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The PHLX Semiconductor Index (SOX) surged more than 7% intraday on November 11 to 10,699 points, fully recouping the 12% plunge on November 5. Memory and optical communications led the rally (SanDisk +15.4%, Lumentum +14.1%). However, NVIDIA fell as much as 9% in after-hours trading amid reports surrounding CEO Jensen Huang and rumours of a board ouster. Nasdaq futures opened more than 0.9% lower this morning, making governance risks at the leading firm a new variable for AI hardware.
Morgan Stanley cut its target price for SK Hynix by 38% to KRW 1.6 million and Samsung by 19% to KRW 309,000. It also lowered the assumed operating profit margin for SK Hynix from 53% to 28% for 2029–2035. Nomura kept its target prices at KRW 4.7 million and KRW 670,000 respectively. Debate over a "2028 profit cliff" for memory stocks is intensifying, while Bank of America expects the upcycle to last into 2027.
Samsung’s additional request for EUV blank mask supply from HOYA was rejected. Bottlenecks in advanced-node materials have expanded from photoresist to mask blanks. Separately, Samsung aims to finalise development of 3DCube-H advanced packaging and release its first design toolkit by early 2027.
Infineon raised its FY2027 revenue guidance for the data centre business to roughly EUR 4 billion and plans to invest EUR 3.0–3.5 billion to expand SiC capacity in Dresden and Malaysia. AI power supplies represent the strongest growth driver for power semiconductors.
The domestic semiconductor supply chain keeps advancing at a brisk pace: Dintai Epitaxy inaugurated and expanded its new InP substrate fab in Zhuhai; Dinglong Corporation sent three optical communication material samples to customers; SIRUI Intelligent’s STAR Market IPO application was accepted, with planned proceeds of RMB 2 billion to scale up ALD and ion implantation equipment; Kewell intends to acquire 100% equity of Jingyi Semiconductor for RMB 1.65 billion.
In-depth Analysis
Optical Communications / Optical Chips:The optical communications sector led the rebound alongside AI trades on November 11, with Lumentum and Coherent climbing 14.1% and 12.2% respectively. Goldman Sachs trading desk noted that leading US CSPs are lobbying for the government to lift restrictions related to optical modules. This remains a request rather than implemented policy, and order conversion requires close monitoring. On the industrial front, Dintai Epitaxy’s new InP substrate fab in Zhuhai was inaugurated for capacity expansion on November 10, easing bottlenecks in indium phosphide supply. Dinglong Corporation has submitted samples for three materials: optical fiber coating, thermal conductive gel and optical coupling adhesive, with mass supply planned for 2027–2028. Innolight’s H-shares will be added to the MSCI China Index, effective after market close on November 30. Ruixiang Intelligent secured an order from Source Photonics for its first automated optical module assembly line.
Advanced Packaging & Testing:Samsung plans to complete development of its next-generation 3DCube-H advanced packaging technology and release the first design toolkit by early 2027, targeting high-stack memory packaging. For upstream materials, Shengyi Technology denied on November 11 market rumours that NVIDIA had cancelled its M9 product orders over quality issues, stating its order book remains robust. M9-grade copper clad laminates (CCL) are critical materials for AI servers and high-end substrates, amid prior market concerns over stalled domestic CCL adoption. No new public updates on ABF films or IC substrates were released on the day.
SiC / Power Semiconductors: Infineon identified AI data centres as the core growth driver for power devices, targeting related revenue of roughly EUR 4 billion in FY2027 and allocating EUR 3.0–3.5 billion in capital expenditure to expand SiC capacity in Dresden and Malaysia. Domestic power semiconductor M&A activity continues: Kewell intends to acquire 100% equity of Jingyi Semiconductor for RMB 1.65 billion and conduct a supporting fundraising of up to RMB 901 million, and has responded to inquiries from the Shanghai Stock Exchange. Jiwei Deep Dive pointed out that China’s self-sufficiency rate for automotive analog chips remains in the single digits while industry concentration stands at approximately 86%, intensifying competition for the limited qualified automotive-grade slots.
Memory & Compute Chips: Divergence between Morgan Stanley and Nomura on memory’s long-term profitability has widened. Morgan Stanley cut target prices and lowered long-term margin assumptions, while Nomura maintained its bullish valuations. Bank of America holds the view that the upcycle can persist into 2027 and a downturn may be avoided in 2028. On the spot market, average general-purpose DRAM prices rose 5.77% month-on-month to USD 26 in October, representing an approximately 9.5x cumulative increase since 2016. Official OEM prices see modest gains in Q4, concentrated on enterprise-grade products with consumer-grade chips not following suit. Ingenic Semiconductor stated that DRAM price adjustments have been rolled out to most customers, and NAND prices have surged nearly tenfold this year, though future hikes will narrow in magnitude and scope. The probability of Jensen Huang stepping down has risen to 40% in prediction markets.
Semiconductor Equipment & Materials:SIRUI Intelligent’s STAR Market IPO application has been accepted, with planned fundraising of up to RMB 2 billion for ALD and ion implantation equipment. Canon will launch its KrF lithography system FPA-6400ES6a in early December, featuring a throughput of 400 wafers per hour and overlay accuracy of 4.0 nm. SEMI data shows global silicon wafer shipments reached 3,756 million square inches in Q3, up 13.4% year-on-year and 5.1% quarter-on-quarter. Samsung faces tight supply of EUV blank masks, and HOYA’s capacity expansion cannot resolve near-term shortages.
Wafer Foundry: SMIC’s H-shares rose more than 4% on November 11, with northbound net buying of HKD 935 million. No other major new developments were announced for the day.
Policy & Macro Environment:MIIT launched a public consultation on 46 recommended national standards including Test Methods for Semiconductor Integrated Circuits – Fused Vision Sensors. Market pricing assigns a 59.6% probability of a 25bp Fed rate hike and 10.4% for a 50bp hike in December, with liquidity expectations continuing to weigh on high-valuation names. China’s integrated circuit exports reached USD 39.594 billion in October, up 137.1% year-on-year.
Daily Investment Tips
1. Watch out for event-driven risks at leading firms: Although the rumours surrounding NVIDIA’s CEO remain unconfirmed, a single governance incident could amplify volatility amid rising rate-hike expectations and stretched valuations for AI hardware. Sufficient downside buffers should be reserved for positions.
2. The memory sector has entered a "falsification phase". Morgan Stanley and Nomura’s target prices differ by a factor of 2–3. The core variables are the timing of supply ramp-up in 2028 and delays in data centre construction. Price hikes have spread from contracts to distribution channels but are concentrated on enterprise-grade products, with limited absorption capacity on the consumer side. It is critical to differentiate profit allocation across chip vendors, module makers and distributors.
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