Meritz Securities (Korean sell side): GPT-6 Astra launch and implications for the memory stock rebound On September 3, OpenAI unveiled GPT-6 Astra. As interpretations of this model became a hot topic, semiconductor stocks rebounded on September 4 even as the broader US market fell on rising rates following a jobs surprise, with the DRAM ETF up 6.6% versus the prior day. Astra's implication is unlikely to be simply whether AGI has been achieved. What drew the most attention was the score of 99.9% on ARC-AGI-3, a benchmark used to judge AGI, a huge improvement over the previous model (Sol at 7.8%). This benchmark is not a knowledge test; it evaluates a model's ability to learn on its own in an abstract environment it has never seen before, and this is where the improvement over the previous model was large. General intelligence, as measured by AAII or Humanity's Last Exam, did not improve much. The differentiated strength improved in Astra is "the ability to acquire skills that humans learn in an unfamiliar environment as efficiently as a human does." Where AI until now found the answer by pressing this and that 100 times, Astra has started to behave more like a human: observing the phenomenon, inferring the rules, and executing right away. The key point is "an expanded scope for replacing human intelligence and human work." If existing AI was an AI that told you what to do, Astra is closer to an AI that, given only a goal, uses the computer directly and produces the result all the way to the end. In other words, an easy to use OpenAI model has begun to handle on its own part of the agent orchestration layer that had been the domain of less accessible tools such as OpenClaw. For users, the barrier to entry for AI agents has been lowered, meaning more work can be handed over. Expansion of AI workloads Astra naturally also comes with efficiency gains that lower the token cost per task versus the previous model. This is a trend across the AI industry as a whole, and if AI workloads were fixed, demand for AI data centers would have to plunge. The reason Jevons paradox continues to operate even after token price declines became a trend following the rise of Chinese models is that AI technological progress also expands the workload. What Astra's technological progress means is that where humans used to hand five minute, ten minute, and twenty minute tasks to AI, as AI performance improves and token prices get cheaper there is more to hand over, such as one hour and 24 hour tasks. Just as news flow about rising GPU rental prices has spread since Astra's arrival, it must be understood that falling AI token prices do not necessarily shrink or slow the AI hardware TAM. Rather, one should recognize that the emergence of a model like Astra can create another inflection point for the AI industry and structurally grow AI demand. Our understanding is that since early July, as the pace of GPU rental price increases slowed and token prices fell, a long IGV (software) / short SOX (semiconductors) pair trade has persisted in the US. This is because falling token prices were interpreted as positive for software, where tokens are a cost, but negative for infrastructure. If progress in models like Astra structurally spreads AI workloads and GPU rental prices begin to respond again, the perception that falling token prices are bad news for AI infrastructure companies could weaken (on 9/4 the DRAM ETF rebounded while IGV fell). As we have argued consistently, the issues accumulating in the AI industry since June (the proliferation of open models, this GPT-6 Astra release, and so on) are, in our interpretation, positive catalysts that generate new demand for AI infrastructure and hardware that did not exist before. We think that in a phase where rates are rising overall and liquidity is becoming scarce, these accumulated positives are not being reflected. The stock market in September is still uncomfortable with high rates, and within the Korean market there remain hurdles to get through, including digesting a round of earnings estimate cuts driven by the sharp won appreciation before the 3Q26 preview season. There is still discomfort standing in the way of the accumulated positives being reflected in a sustained trend. Overall, we continue to view the market conservatively. Even so, as emphasized in our September strategy, we believe one should not substantially empty out positions in core AI infrastructure stocks centered on memory. Positive catalysts not reflected in share prices are accumulating. While our baseline is conservative through mid October, one should keep the upside risk open that the trend, led by AI and semiconductor leaders, could turn at any time, even before October.

Gravitas is finally out! It took a long time to finish this skill. It’s not easy to come up with a new idea that stands out among thousands of skills and workflows, and it’s even harder to make a skill native in multiple languages. Most skills are written in English and just translated into other languages. Still, Gravitas is different: it’s designed from the ground up to be native in English, Chinese, Japanese and Korean.

One of the hardest parts of the memory trade is picking the stock. Forecasts have global memory chip revenue going from $200b in 2025 to over $700B in 2027. That's more than triple in two years. The demand side is easy to see. Every AI chip needs memory, and the datacenters running them need a lot of it to store and move data. The hard part is that memory is a few different businesses. HBM, DRAM and NAND flash all benefit from the same demand, but they don't always move together, and different companies lead at different times. You can be right on the theme and still pick the wrong ticker. $DISK is one way to play the trade without picking. It's the Tema Memory ETF, with 18 holdings across the memory group. $SNDK, Kioxia and SK Hynix are the top three and about half the fund. $MU, Samsung, $STX and $WDC are in there too, and the top 9 holdings are 77.82% of the fund. It also holds Korean and Japanese names that can be hard to buy from a US account. Kioxia, SK Hynix, SK Square and Samsung are about 41% of those top 9. It's a single-theme, concentrated ETF with a 0.75% expense ratio, and it launched June 29, 2026, so there's a short track record. Size it like a theme bet. Other ways to play the trade are owning individual names or building your own basket. $DISK is just one option.

