Zero One Investment Research Weekly Intelligence Brief, Week ending October 24, 2026

Top Market Signals

NVIDIA prepays KYEC US$1.1bn and asks SPIL for 15 times optical capacity

NVIDIA (NVDA US) will pay King Yuan Electronics (2449 TT), known as KYEC, a US$1.1bn prepayment to reserve test capacity at a US plant that targets volume production in April 2027. Neither company disclosed the amount when KYEC signed the agreement on 13 Oct. NVIDIA expects its total chip test capacity to double in 2027.

The optical deal carries the largest multiple. SPIL, the packaging unit of ASE Technology (3711 TT), will raise capacity for the optical engines used in co-packaged optics to 15 times today by mid-2027, and double it again by end-2028, NVIDIA said at GTC Berlin on 21 Oct. Co-packaged optics put the light-signal parts inside the switch package, next to the chip. NVIDIA gave no starting volume, so the multiple shows direction, not size.

Substrates, the boards that connect a chip to the server, get the same treatment. NVIDIA plans 2.5 times today's substrate capacity within three years. Unimicron (3037 TT) adds Taiwan capacity from 2Q27 under a reservation, and Ibiden (4062 JT) is tripling its Ono plant on a prepayment. Liberty Times reported that NVIDIA has reserved Kinsus (3189 TT) capacity through 2030.

The contracts are spreading beyond NVIDIA. Samsung Electro-Mechanics (009150 KS) has signed KRW4.3tn of long-term orders in five months, now including memory package substrates from 2027.

Linked stocks: NVDA US, 2449 TT, 3711 TT, 3037 TT

Unimicron sees a 20% gap in substrate materials as AI boards grow

Unimicron (3037 TT) chairman S.C. Chien said some key IC substrate materials could be about 20% short of demand in 2027, speaking at the TPCA Show in Taipei on 20 Oct. T-glass fiber cloth, copper clad laminate and ABF film all remain tight, and lead times on some equipment run to 30 months.

The boards are growing faster than the material supply. Chien said an AI chip substrate was 3 times standard size in 2025 and should reach 9 times in 2027-28. A larger board uses more of every material, so the same supply covers fewer chips.

Suppliers are planning for years of it. ITEQ (6213 TT), a laminate maker, plans about 60% more monthly capacity by end-2029 and said getting enough raw material is its biggest challenge. Zhen Ding (4958 TT) has 22 plants under construction and has passed most material costs on to customers.

NVIDIA's agreements pay for plant capacity and do not address these materials. Chien said the size of the 2027 gap depends on how demand develops.

Linked stocks: 3037 TT, 6213 TT, 4958 TT, 3189 TT

Lam Research sees 2027 chip tool spending above US$200bn, limited by cleanrooms

Lam Research (LRCX US) expects wafer fab equipment spending, the industry's purchases of chipmaking tools, to pass US$200bn in 2027, and said cleanroom space and component supply are becoming bottlenecks. Revenue for the quarter ended 27 Sep rose 54.4% YoY to a record US$8.22bn.

Two of the largest toolmakers now describe their own supply as the limit. ASML's (ASML NA) CEO said the previous week that the capacity it planned for 2027 and 2028 may not fully meet demand.

Construction is the same constraint at TSMC. TSMC (2330 TT) paused steel structure work at all of its new Taiwan fab sites after four contractor workers died in an accident at its Kaohsiung F22 Phase 4 site on 20 Oct. Kaohsiung is one of TSMC's 2nm production bases, and TSMC expects its 2nm capacity to more than double in 2027.

Japan approved a change to TSMC's second Kumamoto fab so that it will make 3nm chips from the end of 2028, with equipment investment above US$23bn.

Linked stocks: LRCX US, ASML NA, 2330 TT, AMAT US

Amazon buys US$3bn of NVIDIA racks a month that wait for power

Amazon (AMZN US) expects to take in about US$3bn a month of NVIDIA (NVDA US) GB300 rack systems, and many sit in warehouses because AWS data centers are short of power, Business Insider reported citing internal documents. Amazon said deploying equipment ahead of power is normal industry practice. Its trailing 12-month free cash flow was negative US$7.6bn as of 2Q26.

