Asian investors are focused on CSP capex, LTAs, HBM pricing, and supply-demand bottlenecks in memory/Korea Tech

Overview

This report summarizes feedback from JPMorgan's Asian technology team following discussions with more than 50 investors in Hong Kong. Key themes include sentiment in the memory industry, CSP data-center hardware capex, long-term agreements, HBM pricing, DRAM/NAND supply and demand, China competition risk, inventory-depletion risk, South Korea's AI mega-investment plans, MLCCs and ABF substrates, and relative-value trades in Korean technology holding companies. The report believes that the market is transitioning from "growth acceleration and earnings upgrades driven by infrastructure buildout" to "validation of growth quality and earnings durability during the optimization phase."

Core views

JPMorgan's core view is that memory stocks may continue to be affected in the near term by uncertainty over the magnitude of CSP capex revisions, pre-2Q26 earnings estimate cuts, slowing price momentum, and crowded positioning. Over the medium to long term, however, DRAM and HBM supply and demand remain tight, LTAs help lock in volume, pricing, and an earnings floor, and earnings durability at major Asian memory manufacturers remains the more important share-price driver. The report maintains a positive view on SEC, KIOXIA, and Nanya Tech.

Analysis framework

The report is structured around investor meeting feedback and frequently asked questions. It breaks down buy-side concerns into CSP capex and memory TAM alignment, LTA penetration and pricing mechanisms, HBM ASP expectation gaps, DRAM/NAND supply-demand tightness, China competition, inventory risk, Korean AI investment, memory supply-chain bottlenecks, MLCC/ABF opportunities, and relative-value trades in Korean holding companies. It also incorporates JPMorgan's existing Memory TAM and HBM supply-demand models, CoWoS assumptions, and ratings on covered companies.

Methodology notes

• Industry cycleMemory cycle stage assessment

  Shift from infrastructure buildout acceleration to earnings durability validation

  The report believes that market focus is shifting from growth acceleration and earnings upgrades driven by AI infrastructure buildout toward validation of demand optimization, growth quality, and earnings sustainability.

• Supply-demand analysisS-D tightness

  Comparison of DRAM, NAND, and HBM supply-demand tightness

  The report assesses supply-demand gaps based on self-sufficiency rates, capacity expansion, order demand, product mix, and customer purchasing behavior. It believes that the DRAM shortage is more acute than the NAND shortage and that overall HBM supply-demand tightness will persist.

• Contract mechanismLTA

  Impact of long-term supply agreements on earnings durability

  LTAs provide suppliers and customers with volume visibility and pricing ranges, helping reduce cyclical volatility, but may trigger market debate in the near term over pricing and margin ceilings.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• KIOXIA Holdings (285A.T)

  Covered company related to the memory/NAND theme, rated OW

  Strengths

  Benefits from tight memory supply and demand, improving NAND eSSD demand, and medium- to long-term fundamentals in the Asian memory sector.

  Weaknesses

  In the short term, it is affected by overall memory-stock sentiment, CSP capex uncertainty, and sector volatility.

  Comparison

  The report includes it alongside Samsung Electronics and Nanya Technology as major Asian memory manufacturers receiving a positive view.

  Risks

  NAND supply-demand tightness is weaker than DRAM, while downside risks from weaker consumer-electronics demand and China NAND competition remain important.

• Samsung Electronics (005930.KS)

  Major Asian memory manufacturer, rated OW

  Strengths

  Benefits from DRAM, HBM, and AI-server-related memory demand; LTAs and capex flexibility support earnings durability.

  Weaknesses

  Actual 2Q26 DRAM price increases at Korean memory manufacturers were below those of some global peers, and the market may be concerned about a near-term margin ceiling.

  Comparison

  Along with KIOXIA and Nanya Tech, it is one of the major memory manufacturers on which the report maintains a positive view.

  Risks

  Insufficient CSP capex revisions, opaque LTA pricing, HBM ASP expectation gaps, and inventory/server-rack bottlenecks.

• Nanya Technology (2408.TW)

  Major memory manufacturer, rated OW

  Strengths

  Benefits from tight DRAM supply and demand and an uptrend in prices.

  Weaknesses

  Its share price and valuation are sensitive to price expectations, industry sentiment, and cyclical volatility.

  Comparison

  The report notes that MU and NYT posted relatively high recent-quarter DRAM ASP increases, helping explain pricing differences among Korean manufacturers.

  Risks

  Wider ASP expectation ranges, non-HBM price trends, and industry competition.

• MLCC producers

  The second-largest investor focus theme after memory

  Strengths

  An improving AI-server-related product mix, low yields, and large-size SKUs are creating supply bottlenecks that could support broad-based price increases for non-AI products.

  Weaknesses

  IT MLCC demand may be weaker than expected, and pricing signals remain unclear.

  Comparison

  Murata, Taiyo Yuden, and Samsung Electro-Mechanics were mentioned as major MLCC-related companies.

  Risks

  If the July earnings season does not provide a clear pricing path, elevated valuations may remain under pressure.