Last spring, at a national cemetery in Texas, an American flag was folded into a triangle and handed to a Japanese nurse. It was supposed to go to the family. There was no family. There was just her. Her name is Haruna. Thirteen years ago, she was one of my wife's high school students in Tokyo. She spent a year in Texas as an exchange student. She came home, became a nurse, and went right back. She says Texas is the only place that ever felt that big inside her chest. Now she's 29. She works nights at a care home for veterans in San Antonio. Her family is eleven time zones away. Most nights, it's just her and the hallway lights. The man in Room 14 was named Otis. He was 91. Korean War. Army. He fought in the war America forgot, and then he outlived everyone who remembered him. His wife. His brother. His friends. Every single one. Nobody had visited Room 14 in six years. Otis was not easy. He called her "Tokyo." She's from Osaka. She told him every night. He did not care. He could not say her name. In two years, he tried Harna, Harley, Hannah, and once, with complete confidence, Hawaii. He cheated at cards. Badly. She caught him every time. He denied it every time. He taught her Texas sayings, and she wrote them down in a little notebook. "That dog won't hunt." "Madder than a wet hen." "He's all hat and no cattle." She started using them on the day shift. The other patients thought it was the funniest thing they'd ever heard. But at three in the morning, when neither of them could sleep, Otis was different. At three in the morning, he told her things. About a frozen hill in Korea, in the winter of 1951. About the cold, which he said was not like cold at all, but like being hit. About his best friend, Eddie Ray, who was 19, and who he carried down that hill on his back. All the way down. Eddie Ray didn't make it. Otis had never told anyone. Not his wife. Not anyone. Seventy-five years. He told a Japanese nurse, at three in the morning, in Room 14. She didn't say anything. She just held his hand. He let her. She taught him to fold paper cranes. His hands shook so badly the first ones looked like crumpled napkins. He kept at it. One crane a night. He lined them up on his windowsill, and he would not let the day shift move a single one. One night in February, he was quiet for a long time. Then he said: "Who's gonna come to my funeral, Tokyo? Everybody I know is already up there waiting." She said, "I'll come." He thought about it. Then he nodded. "Well. That's one." He died in March, at 2:40 in the morning. She was holding his hand. She was afraid that nobody would come. That it would be her, and a chaplain, and an empty field. The funeral home posted a message online that afternoon. "Korean War veteran. 91. No family. Please don't let him be buried alone." She didn't know what happened next until she drove to the cemetery. The road was lined with flags. For miles. People had come out of their houses and stood at the edge of the highway holding them. Four hundred motorcycles rode in formation behind the hearse. Big men in leather vests, gray beards, engines rumbling so low you could feel it in your teeth. Truckers pulled onto the shoulder and stood beside their rigs with their caps over their hearts. A whole elementary school came, holding signs in crayon. "THANK YOU OTIS." "WE REMEMBER." One said "THANK YOU OTIS FOR YOUR SERVICE AND ALSO WE ARE SORRY." Old men in Korean War veteran caps came in wheelchairs. When the casket passed, they pulled themselves up on their armrests and saluted. A Korean-American woman brought a bouquet of white flowers. She told Haruna her grandparents had lived through that war. "He fought for my family," she said. "So I came for his." Three thousand people. Three thousand strangers. For a man none of them had ever met. Haruna stood at the very back. The only person there who had ever heard his voice. At the end of the service, the honor guard folded the flag from his casket. Thirteen folds. Slow. Perfect. Into a tight triangle of stars. Then the officer turned to present it to the next of kin. There wasn't one. He looked at the funeral director. The funeral director looked across the crowd, and pointed. At her. And the officer walked through three thousand people. All the way to the back. To a small Japanese woman in a nurse's coat. He knelt in front of her. He held out the flag. And he said the words they say to the family. On behalf of a grateful nation. Three thousand Americans turned around to look at her. As if she was his family. Because she was. That evening, she went back to Room 14 to collect his things. There wasn't much. A watch. A Bible. Two decks of cards, both marked. And in the drawer of his nightstand, one more paper crane. The last one he ever folded. Something was written on the wing. In pencil. In very shaky capital letters. Her name. Spelled right. For the first time. "HARUNA. THANKS FOR COMING. THAT'S ONE." The flag is on a shelf in her little apartment in San Antonio now. The crane is next to it. She told my wife something on the phone that I keep thinking about. "He thought he'd have one person. He was off by about three thousand."

