The Morgan Stanley technology webcast focused on the storage cycle, ASML earnings preview, analog chip recovery, and Nvidia-related datacenter developments

Overview

This is Morgan Stanley's global technology and European semiconductor industry research/webcast material, covering SK Hynix ADR, ASML, analog semiconductors, 800V data center developments, and Nvidia NDR. Prepared by Shawn Kim, Lee Simpson, and Joseph Moore, the material is not a deep-dive on a single company but discusses supply-demand dynamics, capex and cycle shifts across the semiconductor supply chain through multiple themes.

Core views

The core views in the report are: first, monetization of AI-related infrastructure is not the same as excess compute, and the next shift in capex is key to assessing demand resilience; second, long-term contract re-pricing for storage remains largely neutral, and the report sees insufficient evidence to support LTA re-rating at this stage; third, DRAM price year-over-year change is easing from elevated levels, suggesting memory prices may peak around 4Q26; fourth, NAND may remain tight under AI SSD demand, but YMTC’s faster greenfield expansion remains the main supply risk; fifth, although ASML has lagged US semiconductor equipment peers year-to-date, the report still focuses on its EUV shipment trajectory and upcoming FY2Q26 earnings.

Analysis framework

The report combines thematic discussion with scenario analysis: for storage, it builds an investment framing around AI spending, LTA pricing, and inventory/price cycles; for NAND, it compares non-AI NAND demand, AI SSD demand growth, and YMTC capacity scenarios; for ASML and analog semiconductors, it evaluates investment implications through earnings preview, shipment expectations, relative stock performance, and signs of cyclical recovery.

Methodology notes

• Cycle analysisThree-factor storage cycle framework

  AI spending, LTA re-rating, and storage pricing cycle

  The report breaks down the storage investment debate into three questions on capital flows, long-term contract pricing, and cycle positioning, to assess demand persistence, valuation expansion potential, and the risk of price peaks.

• Scenario analysisNAND supply-demand scenario analysis

  Comparing YMTC capacity and AI SSD demand

  The report compares 2028 non-AI NAND demand growth, AI SSD demand growth, and different YMTC capacity scenarios to judge whether NAND supply-demand remains tight or turns oversupplied.

• Relative performance analysisSemiconductor equipment relative performance

  ASML performance versus US semiconductor equipment peers and EUV shipment expectations

  The report combines ASML’s year-to-date underperformance against US peers with FY27/FY28 EUV shipment expectations to assess pre-earnings-market expectations and potential recovery room.

Asset mapping & comparison

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

• ASML Holding NV (ASML.AS / ASML.US)

  A core semiconductor and EUV lithography exposure; the report focuses on ASML's FY2Q26 earnings preview, EUV shipment outlook, and relative performance.

  Strengths

  FY27 and FY28 EUV shipment expectations of 92 and 104 units still reflect demand tied to advanced-node capex.

  Weaknesses

  Year-to-date relative underperformance versus US semiconductor equipment stocks by 33% suggests market expectations or valuation remain under pressure.

  Comparison

  Underperformance versus US semiconductor equipment peers is an important context for assessing potential ASML recovery.

  Risks

  Below-consensus earnings guidance, slowing advanced-node capex, and changes in customer order cadence.

• SK Hynix ADR

  A storage-cycle and AI server demand-linked name that was one of the webcast themes.

  Strengths

  AI capex and high-bandwidth storage demand may continue to support a healthy environment.

  Weaknesses

  DRAM contract price year-over-year growth has rolled over from highs, increasing the risk of a cycle peak.

  Comparison

  Like the broader storage sector, it is exposed to both AI demand and inventory cycle dynamics.

  Risks

  Storage prices may peak around 4Q26, inventories may continue to rise, and long-term contract re-pricing may disappoint.

• NAND supply chain / YMTC-related supply

  The report assesses NAND supply-demand through YMTC capacity and AI SSD demand scenarios.

  Strengths

  If AI SSD demand grows 30% to 60% y/y and supply remains disciplined, NAND may stay relatively tight through 2028.

