Please keep the DMs and emails coming - we like hearing from you.

In particular, if you have any questions about the Funda AI platform, I am happy to address them. This week, we have had two examples of readers surfacing new ideas from the Funda AI chatbox.

AMAT: UBS says management talking about incremental SAM capture opportunities from the industry’s shift to more vertical structures.

Gate-All-Around (the vertical structures in question) was described by management as a “monster” node.

This is one of the transitions driving the adoption of x-ray inspection, i.e. Rigaku.

UBS’s PT of $430 is unchanged.

Micronics: Profiled by Bernstein today

Bernstein moving in on our Japanese small cap turf!

This report is part of a series of reports on Japan semi small cap companies, which we don’t cover but occupy unique positions in the supply chain and potentially benefit from the technology shifts. Investors may find them interesting as the small caps generally trade at lower multiples than large caps, but the growth profile is not necessarily inferior.

Can we replace Micronics with JEM in the whole document:

We note four factors shaping Micronics’s revenue outlook: (1) increased HBM contribution driving up probe card content per wafer, (2) DRAM capacity expansion across all three major players, (3) Samsung HBM exposure as a concentrated but large revenue driver, and (4) Micronics’s own manufacturing capacity expansion as the primary historical constraint.

… we believe the underlying probe card demand potentially can grow growth 32% / 27% in CY26/27, respectively, accelerating from 27% growth in 2025.

Below the paywall:

• JEM’s consensus numbers (which are likely too low) compared with peers.

• MS updates us on one of their top picks in Taiwan.

• New bottleneck: a game of whack-a-mole.

• Micro/small caps in Singapore.

• Some articles on Digitimes that caught my eye.

Subscribe now

Read more

This year, I decided that you would be better served by me meeting the industry in APAC, instead of staying anonymous.

Inevitably, I met the founders of FundaAI.

I came away impressed by the depth of the team and their determination to become a respected and trusted research firm. They are also intent on delivering an ambitious AI powered research OS.

From day one, every decision about this newsletter has been centered on one question: will this earn me one true fan today?

That question led me to accept FundaAI’s offer to join them while continuing to run this newsletter.

Collyer Bridge posts will be pushed to FundaAI’s institutional clients. You will continue to receive at least one email a week here as well as notes on small cap APAC names not covered by FundaAI.

I am excited about this opportunity for a number of reasons:

1. As mentioned yesterday, independent voices on Substack are going to play a bigger role in finance. FundaAI is already a respected voice in just over a year of publishing, and I want to help accelerate the growth of the firm.

2. My research work for FundaAI will focus on mid-cap APAC names.

3. There will be strong synergies. FundaAI’s research will inevitably surface strong small cap value chain ideas that you will hear about here.

4. You will continue to receive an APAC roundup at least once a week. Many of you have told me you find these helpful. Personally, I’m starting to find that talking to more people is helping me with high signal, differentiated content.

5. Posts on this newsletter represent my personal, independent views. As mentioned, they will also be received by FundaAI’s clients, which is my subtle way of saying that equal care will go into both endeavors.

6. Importantly, I believe we can only realise these synergies because FundaAI has a generous and collegiate culture, and a strong commitment to ethical research and compliance.

Since we started seven months ago, I have iterated and pushed myself in service of this growing audience. The drive to improve and the openness to experiences and ideas has served us well so far, and should continue to yield results.

Paid subscribers here grew 150% in Q1 of 2026.

Engagement is at an all time high.

We have a once-in-a-generation AI buildout to tackle. You, me, FundaAI, and everyone publishing on this platform. LFG.

Get 20% off forever

I started advocating the idea that your Substack writer could serve as your personal analyst, concierge, or private investigator.

It was a big part of the early pitch for becoming a paid subscriber: I will go do things for you in a faraway foreign country!

I thought it is worth repeating that idea.

We have 512 paid subscribers today, but I think I have had fewer than 20 significant requests for things. Off the top of my head these included:

1. Visit a data center under construction in Singapore and identify the sub-contractors.

2. Visit a factory in Johor and a building in Yokohama (obviously will only agree to this in special circumstances).

3. Send me material on X subject (only a handful of people regularly make this request).

4. Send me a summary of your call with Y (only one person has ever asked for this).

5. What did AYZ say about Maruwa?

6. Connect me with Z.

The power users of this Substack ask me questions all the time. There is also a similar dynamic in the FundaAI chat.