Meta's spending also passed its cash flow. Meta Platforms (META US) raised the low end of its 2026 capex guide to US$135bn and posted negative free cash flow of US$2.12bn, its first negative quarter since listing. It will create nonvoting Class C shares in January 2027 that it can use to raise capital without affecting Mark Zuckerberg's voting control.

The orders behind that spending kept growing. SpaceX plans up to 20GW of data center capacity by end-2027, from 1.7GW at the end of 3Q26. Super Micro (SMCI US) raised its September-quarter revenue guide by about 27% at the midpoint and lifted its gross margin guide to 12-12.5%. Anthropic is in talks for a second compute contract of up to US$45bn at the West Virginia campus of Nscale, the NVIDIA-backed developer, where Microsoft (MSFT US) gave up its space.

Linked stocks: AMZN US, META US, NVDA US, SMCI US

Powerchip plans 10% to 20% higher prices on older chip nodes in 2027

Powerchip Semiconductor Manufacturing (6770 TT), or PSMC, plans to raise mature-node foundry prices by another 10% to 20% in 2027 and will give capacity priority to customers on long-term agreements, management said on its 21 Oct call. Mature nodes are older, larger processes such as 28nm to 90nm.

Price did the work in 3Q26. Gross margin rose 19.3 points QoQ to 47.6% while wafer shipments fell about 1.4%.

AI servers, not phones, are filling these lines. Research firm Sigmaintell put mature-node utilization at 91% and expects 8-inch and 12-inch prices to rise 4% to 8% QoQ in 1Q27. UMC (2303 TT) said its 3Q26 utilization rose above 90%.

The same demand shows up in US analog chips. Texas Instruments (TXN US) said its 3Q26 data center revenue nearly doubled, and that analog chip supply remains tight.

Linked stocks: 6770 TT, 2303 TT, 5347 TT, TXN US

NVIDIA moves all three AI memory makers' base chips to TSMC 3nm

NVIDIA (NVDA US) has asked Samsung Electronics (005930 KS), SK hynix (000660 KS) and Micron (MU US) to make the base die of its custom high-bandwidth memory on TSMC's (2330 TT) 3nm process, Korean media reported. The base die is the logic chip at the bottom of the memory stack. Samsung, which had made both dies itself, accepted after an internal review.

3nm was already TSMC's largest node, at 33% of 3Q26 wafer revenue. Samsung is also moving a large share of its full 4nm foundry capacity to these base dies, TheElec reported.

Micron ruled out the denser cell design that unsettled memory stocks. Micron's chief technology officer Scott DeBoer said on 21 Oct that it will not pursue 4F² DRAM, a cell design about 33% smaller, and will move to 3D DRAM instead. CXMT, China's largest DRAM maker, plans 4F² products by year-end without access to ASML's EUV tools, which DeBoer said either design needs.

Apple (AAPL US) and Tesla have cited CXMT to press Samsung and SK hynix on price. CXMT held only about 7% of DRAM revenue in 1H26, at prices close to the three leaders.

Linked stocks: 2330 TT, 005930 KS, 000660 KS, MU US

Meta runs Google's AI chips as Google plans up to 960,000 NVIDIA GPUs

Meta Platforms (META US) is running AI inference in production on Google's (GOOGL US) TPU chips, through new software that runs Meta's PyTorch code on them directly, Google said. The footprint is likely small next to the NVIDIA (NVDA US) and AMD servers Meta keeps buying, and Google Cloud said it will deploy up to 960,000 NVIDIA Rubin GPUs.

Amazon (AMZN US) released TorchNeuron, which moves PyTorch apps to its Trainium chip with a one-line change; Amazon says about 85% of AI apps are written in PyTorch. Both tools let code written for NVIDIA run on another company's chip unchanged.

Linked stocks: META US, GOOGL US, AMZN US, NVDA US