A super-invincible spiral explosion, and a rekindling of semiconductor cattle

Original Odaily Daily@OdailyChinaI'm not sure

By Azuma@azuma ethI'm not sure

IN THE EARLY MORNING HOURS OF JUNE 25, BEIJING TIME, THE FAMOUS Q3 FISCAL YEAR 2026 FISCAL YEAR NEWSPAPER WAS OFFICIALLY RELEASED。

Before the release of this season's financial paper, Mi-shin faced a slightly more embarrassing situation. On the one hand, everyone knows that it will hand over a beautiful report card. On the other hand, everyone knows that the market has already precalculated this “pretty” into stock prices。

OVER THE PAST FEW WEEKS, MARKET PLAYERS HAVE BEEN PLAYING AROUND ALMOST THE SAME ISSUE -- HOW MUCH MORE IS NEEDED FOR A STORAGE GIANT THAT IS ALREADY STANDING AT THE HEART OF THE AI WAVE TO CONTINUE TO PUSH ITS STOCK PRICES UP AND INSTIL CONFIDENCE IN A SEMICONDUCTOR CATTLE MARKET THAT IS ALREADY INSANE ENOUGH

The answer is more exaggerating than everyone expected

The market is radical enough, but still conservative

THIS MORNING'S Q3 FINANCIAL REPORT SHOWS THAT THERE IS NO EVIDENCE OF THISTHE THIRD QUARTER OF AMERICAN LIGHTS EARNED $41,456 MILLION (THE MARKET-WIDE FORECAST IS ABOUT $35.4 BILLION), AN INCREASE OF 346 PER CENT OVER THE SAME PERIOD; THE GAAP NET PROFIT OF $28,244.3 MILLION, A NEARLY 15-FOLD INCREASE OVER THE SAME PERIOD; AND THE ADJUSTED EARNINGS PER SHARE OF $25.11。

More exaggerating is the next quarterly guidelines。THE Q4 HARVEST IS PROJECTED TO REACH $50 BILLION (UP AND DOWN $1 BILLION), WELL ABOVE THE MARKET ' S PREVIOUS EXPECTATIONS OF $42.9 BILLION, AND GOLDMAN SACHS ' RADICAL EXPECTATIONS OF $48.8 BILLION (GENERALLY CONSIDERED THE MOST OPTIMISTIC SCENARIO); Māori rates are expected to be about 86 per cent in the fourth quarter, with each share expected to yield around $31。

That's why many investors do the same thing the first time they publish the financial paper, which is called a super-invincible spiral explosion

FROM HBM TO SSD, THE WHOLE VAULT IS RUNNING

THE ANSWER IS, OF COURSE, AI IF WE ARE TO FIND A CENTRAL DRIVER FOR THIS ROUND OF GROWTH. BUT ONE OF THE MORE INTERESTING THINGS ABOUT THIS FINANCIAL PAPER THAN HBM, WHICH HAS BEEN DISCUSSED REPEATEDLY IN THE MARKET OVER THE PAST YEAR, IS THAT THE IMPACT OF AI HAS BEGUN TO SPREAD THROUGHOUT THE CHAIN OF STORAGE INDUSTRIES。

In terms of business structure, almost all of America's core business is growing simultaneouslyOf which:

• The cloud memory operations account for $13.37 billion, an increase of over 300 per cent over the same period
• The core data centre operations account for $11.52 billion, an increase of over 600 per cent over the same period
• DATA CENTRE SSD REVENUE BREAKTHROUGH OF $5 BILLION
• Movement and client operations increased by more than 250 per cent each year
• Automobiles are growing by over 300 per cent as well as embedded business
• All lines of business are generally at 80% or higher。

THIS MEANS THAT THE CURRENT ROUND OF THE AI WAVE HAS BROUGHT MORE THAN JUST A SINGLE PRODUCT, BUT A FULL BENEFIT TO THE ENTIRE CHAIN OF STORAGE INDUSTRIES。

ON THE ONE HAND, HBM REMAINS THE MOST DIRECT BENEFICIARY. IT'S NOT LIKE IT'S A GOOD IDEAHBM4 HAS BEEN SHIPPED TO CORE CLIENTS IN BULK AND SAMPLES HAVE BEEN SENT TO MULTIPLE END CUSTOMERS; HBM4E IS ADVANCING AS PLANNED AND IS EXPECTED TO ENTER PRODUCTION BY 2027I DON'T KNOW. AT THE SAME TIME, THE COMPANY REITERATED THAT IN 2026 THE HBM CAPACITY HAD BEEN FULLY SOLD OUT。

ON THE OTHER HAND, THE CONTINUOUS EXPANSION OF AI TRAINING AND REASONING NEEDS IS ALSO SYNCHRONIZED WITH THE GROWTH OF HIGH-END DRAM, ENTERPRISE-LEVEL SSD AND NAND PRODUCTS。AS MORE AND MORE ADVANCED PRODUCTION IS ASSIGNED PRIORITY TO HBM, THE SUPPLY OF TRADITIONAL DRAM AND NAND MARKETS IS FURTHER TIGHTENED, THUS FACILITATING THE ENTIRE STORAGE MARKET INTO THE STRONGEST PRICING CYCLES IN RECENT YEARS。

This is also why beauty is still very optimistic about industry prospects. The management expects thatSUPPLY AND DEMAND STRESS IN THE DRAM AND NAND MARKETS WILL CONTINUE BEYOND 2027。IN OTHER WORDS, IN BEAUTY LIGHT, THE CURRENT INDUSTRY IS NOT NEAR THE TOP OF THE CYCLE, BUT MORE LIKE THE EARLY STAGES OF THE AI INFRASTRUCTURE CONSTRUCTION CYCLE。

The Association has been locked as far as 2030

IF IT IS SIMPLY UNDERSTOOD AS A VICTORY FOR HBM, IT MAY STILL UNDERESTIMATE ITS TRUE MEANING. BECAUSE, COMPARED TO THE $50 BILLION COLLECTION GUIDE, THE MOST INTERESTING SET OF FIGURES IN THIS FINANCIAL PAPER IS ACTUALLY -- $100 BILLION。

AT THE PRESS CONFERENCE, AMERICAN LIGHT DISCLOSED THAT TO DATE THE COMPANY HAD SIGNED 16 LONG-TERM STRATEGIC CLIENT AGREEMENTS (SCAS) COVERING DATA CENTRES, CONSUMER ELECTRONICS AND AUTOMOBILE CLIENTS. MOST OF THESE AGREEMENTS HAVE A FIVE-YEAR DURATION AND SOME CAR CUSTOMER AGREEMENTS HAVE A THREE-YEAR DURATION, EXTENDING AS FAR AS THE END OF 2030。

THESE AGREEMENTS ALREADY COVER ABOUT 20 PER CENT OF DRAM DELIVERIES AND ABOUT ONE THIRD OF NAND DELIVERIES。As more agreements land, more than half of future revenues are expected to be included in the LTA framework。

Particular emphasis needs to be placed on the fact that these agreements are not supply agreements in the non-traditional sense。Management confirmed that the agreement followed a binding Take-or-Pay model. Even if the customer is not fully collecting the goods in the future, the established procurement obligations remain。Some of the headline agreements even set a price floor/ceiling mechanism, with the price cap anchoring market prices in the second quarter of fiscal year 2026, and even if implemented at the price floor in the agreement, the corresponding level of the Māori ratio is much higher than that of the American light history cycle。

According to the data disclosed by U.S. managementSo far, 14 agreements have been made to cover about $100 billionAt the same time, clients will provide a total of approximately $22 billion in performance bonds, of which about $18 billion is in cash and can be used directly to support future capacity-building and research and development inputs。

This is almost a historic change for the storage industry。Over the past few decades, the industry has been operating with the logic of “increasing production before digesting demand”; and now, the light is moving towards another model — locking orders before expanding capacity。

This is also the most exciting place in the capital market. Because it means that the current profitability of beauty is no longer based solely on expectations of the boom cycle, but rather on the foundations of long-term contracts。

Q4 WILL HIT A BILLION DOLLARS

If the PCA answers "where the needs come from," then capital spending answers another question -- how does Mislight plan to meet those needs。