  Weaknesses

  YMTC Fab4, Fab5, and other announced capacity could materially add supply.

  Comparison

  The outcome depends on the relative balance between AI demand growth and YMTC capacity scenarios from 310 kwpm to 470 kwpm.

  Risks

  Faster greenfield expansion is the key over-supply risk.

• Analog semiconductor segment

  The report includes the 2Q26 Analog Playbook and discusses cyclical recovery and margin expansion.

  Strengths

  Cyclical recovery appears underway, with possible margin expansion ahead.

  Weaknesses

  Historically, LTA re-negotiation and forced inventory buildup can cause misreading of the cycle.

  Comparison

  Compared with analog chip cases from the COVID period to separate structural versus cyclical changes.

  Risks

  Weaker-than-expected demand recovery, inventory normalization, and renegotiation of LTA terms.

Key data

• Report date2026-07-14The cover shows July 14, 2026 03:23 PM GMT.
• Industry viewIn-LineThe cover and disclosure pages show the Technology - European Semiconductors industry view as In-Line.
• ASML relative performanceASML has underperformed US Semiconductor Equipment stocks by 33% YTDExhibit 1 states that ASML has underperformed US Semi-Cap by 33% YTD.
• ASML EUV shipment outlook92 units in FY27 and 104 units in FY28Exhibit 2 presents Morgan Stanley expectations for ASML EUV shipments of 92 units in FY27 and 104 units in FY28.
• DRAM price cycle viewprices may peak around 4Q26The report says DRAM contract price year-over-year growth is easing from cycle highs and valuations have yet to be re-rated.
• NAND inventory2Q26 DRAM and NAND inventories roseThe report says the rise in inventories is primarily driven by module makers.
• Potential YMTC NAND shareCould reach about 24% globally if all five announced fabs are allocated fully to NANDThe report notes Fab4 and Fab5 are each around 100 kwpm.
• 2028 NAND demand scenarioNon-AI NAND demand +5% y/y; AI SSD demand +30% to +60% y/yCompared with YMTC capacity scenarios from a 310 kwpm base to a 470 kwpm maximum.
• ASML disclosed price€1,540.80The disclosure page lists an ASML Holding NV price date of 07/13/2026 and a rating of O.

Impact & implications

For investors, the report indicates that the main drivers across the semiconductor chain remain AI capex, storage price cycles, and equipment shipment outlook. In the near term, pay attention to ASML FY2Q26 results and EUV order/shipment guidance; in the medium term, monitor whether DRAM pricing indeed peaks around 4Q26 and whether NAND supply discipline is sufficient to offset AI SSD demand growth. If AI capex keeps expanding, NAND and related equipment chains may benefit; if YMTC accelerates greenfield expansion or inventories continue to accumulate, storage prices and valuations may come under pressure.

Risks

• DRAM contract price year-over-year growth is easing, and storage prices may peak around 4Q26.
• DRAM and NAND inventories rose in 2Q26, mainly driven by module makers, which could worsen price volatility.
• If YMTC accelerates greenfield expansion, NAND supply-demand may shift from relatively tight to oversupplied.
• If AI capex slows, AI SSD, HBM, data center power, and related semiconductor equipment demand may come in below expectations.
• If ASML FY2Q26 earnings or EUV shipment/order guidance disappoint, sentiment toward the European semiconductor equipment chain may be affected.
• The report includes regulatory disclosures noting Morgan Stanley and some covered companies may have investment banking relationships or potential conflicts; investors should make independent judgments using the full report and their own circumstances.

What to watch

• ASML FY2Q26 earnings release and management guidance on EUV orders, shipments, and customer capex.
• Whether DRAM contract price year-over-year changes continue to decline in 2H 2026 and whether a cyclical peak forms around 4Q26.
• Whether DRAM and NAND inventories continue to be built by module makers after 2Q26.
• The persistence of AI capex, AI SSD demand, and 800V data center-related spending.
• The ramp-up pace and actual NAND capacity allocation of YMTC Fab4, Fab5, and other announced fabs.
• Whether analog semiconductor order flow, inventories, and margin expansion validate the recovery narrative.