orders by roughly 15%. Prices for high-end ArF long-term agreements climbed 16%–22%, and immersion ArF for HBM rose around 24%. Lead times have stretched from 1–2 months to 6–8 months, while domestic qualification cycles have shortened to 6–12 months.
Wafer Foundry: TSMC’s 2nm process entered mass production in Q4 2025, targeting a monthly output of 120,000 wafers by year-end. Samsung’s 4nm line is near full utilization and the firm is pushing its 5nm offering. For 2nm, yield, power efficiency and IP validation remain incomplete, lengthening the cycle from customer signing to mass production.
Policy & Macro:On October 21, the Foreign Ministry commented on Japan’s insufficient yttrium stockpiles, stating export controls to Japan are implemented in accordance with laws and regulations. The US instructed federal agencies to discontinue use of DeepSeek, and the Ministry of Commerce said China will take necessary measures. MIIT called for accelerated expansion and quality upgrading of computing infrastructure. The Philadelphia Semiconductor Index (SOX) rose 2% to 11,524 on October 21; South Korea’s KOSPI gained 3.29%, with Samsung Electronics +5.67% and SK Hynix +5.8%.
Daily Investment Tips
1. The bottleneck of AI capacity expansion has shifted from wafers to substrates, packaging and testing. NVIDIA’s upstream capacity locking means the shortage of high-end ABF substrates, TCB bonding and test equipment will remain unresolved before 2027, benefiting substrate and packaging/test equipment vendors that have passed qualification by overseas clients. The risk lies in price pass-through to end markets. If demand is destroyed by pricing in 2027, aggressive capacity expansion may eventually turn into oversupply.
2.The quarter-on-quarter gain in memory contract prices has narrowed sequentially from 80% to 40% and then to 20%. Module makers face rising risks of lower QoQ profitability in Q4. It is necessary to differentiate two categories of names: memory fabs, HBM and enterprise SSD players versus module vendors and niche memory suppliers. The view that tight supply will last into 2028 remains unchanged, yet stock prices have largely priced in this consensus; watch out for expectation gaps.
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