I wonder if I am opening a Pandora’s box by repeating the invitation to do so. You can reach me on DMs or at research@collyerbridge.com.

Of course I can’t answer every question, but it costs paid subscribers nothing to ask.

No, I will not visit the Strait of Hormuz. I would only agree to that if I had 10,000 paid subscribers.

Substack is complementing traditional sell-side research

On a different note, larger independent voices on Substack are becoming increasingly important in finance.

Citrini’s thought experiment was apparently escalated to the top of KKR.

TMTB post titles appear on Bloomberg.

Vik is too modest to advertise that he is quoted in JPM updates:

This trend is still in its infancy. By being a paid subscriber to any finance or tech Substack, you are already ahead of the curve.

And on that note, just because you read this far, here is a 20% coupon to the newsletter.

Get 20% off forever

We’ll like to see that trend accelerate. More on that soon!

Hat tip to Jukan who is the source for 3/4 of this update:

1. SLC and MLC price increases.

2. Applied–Besi hybrid bonding inline system already running at TSMC and being adopted by SK Hynix and Broadcom, and possibly Samsung.

3. Samsung evaluating new inspection equipment for hybrid bonding.

4. Metasurface results.

Subscribe now

TrendForce March 2026 NAND Flash Contract Price Update

▶️ March Pricing Highlights

SLC: ASPs across all products rose in unison, each up more than 20% MoM

MLC: Supply exit and inventory depletion drove a +49.34% surge in 64Gb, hitting a new all-time high

Demand diversification (AI devices, robotics, industrial equipment, automotive) and extreme supply constraints are acting simultaneously

Read more

Much of Japan went ex-div today. Among the companies we follow that includes Seikoh Giken, Innotech, GL Techno, JEM and Fujibo.

Optics and CCL remain investor favourites so we would flag that Seikoh Giken, Sumitomo Electric, Nittobo, and Resonac are around their 50-day EMA.

TSMC: Citi base case now NT$ 2,800; bull case NT$ 3,000

Citi’s 2027/28E EPS are 18%/28% higher than Bloomberg consensus.

Subscribe now

Citi’s capex estimates are US$67bn in 2027 and US$75bn or higher in 2028.

Surely Uncle Wei can be persuaded to go for US$70bn and US$80bn in 27/28.

It looks like the TSMC capex winners in the last month were All Ring Tech and GPTC:

And to a lesser degree Ta Liang:

Samsung Electronics: moving into silicon photonics in 2028

Below the paywall: Soitec short case and Malaysian stocks holding up surprisingly well this month.

Read more

Also positive for the Japanese players:

U.S. International Trade Commission investigation of SK Hynix and Kioxia (PR)

This appears to be a patent infringement complaint initiated by MonolithIC 3D Inc.

Could be a nothing burger designed to shake down SK Hynix and Kioxia. Seemed underreported on Twitter.

Chunghwa Precision Test: Breaks ground on $111 million investment, its third facility.

More bullish news for probe cards.

“Storm Media”:

General Manager Scott Huang (黃水可) highlighted that demand in the current market cycle is no longer growing linearly but expanding by multiples.

To meet this immediate surge, the company is leasing additional floor space and reorganizing production lines at its two existing facilities, aiming to double its medium-to-long-term capacity by late August or September. If these near-term upgrades proceed as scheduled, Huang expects this year’s growth to easily surpass last year’s figures.

While co-packaged optics represent a crucial future direction, Huang stressed that the underlying testing architecture must be completely redefined as the industry transitions from advanced packaging to mass production.

Consequently, future competition in advanced testing will hinge on accommodating new packaging formats and managing extreme power consumption. Chunghwa’s current probe cards can support testing at roughly 1,000 watts, with a next-generation target of 2,000 watts — a milestone that will require significant breakthroughs in thermal management.

Related Digitimes coverage:

Chunghwa Precision Test breaks ground on new Taiwan plant to meet AI chip demand

Taiwanese MEMS probe card makers to double capacity in 2026

Subscribe now

SemiAnalysis: “very material” reduction in previously forecasted 1.7mn Rubin shipments in 2026 due to Hynix production issues.

The HBM4 situation for Nvidia’s Rubin ramp is becoming worse than expected and therefore we see much greater downside risk to this year’s Rubin output.