Korea, Eugene Investment & Securities: On the NVIDIA Rubin Ultra HBM despec NVIDIA appears to be discussing a plan to configure the main version of Rubin Ultra with a 2 die structure, HBM4 8Hi, and 8 stacks, and to add an HBM4E 8Hi version at a later point. Assuming NVIDIA's 2027 CoWoS capacity allocation is 1,200k, NVIDIA's accelerator output is estimated at 9.9M units and Rubin Ultra output at 1.6M units. If Rubin Ultra shifts from HBM4E 12Hi 384GB to HBM4 8Hi 192GB, NVIDIA's 2027 HBM demand would be revised down by roughly 10%, from 24.1bn Gb to 21.6bn Gb, and total HBM demand could decline by about 4%. Of course, this assumption does not reflect the possibility of a further expansion in accelerator output. That said, we judge this despec to be a strategy for producing more accelerators out of a limited pool of HBM bits, as the increase in HBM supply from DRAM makers has failed to keep pace with the speed of TSMC's front end and back end capacity expansion. DRAM makers find it difficult to expand HBM capacity flexibly because of the extreme shortage in commodity DRAM. With consumer set makers in smartphones and PCs experiencing production disruptions due to memory shortages, it is also not easy for memory makers to cut allocations to these customers any further.

Daily Brief, 23 Oct: Risk tepid with the clock running down on midterms Get the brief by email: Join Rekt Mkts Pro: Crypto is looking steadier after another nasty US tech session, while memory is trying to recover. SK Hynix shelving its Solidigm IPO plans gives that bounce a company-specific reason, rather than just hoping the selling has gone too far. BTC and ETH are only slightly lower over 24H, which is a better response than following tech all the way down...but yday's substantial ETF outflows make the demand picture less comfortable than the quieter PA suggests. For the past few weeks you've been paid to trade the range and it's felt horrific to do it each time as the swings are so violent...really tough to sell on a big pump coz it always feels like a breakout...really tough to buy on a big dip coz it always feels like stuff is going to plummet...on paper it should be easy to trade but of course it's ever so hard! MACRO We've seen a massive move in rates with the 10Y hitting as low as 4.95%, almost 20bps off the highs of the week. That's meaningful bond relief, altho borrowing costs are still high and it didn't rescue tech - I just think stocks are impacting rates more than rates are impacting stocks...when we rally growth is less of a concern and inflation is more of a concern, and vice versa when we sell off. Oil rose sharply yday after Houthi attacks on Saudi Arabia renewed concerns about supply disruption. That leaves an awkward mix of cheaper Treasury yields and more expensive energy. December gold futures fell to around $4,030 in Asian trading today, so the bond rally hasn't translated into a bid for every supposed safe haven. EQUITIES S&P 500 and Nasdaq-100 futures are slightly lower. SK Hynix finished up 4.4% in Korea after opening lower, while Samsung gained just 0.5%. Hynix has recovered some of Thursday's sharp reversal; Samsung's much smaller bounce makes it harder to call this a convincing recovery across the whole group. SK Hynix has suspended its review of a funding round and US IPO for Solidigm. A separate listing had raised concerns about a discount to the parent company's value, so removing that uncertainty gives shareholders something specific to respond to. Micron and Sandisk are also higher in premarket after closing down 6.3% and 8.5% respectively yday. That's better follow-through from Korea than simply hoping the US names catch up but may also point to a short-covering bid. CRYPTO BTC, ETH and SOL are each down around 0.4% over 24H, while HYPE is down 1.2%. Much quieter than the selling in yday's brief, with the majors holding up reasonably well against the damage in tech. HYPE is still lagging, so this isn't quite a recovery lifting everything together. US spot BTC ETFs lost $635.6m yday, ending three consecutive days of inflows and more than reversing Wednesday's $524.8m buying. ETH funds lost $110.6m after Wednesday's $14.9m inflow. BTC still has $439.1m of net buying this week through Thursday, while ETH has lost $225.1m. Earlier BTC demand hasn't all disappeared, but the flow picture has taken a fairly sharp turn since yday's brief. Quieter selling in spot and money leaving the funds can both be true. ZEC is down around 4.1% over 24H and VVV 3.9%, so VVV's relative strength in yday's brief hasn't held. Both are lagging the majors rather than offering much shelter. The privacy and AI-related names we've been discussing still have a tougher day than BTC and ETH; that doesn't settle the longer-term case, but the outperformance hasn't arrived today. Good luck today and touch grass this weekend.

