Zero One Investment Research Weekly Intelligence Brief, Week ending October 31, 2026

Top Market Signals

SK hynix sells out its memory through 2029... and memory costs now cut Intel's PC outlook

SK hynix (000660 KS) said its DRAM and HBM (high-bandwidth memory, the stacked memory beside AI chips) capacity is effectively sold out through 2029, after its 28 Oct results. Customers are asking for more than twice what it can supply. Long-term agreements with 14 core customers already cover more than half of its 2027 and 2028 capacity. Its average DRAM price rose more than 25% QoQ in 3Q26, and operating margin reached 80%. Samsung Electronics (005930 KS) said its 2027 HBM supply is sold out.

Buyers want even longer terms. Alibaba (9988 HK), Tencent (700 HK) and ByteDance asked Samsung and SK hynix for server memory contracts running to 2035, Maeil Business Newspaper reported. Supply agreements usually run three to five years.

The cost now lands on PCs. Intel (INTC US) guided 4Q26 below expectations because memory prices are cutting PC demand, and it will move capacity from Panther Lake laptop chips to Granite Rapids data center CPUs, CFO David Zinsner said on 29 Oct. He does not expect memory supply to improve in 2027. Intel's low-cost Wildcat Lake laptop chips are sold out as buyers move to the cheapest machines.

In our view, the contracts lock in memory makers' volumes for 2027 and 2028, so the pressure in this cycle sits with the companies paying for the memory. Demand that Samsung and SK hynix turn away falls to Taiwan's Nanya (2408 TT) and Winbond (2344 TT).

Linked stocks: 000660 KS, 005930 KS, INTC US, 2408 TT

Google's TPUs take half of Anthropic's US$807bn compute plan... and Amazon will sell its chips too

Anthropic's IPO filing commits about US$807bn to compute, and US$401-426bn of it is tied to the tensor processing units (TPUs) of Google (GOOGL US), Economic Daily News reported. NVIDIA (NVDA US) GPUs take about a third, up to US$251bn. Most of the TPU commitment cannot be cancelled.

More buyers followed. OpenAI plans to buy TPUs, The Information reported, and Oracle (ORCL US) will offer them in its cloud beside an expanded NVIDIA deal. On 29 Oct Amazon (AMZN US) CEO Andy Jassy said Trainium, its in-house AI chip, will be available outside AWS by end-2027 because customers kept asking for it.

In our view, the move to custom chips is good news for Taiwan whichever chip wins. Brokers say TSMC (2330 TT) makes the chips for all of Anthropic's contracts, MediaTek (2454 TT) co-designs Google's TPUs, and Foxconn (2317 TT) and Inventec (2356 TT) now build complete TPU racks. NVIDIA now has two cloud providers selling their own chips to its buyers.

Linked stocks: GOOGL US, 2330 TT, 2454 TT, NVDA US

Key US tech earnings wrap... cloud grew up to 102% as AI spending moved to bond and equity markets

Cloud demand kept growing. Google Cloud revenue rose 102.6% in the September quarter. Microsoft (MSFT US) Azure grew 48% and AWS 39%, AWS's fastest since 2021. Microsoft's capex of US$45.2bn came in below its own forecast because some third-party capacity arrived late, and CFO Amy Hood expects more than US$50bn this quarter.

Cash flow no longer covers the spending. Alphabet burned US$9.07bn of cash in 3Q26. Amazon's free cash flow over the 12 months to September was negative US$42.4bn, and Jassy said 2027 capex will rise significantly from 2026.

So the money now comes from markets. Meta Platforms (META US) is raising up to US$95bn of new shares, and NVIDIA, AMD (AMD US) and Broadcom (AVGO US) will buy up to US$5bn of them. Microsoft, the one large cloud provider still generating cash, is selling about US$25bn of bonds, its first US bond sale since 2017. Broadcom arranged US$63bn to finance the chips Anthropic uses, and SpaceX raised US$40bn of debt for NVIDIA GPUs arriving in 1H27.

Chip sellers are also standing behind their buyers. NVIDIA is in talks to provide credit guarantees for an Nscale data center planned for Anthropic, Bloomberg reported. Elon Musk said debt markets have almost fully cut off companies without substantial revenue.

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

ASE lifts capex a third time to US$11.5bn... buildings now limit Taiwan's packaging build

ASE Technology (3711 TT) raised its 2026 capex for the third time, to US$11.5bn from US$10.5bn, on its 29 Oct call, and half of the extra US$1bn goes to buildings. It has 22 plant projects underway in Taiwan and is looking for existing buildings to buy. CFO Joseph Tung said capacity still cannot meet demand.

TSMC (2330 TT) is buying buildings too. AUO (2409 TT) confirmed on 29 Oct it will sell two Taichung panel fabs to TSMC for NT$38.8bn. The fabs sit next to TSMC's Fab 15, and a finished building shortens the time to add CoWoS, the advanced packaging that places AI chips beside their memory. TSMC is weighing CoWoS price increases of up to 20%, Commercial Times reported.

The revenue is arriving. ASE expects full-process CoWoS sales to rise from about US$300m in 2026 to more than US$1bn in 2027. Unimicron (3037 TT) ordered NT$50.9bn more long-lead tools on 27 Oct, after its chairman said some equipment lead times run to 30 months.

Linked stocks: 3711 TT, 2330 TT, 2409 TT, 3037 TT

UMC plans 10% higher prices for 2027... Samsung Electro-Mechanics seeks long contracts with 50 customers

United Microelectronics (2303 TT), or UMC, expects its average selling price to rise about 10% in 2027, CEO Jason Wang said on 28 Oct. Utilization reached 92% in 3Q26 and several 12-inch fabs are full. Its main new capacity arrives from end-2028, so 2027 growth comes from price. Powerchip (6770 TT) set 10-20% increases the week before.

Capacitors are moving the same way. Samsung Electro-Mechanics (009150 KS) is negotiating long-term contracts with 50 customers for multilayer ceramic capacitors (MLCC), the tiny parts that steady power on every circuit board. It expects AI server demand for them in 2027 to reach about eight times 2026. Yageo (2327 TT) expects utilization above 95% in 4Q26, with orders running at more than twice its shipments.

Elite Material (2383 TT), the largest maker of copper-clad laminate, the base material of circuit boards, will spend NT$98.6bn from 2027 to 2030 to more than double capacity. It expects to sell everything it makes for the next year.

Linked stocks: 2303 TT, 009150 KS, 2327 TT, 2383 TT

Marvell in talks for a record US$83bn Lumentum deal... lasers are the short part of optics

Marvell Technology (MRVL US) is in talks to buy Lumentum (LITE US), the maker of the lasers inside AI data center optical links, Bloomberg reported, and a deal could be announced as soon as next week. At about US$83bn, it would be the largest technology acquisition, ahead of Microsoft's US$69bn purchase of Activision Blizzard. No agreement has been signed.

Together they could sell a complete set for co-packaged optics, which puts the optical parts beside the switch chip. Broadcom (AVGO US) already sells one.

Laser supply is short at the base material. Indium phosphide, the material optical lasers are built on, is more than 30% short, and Visual Photonics Epitaxy (2455 TT) said it lacks the material, not the orders. LandMark Optoelectronics (3081 TT) said customers now order six months or more ahead. As Lumentum moves capacity from light detectors to lasers, Taiwan's Ding Yuan (2426 TT) is taking the detector orders.

Linked stocks: MRVL US, LITE US, 3081 TT, 2455 TT