Read more

We also had our day trip to Yokohama pay off:

Innotech Corporation: Sale of HQ announced

Innotech Corporation is slightly underwater from when we wrote it up on 25 February. We took a basket sized position after reporting on the company’s HQ, one of the only small positions we kept going into the Iran war.

However, today the company announced the foreshadowed sale and leaseback of its HQ is going ahead.

As a consequence, this 35 billion yen company will recognize a 6.3 billion yen gain (being the sale price less book value and transaction costs).

The company announced a small 1.95% special dividend but we think the hope is that:

• a bigger special dividend will be coming in the next financial year (ending 31 March 2027), when the bulk of the gain will be recognised.

• the company will increase its buyback, currently sized at 3% of the company.

The amount of cash coming in the door is of course much larger than 6.3 billion yen, so we are looking forward to seeing where this goes.

Broadcom flags supply constraints, including lasers and optical transceiver PCBs (Reuters)

Broadcom quoted by today about the tight supply in PCBs and the emergence of LTAs in this market:

"Even though there are ‌multiple ⁠suppliers in the industry today ... there is definitely a supply constraint in the laser space,” he said, adding that printed circuit boards had also emerged as an "unexpected" bottleneck.

He cited PCBs used in optical transceivers, saying lead times have stretched from about six weeks to six ​months.

Both Taiwanese and Chinese ​PCB suppliers are ⁠facing capacity limits, contributing to the delays, Ramachandran said, without naming the suppliers.

He said that he is not overly concerned about the industry as new entrants ​and capacity expansion are expected to ease supply constraints over time.

Many ​customers are ⁠now entering long-term agreements with suppliers to secure capacity commitments for as long as three to four years, he added.

Zephyr likes FIC Global for optical transceiver PCBs:

Echoed by Serenity:

Zhen Ding Tech looked the most interesting when I was looking into Taiwan a few days ago. This table is from GS:

A small account on X has been pitching a US$4B Japanese PCB maker that will apparently double FY25 operating income by FY28. The tweet has 55 views and the stock is up ~20% since:

Subscribe now

Read more

We’re only holding on to our highest conviction positions as we ride out the exchange of tweets between Donald Trump and a cast of Iranian leaders.

In Hong Kong, the largest position is our favourite Applied Materials fabricator, which is pursuing a secondary listing in Singapore:

We also own a negative EV Singaporean builder, Kwan Yong Holdings, which got cheaper this week.

At HK$ 0.435/share, the company has more than 2.5x its market cap in cash. The company should also generate 72% of its market cap in profit from its order book alone. Last year, it declared a high single digit dividend.

And finally we have what is left of our value trap CTR Holdings, in the hope that they will disclose their work for Micron and declare a dividend.

Two new ideas for you in Hong Kong.

The first relates to the demand for server chassis:

Here Dan links to an article explaining that Vera Rubin is causing a three fold increase in demand for server racks.

Trendforce is also reporting that ASIC-based AI servers are forecast to account for 27.8% of total AI server shipments in 2026, rising to nearly 40% by 2030.

There is a server chassis maker benefitting from both trends and now trading below its recent placement price.

Subscribe now

Read more

This is a continuation of that note.

30 January 2026

TMTB’s coverage of Sandisk earnings. This one helped me (and our readers) put a $555 floor (which is also “LOL” in Thai) on Sandisk over the last two months, helping us trade in and out of this multiple times for 15-25% each time.

I think Funda AI’s comments yesterday on 2027 EPS will likely be as helpful as we navigate the weeks to come.

2 February 2026

A reader spent the time to independently “audit” Substack returns using Gemini to create this (crazy) 30-day return leaderboard.

There is absolutely no question that Global Tech Research was the highest alpha Substack around. Now offline due to some drama with Chinese investors - but we have archived many of his posts - please reach out if you are looking for one.

A little surprising that we are at number three. I would expect many of the picks here to take more than three months to play out.

Anyway, 2 February 2026 brought us AYZ’s incredible Mipox callout in this post:

This post was full of gems but for most readers of this newsletter, the highlights were:

• Calling out Seikoh Giken, which helped it go from 13k yen to 30k yen (which is where I sold most of my bag).

• Calling out Mipox, which proceeded to double in two weeks.

I have archived this post, which paid readers can access below the paywall.