• ABF substrate and memory-grade substrate/PCB

  A beneficiary of migration to higher layer counts in AI applications and bottlenecks in memory subcomponents

  Strengths

  AI applications are driving migration to higher layer counts, the shift from BT substrates to ABF substrates is improving supply and demand, and greater memory specification diversity is increasing component procurement demand.

  Weaknesses

  Market sentiment is being dragged down by risk appetite toward the MLCC and memory sectors.

  Comparison

  Followers such as LGIT have experienced risk-off sentiment similar to that affecting MLCCs.

  Risks

  If AI-server deployments, power availability, or downstream rack schedules are constrained, the timing of component-demand realization may be delayed.

• Korea tech holdcos

  Relative-value trading theme involving Korean technology holding companies

  Strengths

  Interest may recover as risk appetite improves and visibility into shareholder returns from underlying assets increases.

  Weaknesses

  An increasing share of NAV is currently correlated with memory semiconductor share prices, reducing the diversification benefit.

  Comparison

  SK Inc, Samsung C&T, and SK Square are cited as relevant examples.

  Risks

  Memory-stock volatility, uncertainty over shareholder returns, and insufficient CSP capex catalysts.

Key data

• Investor meeting scaleMore than 50 investorsJPMorgan met with investors in Hong Kong last week and compiled the feedback.
• Major Asian memory-stock pullbackApproximately -30% from the June high through July 13MXAP/SOX were approximately -6%/-11%, respectively, over the same period through July 10.
• Memory Industry TAMUS$348-720bn in 2026E-2027EApproximately 50-70% of the CSP hardware capex forecast by JPMorgan's US hardware team.
• Buy-side CSP capex expectationsCould be revised up to US$1trn/US$1.5trn in 2026E/2027ESome investors expect the market to raise hyperscaler capex expectations over the next 3-6 months.
• Near-term memory ASP expectationsApproximately +20% in CY3Q26E and +10% in CY4Q26EJPMorgan's maintained expectations for comparable sequential ASP growth.
• 2027E ASP assumptionLow-single-digit percentage growth each quarterAssumes approximately half of volume is priced based on 2026 average LTA prices and the other half on contract prices reflecting tighter supply and demand.
• HBM industry ASPApproximately US$1.8/GbBelow the approximately US$2/Gb ASP for non-HBM servers, but JPMorgan believes 25-30% year-over-year HBM ASP growth next year is more reasonable.
• DRAM self-sufficiency rateApproximately 50-60%The report believes that the DRAM shortage is more severe than the NAND shortage.
• NAND self-sufficiency rateApproximately 70-80%NAND supply and demand are also tight, but less so than DRAM.
• Enterprise SSD demandApproximately 500EB in 2027E, close to +50% year-over-year growthEnterprise SSD demand related to KV cache offloading has been revised up strongly.

Impact & implications

For investors, the report suggests that the memory sector may remain highly volatile in the near term, driven by earnings releases, CSP capex guidance, and ETF trading. However, if CSP capex is revised up significantly, LTAs raise the earnings floor, and tight HBM/DRAM supply and demand persists, major Asian memory manufacturers and certain upstream materials, substrate, and controller IC companies should retain medium-term support. MLCCs and ABF substrates are also supported by AI-server demand and supply-chain bottlenecks, but clearer pricing signals are needed.

Risks

• If the upward revision to CSP data-center hardware capex is limited, sentiment toward memory suppliers' share prices could be pressured.
• Slowing year-over-year and sequential price momentum after 2Q26 could weaken near-term EPS upgrade expectations.
• Crowded positioning in memory stocks and increased trading activity in ETF products could amplify volatility.
• The actual near-term impact of LTAs on prices and margins remains unclear, and the market may be concerned about pricing and margin ceilings.
• There is a significant gap between buy-side expectations for HBM ASPs to double year over year next year and JPMorgan's expectation of 25-30% growth.
• Server racks, power availability, supply-chain inventories, and installation schedules could affect the pace of memory procurement.
• Without clear pricing signals for MLCCs, elevated valuations could remain under pressure.
• Capacity expansion and customer-qualification progress among Chinese memory manufacturers remain headline risks, although the report does not yet view them as substantive downside risks.

What to watch

• Whether major CSP customers significantly raise data-center hardware capex after the earnings season.
• Actual 2Q26 results and management guidance for 3Q26/4Q26 memory prices, orders, and margins.
• LTA coverage ratio, term, pricing benchmarks, floor prices, take-or-pay provisions, and margin-protection mechanisms.
• Customer qualification for HBM4 and HBM4E 12Hi, the NVDA Vera Rubin-related timeline, and changes in Google TPU and AWS Trainium demand.
• DRAM and NAND self-sufficiency rates, WSPM expansion, upward revisions to eSSD demand, and the magnitude of downward revisions to consumer-electronics demand.
• Execution timelines for South Korea's AI mega-investment plan and new capacity such as the Yong-in fab.
• Whether clear pricing and supply-demand improvement signals emerge for MLCCs, ABF substrates, memory-grade substrates/PCBs, and controller ICs.
• Visibility into shareholder returns from the underlying assets of Korean technology holding companies and any recovery in risk appetite.