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· Premarket Alpha · by Buzzberg Research
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Market Radar →iPhone Duo launch premiums are falling rapidly in China, per Chinese media relayed by Jukan
A Zhengzhou dealer who secured 50 units expecting RMB 2,000 profit per phone faces an estimated RMB 25,000 loss at the latest prices, and has halted payment of the remaining balance.
Chinese media: iPhone Duo premiums plunge in China, leaving even a dealer with RMB 1 million in orders at risk
Industry observers say foldable phone production is ramping up faster than expected, shortening the period during which initial premiums can hold.
Source →$LITE CEO interview on demand, counterparty + financing risk: - "CFO of $GOOGL came on and reported capex going up Y/Y, we expect…
…hyperscalers for report an increase in capex in earnings. Based on what we see, we see their spend going up." - "The purchase agreements we have, to a large degree, are noncancellable." - The difference between Lumentum and companies like $AVGO, "we are not as dependent on AI datacenter buildout going forward" There's a conversion between electrical products to optical products" creating structural demand. Q: When do you see able to see yourself having more inventory? (catching up to surge in demand) - When we look at demand, there is "no end in sight" TLDR: Financing risk and demand aren't equally distributed across AI supply chains. But markets are just selling everything off together. As for photonics in specific, I said this before, but increasing optical content per XPU + CPO/NPO adoption keeps going up so we'll likely see sector spend go up, even if aggregate capex goes down.…
$LITE CEO interview on demand, counterparty + financing risk:Source →
I can't give advice on what others should do but from what I'm seeing from $AAOI revenue ramp, it looks something like this from disclosed…
…capacity. -> $858M Q1 2027 -> $1.29B Q2 2027 -> $1.62B Q3 2027 -> $1.89B Q4 2027 -> $2.14B Q1 2028 They're sitting on $6.8B MC right now. I'd be very impressed if they do $7.5B exit annualized revenue run rate in 2027 off 40% gross margins and markets assigned them the same valuation. And judging from $LITE making capacity agreements into 2030-2031... I don't quite think demand stalls out after 2027-2028. Anyway, lot of execution risk obviously, but H1 2027 inflection point is pretty close, so I'm personally waiting.
I can't give advice on what others should do but from what I'm seeing from $AAOI revenue ramp, it looksSource →
MS Asia models AMD GPU shipments of 600k, 1.3m and 1.9m for 2026-2028, versus 672k, 1.1m and 1.4m from US coverage
@pequityresearch relayed that the main coverage is Joe Moore in the US and that the earlier 14M-unit model was an extremely inflated estimate the Asia team revised down closer to the US numbers.
Ok, here is the best explanation I've received about the discrepancy. 1.
The 43.3% cut to the 2026-2030 AMD forecast came from the Asia team, not the main US coverage.
Source →Weekly 32GB DDR5 server-module spot gains slowed to +0.6% on Oct 12 from +8.1% on Sep 7
512GB TLC wafer spot is down about 7% since the week to Sep 17 in the tracker, and memory names fell Friday, with STX -7.5% and MU -5.6%.
server memory is still getting more expensive, just a lot more slowly than it was a month ago weekly spot
In past memory cycles the stocks tended to turn when price growth slowed, well before prices fell, but contract prices decide earnings.
Watch SK hynix's Q3 on Oct 28 and SanDisk's report on Oct 29.
Source →