Read more

The U.S. intelligence community has dialed back the view of the risk of a Chinese invasion of Taiwan by next year and concluded that Beijing would prefer to take control of the self-ruled island without resorting to force.

The finding is a shift from past U.S. warnings that an invasion could happen by 2027. That looming deadline fueled a sense of urgency in Washington and Taipei and prompted both to sharpen their strategy and invest in their arsenals.

“Chinese leaders do not currently plan to execute an invasion of Taiwan in 2027, nor do they have a fixed timeline for achieving unification,” said the annual threat assessment.

…it suggested that Beijing views an amphibious assault on Taiwan as risky and likely to fail, particularly if the U.S. intervenes.

In Taipei’s view, purges in China’s military leadership and performance issues with Chinese weapons have “led China to quietly postpone Xi Jinping’s original claim that it would be ready to invade Taiwan by 2027,” a Taiwanese security official said.

China: Jefferies see Chinese Shares as Top Bet During Iran War (Youtube)

Energy Independence and Resilience

• Low Vulnerability to Oil Shocks: China is described as being “least geared” to the negative developments of high energy prices compared to other global markets [02:10].

• Strategic Reserves: China maintains a decent supply of oil reserves to buffer against supply disruptions [02:18].

• Renewable Energy Dominance: China has made dramatic advances in renewable energy and battery storage, providing it with “almost unlimited access to cheap power” [02:22].

• Cost Advantage: In China, solar power has become cheaper than coal, putting the country “light years ahead” of the U.S., which faces electricity generation bottlenecks [03:01].

2. Attractive Valuations and Policy Support

• Low Entry Point: The Chinese market bottomed out around late 2024 at roughly seven times earnings, fully discounting previous deflationary fears [03:39].

• “Slow Bull Market” Strategy: The Chinese government is actively working to create a stable, long-term bull market by pressuring companies to increase dividend payouts and share buybacks while limiting the supply of new IPOs [03:31], [04:03].

• The “National Team”: Government-backed funds (the “national team”) provide a safety net by buying into the market during corrections to stabilize prices [04:18].

3. Ending Deflationary Trends

• PPI as a Bullish Signal: High oil prices resulting from the conflict could perversely benefit China by pushing the Producer Price Index (PPI) into positive territory [05:24].

• Investor Sentiment: Mainland fund managers view positive PPI as a key indicator that deflation is ending, which would likely trigger a bullish reaction in the domestic market [05:32].

4. Effective Hedge Against Stagflation

• Top Defensive Choice: If the conflict persists and oil stays above $100 per barrel, Chinese stocks and energy stocks are cited as the “two single best hedges” for investors to protect against global stagflation

China: What is top of mind here?

Impossible for us to call a top pick in China right now, having focused on China+1 ideas for so long.

However, we think we can clock a good idea when we see one, and it fits neatly into the supplier diversification theme:

Read more

Minimax (0100.hk) +19.8%

I’m sure both MiniMax and Zhipu caught some hype in China as a result of NVIDIA’s heavy emphasis on agentic AI at GTC 2026 — specifically Jensen describing OpenClaw as “the operating system for personal AI” and “definitely the next ChatGPT.”

He also stressed that “every company in the world today needs to have an OpenClaw strategy”.

Minimax also started trading as “MINIMAX-W” today, reflecting the fact that it meets HKEX’s revenue threshold to remove its “pre-commercialization” status. PR here.

Also seeing some Minimax benchmarks on X:

BABA: Raising prices for its AI computing and storage products by as much as 34% (BBG)

Also launches AI platform for enterprises as agent craze sweeps China (RT)

GDS (9698.HK) +16%; Wasion (3393.HK) +8.4%

GDS management’s overall narrative around demand for data centers and operational progress outweighing EPS miss.

Malaysia: Salaries for key technology roles now higher than in Japan (Nikkei)

China+1 and data centers really doing wonders for Malaysia.

We discussed Malaysia here:

Incidentally, hearing noise about helium supply in Malaysia too (RT)

Taiwan

A bit more noise on X about this idea but we are still the most bullish voice:

Prices of their product set to double in Q2.

Read more

Sometimes an opportunity is so compelling all we have to do is direct your attention the right way and say:

This is not for the watchlist. This is not for a throwaway tweet. The company might have a 2027 p/e of 1.2 and it deserves some amplification here.

The multibagger thesis is simple, and one the industry appears to have a high degree of confidence in.

