APAC Wrap: 3 July 2026
Kioxia
Remarkable 23% swing from the low today.
Kioxia announced the production of 10th Gen 3D Flash at Kitakami 2 today as well as the shipping of samples to customers.
I understand UBS also published a note forecasting 28%/11% ASP increase in Q3/Q4 ‘26.
Perhaps more important was the slew of notes defending Meta Cloud, which seemed to outweigh the Reuters report today of Meta’s townhall:
In a very quick response to the original Bloomberg article, Funda framed Meta Cloud as the capex cycle maturing and Meta placing different GPU generations into their best-fit economic uses, noting that it is not contradictory to lease out older accelerators while renting new ones for continued frontier model training.
That view seemed to gain traction. Remarkably, UBS’s report of feedback from clients seemed to repeat Funda’s take:
Relying solely on Meta’s move to lease out is not enough to determine the overbuild. Leasing out and continuously expanding capacity can happen same time (e.g. XAI). XAI is both leasing out GPUs and also expanding new generations of computing clusters. Meta itself also raise 2026 capex budget and has signed long term purchase agreement with NVDA through 2030s. underlying logic could relate to High-end new GPUs (such as GB300) are prioritized for internal use in cutting-edge large model training; previous-generationH100/H200 GPUs are used for inference, fine-tuning, and training small to medium models, and are leased out during idle periods to maximize resource utilization.
SemiAnalysis argues that Meta’s capacity under construction just keeps accelerating, and that 2027 capex will be “shockingly high”.
Alexandr Wang responded to some of the reports, and this one caught my eye:
Jefferies struck a bullish note: “Overbuild narrative is backward: META is late to AMZN’s AWS playbook, monetizing excess compute to lift utilization, improve ROIC, and boost CF to fund more, not less, capex.”
MS were more measured, expressing caution on whether Meta could pivot to a “full functioning hyperscale business with an API/suite of models and tools”.
Sumco +11%
We first flagged Sumco on 8 May after investors started discussing a tightening silicon wafer market.
We flagged Sumco again mid-week as it jumped 17% and has now followed through with another 11% to close out a strong week:
Today might have been helped by a note from Citi flagging this exchange:
Shin-Etsu Shareholders’ Meeting Q&A
Regarding silicon wafers, how do you distinguish between AI-related fields and other fields? Also, according to analysts, demand forecasts for semiconductors at the beginning of this year and up until around April predicted a correction phase from the second half of this fiscal year onward, but this has now changed. Does the company feel that demand is stronger than previously forecasted as of June?
In the case of silicon wafers, our users are divided into various types, such as customers who specialize in memory or customers who specialize in analog ICs for automobiles. We don't know exactly what percentage of the silicon wafers we sell are used in what applications, but by looking at the business activities of our silicon wafer customers and conducting sales interviews, we are able to make forecasts and estimates of how much silicon wafer is needed in each field. Currently, the proportion of silicon wafers used for AI has risen considerably to 20 to 30 percent. Regarding the second question, in January and February of this year, we expected moderate growth in electronic materials in general, but for silicon wafers, for example, there were still many customers with large inventories, and the prevailing opinion was that demand would not grow that much. However, from around May and June, the AI market has been stronger than expected, and as customers have had to produce more semiconductor chips, they have looked into various materials and have come to realize that the next two years will be tough. Demand for silicon wafers is increasing from May to June. We will examine how much it will grow in the second half of the year and what the outlook is for next year, but relatively speaking, we have the feeling that it is moving upward compared to our forecast at the beginning of the year
As we flagged on 8 May, Arista was already calling out a wafer shortage on their last earnings call.
Citi inteprets Shin-Etsu’s comments to mean that a growing number of customers are worried about the possibility of a wafer shortage in 2027 and 2028, and speculate that LTA negotiations are proceeding in Shin-Etsu’s favour.
Nan Ya Plastics
A favourite in the Collyer Bridge chat, this also closed out a strong week: