Galaxy Securities released a research report stating that, in the short term, the actual impact of algorithm optimization on HBM demand has been overestimated. TurboQuant primarily affects memory usage during the inference phase, while the current focus of AI investment remains on the training side. Furthermore, efficiency improvements in individual models and the expansion of AI application scale have a counterbalancing effect; the overall change in demand depends on whether the growth rate of deployments can offset the reduction in per-unit consumption. Simultaneously, data center network equipment suppliers, who are not reliant on the quantity of memory chips, stand to benefit from lower data center construction costs driven by declining memory prices. These suppliers face minimal short-term sentiment-driven disruptions, with demand for Data Center Interconnect (DCI) continuing to benefit. In the long run, TurboQuant lowers the barrier to entry for AI applications, potentially stimulating compute deployment on the inference side and driving growth in the total number of AI servers and demand for enterprise-grade SSDs. Industry validation, evidenced by surging HBM sales and high order volumes for manufacturers like Samsung, indicates that the structural shortage in the high-end memory market remains unchanged, and the expansion trend is ongoing. Major indices strengthened over the past week after five consecutive weeks of decline, with technology indices outperforming the broader market. For the week (2026.03.30-2026.04.05; markets were closed Friday for Good Friday), the S&P 500 gained +3.36%, the Nasdaq Composite gained +4.44%, and the Dow Jones Industrial Average gained +3.38%. Within the technology sector, the Nasdaq-100 Index, heavily weighted towards large-cap tech growth stocks, rose +3.95%, while the Philadelphia Semiconductor Index (SOX) surged +5.04%. Both the Nasdaq-100 and SOX recorded weekly gains, outperforming the broader market. Regarding performance within the Nasdaq-100, the top weekly gainers were concentrated in the chip/semiconductor, cloud services, and hardware equipment industries. The largest weekly declines were seen in companies within the food & beverage, oil & gas, and power/new energy sectors. Galaxy Securities attributes this primarily to: 1) Overall market positioning being at historically low levels, with hedge funds and trend-following funds like CTAs holding significant net short positions; positive news triggered concentrated short covering. 2) Quarter-end rebalancing by large institutions such as pension funds, which generated approximately $34 billion in buying demand. 3) Hopes for an easing of geopolitical risks from US-Iran tensions emerged during the week, but former President Trump's tougher stance in comments on Thursday reintroduced geopolitical concerns, causing WTI crude oil to surge over 11% that day. Overall, the volatility reflects a technical rebound in the market rather than a fundamental improvement. Furthermore, trading volume did not match the index gains, suggesting the sustainability of the rebound still depends on further developments in the Middle East situation. Key events included: 1) Intel spent $14.2 billion to repurchase the 49% stake it held in the joint venture related to Fab 34. 2) Tesla released Q1 delivery figures, reporting 358,023 vehicles delivered in Q1 2026, representing approximately 6% year-over-year growth. 3) Google launched Gemma4, which includes four variants: an efficient 2B model (E2B), an efficient 4B model (E4B), a 26B Mixture-of-Experts (MoE) model, and a 31B dense model. Core View: Concerns about a marginal slowdown in memory chip demand emerged due to spot price declines for memory chips, potential underperformance of Nvidia's Rubin Ultra production line, and Google's introduction of the TurboQuant algorithm, which can reduce AI model KV Cache memory usage to one-sixth of original levels. This led to fluctuations in capacity expectations for HBM4 memory (including suppliers like SK Hynix, Samsung, and Micron), volatility in order expectations for TSMC, impacts on utilization rates for advanced packaging lines, and worries about the sustainability of AI-driven growth in the memory sector, causing periodic disruptions within the segment.
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