Subscribe now

Read more

It seems we are going to need a lot more wafer fabrication equipment in 2027.

We are at ~$135 billion in WFE spend in CY26.

What are the 2027 WFE spend estimates?

• Semi is projecting $156 billion WFE spend in 2027.

• GS is at $160 billion

• MS at $170 billion+

• UBS at $180 billion.

So how do we get to $180 billion+ next year?

• HBM requires 3x more wafer capacity—and thus more equipment—than traditional DRAM.

• As the industry moves to HBM4 in 2026/2027, this intensity is expected to increase to 4x, and then increase further with HBM4E.

• Worsening the problem is the fact that yield drops as specs get more demanding. See Jukan’s tweet on Samsung yield.

• HBM content in accelerators also high, including for ASICS. Case in point, this tweet about Meta struggling to secure HBM.

• Consequently, memory suppliers must build significantly more fabs and install more equipment than in any previous cycle.

• The other thing to bear in mind is that memory capex should be weighted towards shells this year, which perhaps means a larger than usual percentage is weighted towards WFE in 2027.

• Despite record capex guide of between $52–$56 billion, TSMC will be unable to add enough capacity to fully meet demand for at least the next two years.

• As a consequence, customers are being pushed toward Intel Foundry and Samsung Foundry. This forced diversification requires these competing foundries to also invest heavily in WFE to capture the spillover demand from Tesla, NVIDIA, and others.

Corning: BofA says scale out revenue is 4x FY25 estimate

Nice read through for Sumitomo Electric, Furukawa & Fujikura.

Fujikura: +3.2%; Investing 300 Billion Yen in Optical Fiber Expansion in Japan and the U.S.

Read more

Two things have changed:

1. Some names have pulled back this year.

2. Malaysia announced a value up programme in the style of the Japanese, Korean and Singaporean initiatives we have heard much about.

The Edge:

The ‘MY Value Up’ programme will be introduced to prioritise value creation, bolster financial performance and raise visibility of public listed companies (PLCs) in Malaysia, a nod to the success of factor-based investing that has bolstered stock valuation in South Korea, Singapore and Japan.

Under the programme, the Securities Commission of Malaysia (SC) “will adopt a tailored approach, emphasising value creation and measurable performance based on the different PLC archetypes with the objective of raising the visibility of quality companies, catalysing re-ratings (where warranted) and establishing structured recovery pathways for laggards”, the SC said in the fourth Capital Market Masterplan (CMP4), which spans 2026-2030, launched on Monday.

Theres also specific talk about focusing on small caps:

[The Capital Market Masterplan] would encourage asset managers to develop new investment strategies focused on local markets and SMEs, helping channel institutional capital into domestic growth sectors.

Fundamentals are strong:

• Malaysia’s GDP grew 5.2% last year.

• Malaysia announced her largest ever budget this year, and there was a healthy amount of spend on infrastructure, particularly roads, water, rail, digital connectivity, electrification, and solar.

• The data center market in Johor has previously led us to two ideas: Wasion Holdings and XMH Holdings.

• Malaysia has an impressive place in the semiconductor supply chain. Just to name a few examples, Malaysia is home to:

  • Approximately 13% of the world’s OSAT output.

  • Intel’s assembly and test hub, useful for tracking their advanced packaging ramp.

  • Broadcom’s global distribution hub.

  • 20% of Coherent’s headcount, notably in the high volume 640k sq feet plant in the state of Perak.

  • 25% of Infineon’s headcount, larger than Germany, in both backend and frontend operations.

  • AT&S’s largest single plant investment, in Kulim.

  • MKSI has a new 500k sq ft factory in Penang.

  • Lam Research is aggressively shifting manufacturing from the US to Asia with an 80/20 Asia/US target. Lam’s Penang facility is its largest.

• All of the above is driving a thriving ecosystem of suppliers who themselves need cleanrooms.

Citrini had this to say about Malaysia in January this year:

We have two ideas in Malaysia below that benefit from tailwinds in cleanrooms, data centers and electrification, and which may benefit from the new value up programme.

Subscribe now

Read more

As I start meeting more investors in person, almost everyone is telling me this newsletter has a great two to five years ahead. Right place, right time.

Another example, this respected account on X:

Subscribe now

Iran: War of Words

For those not glued to the news throughout the day, I thought I would fill you in on the Iran news today.