ACCORDING TO THE FINANCIAL STATEMENTS, US$ 10 BILLION IS EXPECTED TO BE SPENT ON CAPITAL IN THE FOURTH FISCAL SEASON (UP FROM THE PREVIOUS ESTIMATE OF ABOUT $8.9 BILLION ON WALL STREET), WHILE US$ 27 BILLION IS EXPECTED TO BE SPENT ON CAPITAL THROUGHOUT FISCAL YEAR 2026, AND CAPITAL EXPENDITURE WILL BE HIGHER THAN IN FISCAL YEAR 2026 BY QUARTER. THE NEW INVESTMENTS WILL BE MAINLY FOR HBM, ADVANCED DRAM AND ADVANCED CONTAINMENT CAPACITY BUILDING。

IN THE PAST, SUCH CAPITAL EXPENDITURE FIGURES MAY RAISE MARKET CONCERNS. AFTER ALL, FOR THE STORAGE INDUSTRY, “LARGE-SCALE EXPANSION” HAS NEVER BEEN A FAMILIAR TERM. HISTORICALLY, SAMSUNG, SK HERCULES, AND MIZUOKA HAVE INVESTED IN HIGH-PROFILE INDUSTRIES, LEADING TO OVERSUPPLY, PRICE COLLAPSES AND THE HAND-TO-HAND CLOSURE OF THE LAST ROUND OF CATTLE MARKETS。

But this time, the situation seems to be changing. The reason is simple..These new capacities are based not on optimistic projections of future needs, but on long-term orders that have been signed。

ON THE ONE HAND, $100 BILLION IN BOTTOM INCOME, $22 BILLION IN PERFORMANCE BONDS AND LONG-TERM AGREEMENTS COVERING 2030; ON THE OTHER HAND, CONTINUED EXPANSION OF HBM, ADVANCED DRAM AND ADVANCED CONTAINMENT CAPACITY. THIS IS HOW WE COMPARE THE DATAThe current expansion is more likely to be the execution of a locked order than the non-traditional one based on demand projections。

Let's rekindle the semiconductor

Before the release of the Queen's Queen's Queen, there had been a slight relaxation of market sentiment around the semiconductor of this round。

EARLIER THIS WEEK, KOREA'S SEMICONDUCTOR PLATE JUST WENT THROUGH A CLEAR ROUND OF PRESSURE FROM THE LEADING COMPANIES, SK HERCULES AND SAMSUNG ELECTRONICS. SOME INVESTORS ARE BEGINNING TO WORRY WHETHER AI TRANSACTIONS HAVE BECOME OVERCROWDED AFTER MORE THAN A YEAR OF WILD INCREASES。

And the answer is quite straightforward -- it's not the demand that's up, it's the market that still underestimates it。

FROM FAR ABOVE-ANTICIPATED Q3 PERFORMANCE AND UP TO $50 BILLION OF Q4 INTAKE GUIDELINES; FROM THE SALE OF HBM CAPACITY TO LONG-TERM STRATEGIC AGREEMENTS COVERING 2030, THE SAME SIGNAL IS BEING SENT - AI INFRASTRUCTURE IS STILL ACCELERATING, NOT SLOWING。

AFTER THE RELEASE OF THE NEWSPAPER, THE CD-ROM SURGED BY 16 PER CENT AND LED TO A COLLECTIVE RISE IN THE SHARES OF INTEL, ASMEH, MAYWELL, AND TAKATUNG, THE SEMICONDUCTOR PLATE COMPANIES; THE SOUTH KOREAN STOCK MARKET TODAY WENT UP, AND THE SOUTH KOREAN STOCK MARKET EXPERIENCED ANOTHER COLLAPSE, WITH THREE STARS AND HERCULES BOTH HAVING A LARGE REBOUND; AND AFTER THE OPENING OF THE STOCK, THE SEMICONDUCTOR CHAIN WAS SIMILARLY STRONG, WITH STORAGE AND ADVANCED SEALING LEADING UP。

In a sense, it is no longer just a financial reward for beauty, but a further strengthening of confidence in the entire semiconductor industry. Because the market has once again confirmed one thing..THE STORY OF AI IS FAR FROM OVER, AND STORAGE IS BECOMING AN INCREASINGLY IMPORTANT FEATURE OF THIS STORY。