Sinolink Securities has released a research report expressing a positive outlook on AI-PCB, core computing hardware, the Apple supply chain, and sectors benefiting from supply chain autonomy. The firm believes robust AI demand is driving both prices and volumes higher for PCBs. Currently, many AI-PCB companies are experiencing strong order books, operating at full capacity with high sales, and are actively expanding production, suggesting sustained high earnings growth is likely. AI-grade copper-clad laminates are also in high demand. As overseas capacity expansion for laminates is slow, leading mainland Chinese manufacturers are well-positioned to benefit significantly.
Sector sentiment indicators are as follows: Consumer Electronics (steadily improving), PCBs (accelerating growth), Semiconductor Chips (steadily improving), Semiconductor Foundry/Equipment/Materials/Components (steadily improving), Displays (bottoming out), Passive Components (steadily improving), and Packaging & Testing (steadily improving).
Key points from Sinolink Securities' report include: Broadcom disclosed its FY26Q1 (Dec 25 - Feb 26) results, with revenue reaching $19.3 billion, up 29% year-over-year. GAAP and Non-GAAP net profits were $7.349 billion and $10.185 billion, up 34% and 30% YoY respectively. Semiconductor and software revenues for the quarter were $12.51 billion (up 52% YoY) and $6.796 billion (up 1% YoY) respectively. The company's AI revenue reached $8.4 billion, a 106% increase YoY, with Q2 guidance set at $10.7 billion, representing 140% growth. In Q1, AI networking products accounted for approximately one-third of AI revenue, growing 60% YoY, and are projected to constitute 40% of AI revenue in Q2. Full guidance for FY26Q2 revenue is $22 billion, up 47% YoY.
Progress with Broadcom's AI chip customers is smooth. The company has secured custom chip business with six clients. Google's seventh-generation TPU, Ironwood, is expected to continue growing in 2026, with even stronger demand anticipated for the 2027 product and subsequent generations. Anthropic is projected to deploy 1GW of TPU products in 2026, exceeding 3GW in 2027. Meta's ASIC has begun shipments, with its next-generation product expected to reach multi-gigawatt-scale deployment in 2027 and beyond. The sixth client is OpenAI, whose first-generation ASIC is forecast for deployment exceeding 1GW in 2027.
Broadcom's Tomahawk 6 switch chip has achieved a 102.4T rate using 200G serdes. The next-generation Tomahawk is expected to double this performance while utilizing 400G serdes. Based on Broadcom's earnings and guidance, AI revenue growth is robust, and the ASIC custom chip business is expanding at a remarkable pace. These chips, optimized for specific algorithms, offer advantages over general-purpose GPUs in performance, power efficiency, and cost. With six customers already secured and potential for more, the report remains positive on the ASIC beneficiary industry chain.
According to media reports, Samsung Electronics plans to implement price increases for its main NAND products in Q2 similar to those seen in Q1. Having already raised NAND prices by 100% in Q1, a further 100% increase would mean prices have tripled since the end of last year. Other manufacturers like SK Hynix and Kioxia are also preparing further price hikes, indicating a continuing upward trend in memory chip pricing.
The report suggests a prolonged blockade of the Strait of Hormuz could impact Asia's semiconductor industry. Global memory production (Samsung, Hynix, and Micron's facilities in Japan and Taiwan), advanced-node foundries (TSMC, Samsung), and semiconductor materials (companies like Tokyo Ohka Kogyo, JSR, Sumitomo, Nittobo, IBIDEN, Unimicron) are concentrated in Asia. Advanced fabs are significant electricity consumers (TSMC's Taiwan fabs are forecast to consume 12.5% of Taiwan's total electricity in 2025). Japan, South Korea, and Taiwan rely heavily on natural gas (with high import dependency) and coal for power generation. A long-term blockade could lead to supply constraints, rising energy costs, and increased raw material prices, potentially causing widespread semiconductor shortages and price inflation. This, in turn, might lead to higher prices for end-consumer electronics, dampening demand, and necessitate increased CAPEX for North American data centers, expanding leverage.
The blockade's impact would be more pronounced for regions heavily reliant on LNG imports. Mainland China's mature-node processes, power semiconductors, analog chips, and packaging & testing segments are expected to maintain their low-cost advantages. In a context of soaring costs for overseas competitors and customers diversifying supply chains, domestic substitution and order transfers could accelerate. The report recommends focusing on industries benefiting from this domestic substitution and order transfer trend.
Outlooks and guidance for 2026 capital expenditure from Amazon, Google, and Meta have exceeded expectations. The firm believes core AI computing hardware will continue to benefit and suggests monitoring segments where H1 2026 earnings may surpass expectations. The explosive growth in token counts is driving strong demand for ASICs, reinforcing a positive view on Nvidia and the ASIC beneficiary industry chain.
Overall, while the AI and electronics sectors may face short-term headwinds from the Hormuz Strait situation, the medium to long-term outlook remains positive for AI-grade laminates/PCBs, core computing hardware, semiconductor equipment, and the Apple supply chain.
Risks include demand recovery falling short of expectations, slower-than-expected progress in AIGC, and potential further escalation of external sanctions.
Comments