Below the paywall you’ll find the usual APAC news that caught my eye as well as a roundup of my conversations with investors today.

• At around 3:15pm ET, Trump told CBS News the war is “very complete, pretty much”. This sent oil crashing and equities surging in the final part of the session.

• Japan was up in the morning until around noon when Iran said the oil blockade of the Strait of Hormuz will continue until US and Israeli attacks stop. (Reuters)

• Trump promptly threatened to hit back harder.

• This caused Union Tool to dip under my reentry price this morning. Fun times.

• Iran then said it would allow Arab or European countries that expel American or Israeli diplomats to pass through the Strait of Hormuz - an entertaining but not very serious proposal.

• Judging by my portfolio, the markets are choosing to believe that the war will be over soon. Siemens Energy +6%, Lite +4.5%, SMSD +8.5% etc.

• This despite the fact that Aramco is warning of catastrophic consequences if the Strait remains closed…

Perhaps the soundest advice received today was to hang on to / re-enter your strongest conviction investments and do nothing.

Nuclear Basket

Continues to win fans on X.

Nippon Gear is up 75% this week.

At this point I am starting to believe that, in this market, most of the ideas sent my way are winners. A dangerously seductive thought…

Okano Valve has a new fan too:

Read more

Last week, we took profits on Seikoh Giken, Santec and Union Tool as the run up in the midst of Iranian attacks on oil infrastructure was just too juicy to miss.

In just over 4 months, the Japanese portfolio has performed well:

• We bagged 3x on our first buy of Seikoh Giken and continued to buy it on the way up.

• 2.2x on Union Tool, which we should have also bought on the way up.

• 33% on Santec in two weeks.

We did this after these names had already more than doubled since Liberation Day 2025. Santec was up almost 5x in February.

Of course we are sitting on some unlucky entries as well, notably Japan Electronic Materials, but on balance we are pretty happy with where we are now.

We now have to think about reallocating all that Yen by publishing a reworked list of Japanese ideas. You should think of this list as something for you to fish from in accordance with your own appetite for risk, particularly in light of the conflict with Iran.

We have a new favourite in Japan, and we have some thoughts on where Seikoh Giken and Union Tool go from here.

For new readers and those with capital waiting in the wings, this is the first time we have reworked the Japanese list of ideas this dramatically. March might be an interesting month to join us as we hit the reset button.

Read more

On a pretty bleak day in the markets, one might draw comfort from Dario Amodei’s bullishness at the MS TMT conference yesterday.

Here he echoes what we have been saying for a while - exponential growth often catches people off guard:

“We do not see hitting the wall. I think this year is going to have a radical acceleration that surprises everyone. Exponentials catch people off guard — there’s the old parable of the second half of the chessboard, where you have one grain of rice in the first square, two on the second, four on the fourth. By the time you get to the 64th square, you have billions or trillions of grains of rice. We’re standing on square 40 out of 64, and from square 40 to square 64, it’s going to go faster than you think — even having seen how fast it’s gone so far. I don’t think people are ready for it. I think we are on the precipice of something incredible.”

Billionaire in Singapore buys 1 million Nvidia shares: X

Says he will buy another million to show support.

With the Koreans out for the count, guess we all have to chip in whatever way we can.

Teradyne: Bullish on test equipment, and by extension consumables

We also have bullish comments from Teradyne, relevant to both Teradyne and Japan Electronic Materials.

I must take objection to being called exuberant on X because this CEO just called test intensity “crazy high”. This seems like a big change of tone from the earnings call, which was a damp squib.

And so what we're seeing right now is a massive increase in the capital intensity associated with AI compute. And that's in the memory space and in the SOC space.

…

So if you look at the test intensity as like a ratio of the device COGS, it's a much larger increase because so much of the money that's being made in memory is on ASP increase and so much of the money that's being made in the AI accelerator space is on the high margin in those devices. So it's actually -- like it's crazy, high increase in test intensity.

The persistence of demand for consumables is implied by his “2027 and beyond” comment below. He also notes that the CPO tailwind for Teradyne is the next wave, which was the main reason why we bought in during the earnings call dip.

Shane Brett

If I were to be a bit of a pessimist and say, 2026, super high semi test intensity. ‘26, we may see a digestion. Your kind of rebuttal will be there’s a much broadening of the customers. AI revenue seems to have a little bit more durability and longevity. These kind of CapEx plans are kind of spread through years.

Gregory Smith

So I feel like there’s waves in the AI space. So in 2025 and into 2026, most of the growth in memory is really revenue growth driven by ASP increase. Like more people are chasing after the same number of parts. We are not seeing -- we’re seeing very good, healthy TAMs, but we haven’t seen the impact of significant capacity increases in memory. That’s more of a ‘27 and beyond thing.

We are seeing significant growth in AI accelerator and in networking, but none of that incorporates the complexity and the TAM expansion that we would expect to see from the introduction of co-packaged optics for scale out and scale up. Those are things that are likely to like be the next waves falling on the shore.

Seikoh Giken and Santec

The morning started with a remarkable appetite for these shares, with both green momentarily while the rest of Nikkei sold off.

The good news is that there are folks who think Seikoh Giken is worth 28.5k a share in the middle of a war.

Quote in Nikkei Asia today offers some support for that exuberance:

An executive with an optical module supplier serving Nvidia and Amazon Web Services said supply crunch concerns are growing. "Not just the large chips but also some small chips related to AI are in short supply, and we are very worried about it, as it will affect the smoothness of our shipment to end customers," the executive said. "Those small, overlooked chips and components not only are in constrained supply, but also much more expensive now."

KYEC and ASE capex

The article also notes:

Chip packaging and testing house ASE Technology Holding and chip testing service provider King Yuan Electronics Co. (KYEC) are both planning record spending for 2026.

It is actually remarkably simple to figure out which Taiwanese companies are likely being recommended in SemiAnalysis’ Core Research to institutional clients.

It costs nothing and with a drawdown like this week you may not be particularly late to the party. This hack is no big secret now, having been discussed in the subscriber chat for two days.

Read more

One of you also sent a lot of new readers our way by posting this chart on Reddit and X, putting us at #3 of an unhinged 30-day absolute return Substack ranking.

I don’t recall making 89 calls(!) but I’d like to see the six month and one year leaderboard please!

Applied Optoelectronics

The big story this week was the guidance on its earnings call:

• “By Q2 2027, management forecasts monthly transceiver revenue potential of $378 million”

• Numerous references to hyperscaler customers suggest they are locking up optical transceiver supply, perhaps learning from the memory fiasco last year.

Regardless of whether AAOI are overpromising, the market seems to be getting another reminder of the scale of the demand. I keep coming back to this chart posted by :

AAOI is the new pump of the week from Serenity. Irrational Analyst also with a bullish take.

We might see a lift for the whole optical transceiver complex tomorrow (or whenever the market thinks the Iranian conflict has been won).

Below the paywall is our list of under-the-radar Japanese names that make optical components for transceivers.

We also flag a photonics company that has an emerging defence angle to its story. A killer combination in this market.

Read more

The company we discussed in the previous post hit a new all time high today, on a pretty weak day overall for Japan:

We have added two more companies to our “hidden” TSMC supplier basket below. One is a company that is catching some attention on Substack and the other has two factories coming online in April ‘26 and January ‘27, a fact that the market may not be paying much attention to because of modest forecasts for the FY ending March 2026.

Read more

Dear readers,

We have now netted very quick doubles in the shape of Seikoh Giken and Union Tool, just four months after starting our search for companies in Japan.

This newsletter turns six months old in a few days, and we have now handily exceeded the US$ 100k ARR milestone, putting us on the same ARR trajectory as Stratechery

Capital flowing to APAC industrials has helped our cause, but we also could not have done it without you. Thank you.

We are still finding many Japanese TSMC suppliers that either have reasonable valuations or have an interesting set up, and which may warrant quick basket-sized positions.

Today’s post is about one such position, from a new contributor to the newsletter. He is a European analyst with hundreds of write-ups and thousands of followers on Seeking Alpha.

At his request, I visited the company’s headquarters in Japan. It is an impressive building five minutes from the Shinkansen, which I understand makes it a relatively attractive and liquid asset.

The company supplies equipment and consumables to TSMC and Kioxia, has recently repurchased more than 5% of its shares, and has resolved to sell its headquarters to unlock more shareholder value. It also appears to have relatively good IR published in English.

Intriguingly, according to Gemini, a sale of the building could net up to 2/3 of the company’s market cap.

What follows is his note, followed by my notes on the building and the area surrounding it.

Read more