SITUATION EXPLAINED: The Treasury Secretary gave the frontier labs a D-minus on community outreach. "Whether it's the data center companies, the hyperscalers, or the large language labs like Anthropic, OpenAI, they have done a horrendous job reaching out to communities. I don't blame people for having a backlash." "I used to be a professor and I was known as a tough grader, but it's easy to give these guys a D minus. They have taken their credibility to the edge." "We need to acknowledge there is a lot of Chinese agitprop in there. These protesters who show up in rural areas, that was not a spontaneous outpouring of the community. It's very well organized." "There is no day after tomorrow that China wins against us. If they were to pull away from us on AI, then nothing would matter." "The Chinese want pause. Even the North Koreans, they want pause." @theojaffee: "They're still framing opposition to AI in terms of opposition to data centers, which is the most common way the general public is opposed to AI right now. But there are other reasons to be skeptical of the continued rapid development of AI that have nothing at all to do with data centers, and that are far beyond these."

DP is confirming there will be no further crypto tax delay, this is the clearest signal yet that January 2027 implementation is actually happening, not just the standard "we'll proceed as scheduled" line from earlier this summer. The reasoning: this has already been delayed three times, and delaying again on top of that would undermine the basic tax principle of "income gets taxed," a line DP officials are explicitly using. The government's newly released tax reform package also doesn't include any provision for further delay, confirming this at the policy-document level, not just in verbal statements. The problem critics are pointing to is sequencing. The Digital Asset Basic Act, which is supposed to establish the actual market rules, issuance, distribution, disclosure, still hasn't passed, with roughly 10 competing bills still stuck in committee. So Korea is on track to start taxing crypto income before the law governing the market itself exists. One industry source flagged the specific mechanical problems this creates: no loss offsetting across gains and losses, and easy avoidance paths through DeFi, meaning the tax burden falls disproportionately on ordinary users trading in won on domestic exchanges, likely accelerating capital flight to offshore platforms. The stock tax equity argument resurfaces too, since the financial investment income tax was scrapped, stock investors pay essentially nothing on capital gains, while crypto investors face a flat 22%. That's the exact fairness gap PPP has used against this tax from the start, and it's likely to reignite debate over reinstating the financial investment income tax as well. DP's response to all of this is to lean harder into finishing the Basic Act this session, want both the legal framework and the tax justification secured within the same legislative session. But the two things that killed every previous attempt, the ownership cap and the bank-majority stablecoin issuer structure, are still unresolved between government, ruling party, and opposition, so there's real doubt whether the Basic Act clears in time regardless of DP's intent. Meanwhile PPP keeps filing delay bills from a different angle, Jung Sung-kook's bill pushing implementation to 2030 being the most recent, positioning tax delay as a tool to use against the government in the upcoming tax reform review process rather than a genuine standalone push.

2026, day 257 Good morning from Asia. ‘Oil Industry Braces for Years-Long Iran War’ (Oil Price); ‘Widening Mideast Instability Squeezes Global Oil Supplies’ (WSJ); ‘Saudi pipeline outage threatens loss of 4% of global oil supply’ (Reuters); ‘Sources within Saudi Arabia are now telling us that the damages to the East-West pipeline will take more than a month to repair due to a lack of spare parts and deeply impacted supply chains’ (Marhelm); ‘Saudi oil facility in Jazan directly hit in the attack’ (Tasnim); ‘Saudi foreign minister warns continued regional escalation risks widening conflict’ (Al Arabiya); ‘Potential Iran-Oman Hormuz deal won’t immediately reopen strait, source tells Iranian media’ (ToI); ‘Saudi pipeline attack exposes potent Iraqi militia threat’ (FT); ‘Houthis' Yemen advance leaves Gulf states with uncomfortable choice’ (Reuters); ‘Iran hardliners said to have launched attacks in defiance of leaders, sabotaging peace deal’ (ToI); ‘Iran requested new Russian Geran drones for attacks on Israeli, American targets amid war’ (FT); ‘Trump says US could stay in Iran and keep oil, like Venezuela deal’ (Reuters); ‘Korea, US to hold high-level defense talks amid Hormuz deployment consideration’ (Korea Times); ‘Turkey FM says Israel wants to destabilize Syria as he visits Damascus’ (Al Arabiya); ‘US Air Force pilots lack sufficient sortie experience for combat operations’ (Military Times); ‘Russia says hit Ukraine rail site ‘used to transport military cargo’ from Europe’ (AFP); ‘Russian drone strikes train behind Boris Johnson’s’ (Telegraph) - “Former prime minister unharmed after attack on railway line between Ukraine and Poland”; ‘Trump says Zelenskyy ‘has to stop’ attacking Russian refineries’ (AFP); ‘Ukraine's race for its own ballistic missile’ (Kyiv Independent); ‘Trump reiterates support for united Ireland, says won't talk about Scotland 'yet'’ (Reuters); ‘National Security Agency launches historic restructuring’ (WaPo); ‘Silicon Valley’s attempt to slow AI race triggers surge of suspicion’ (Telegraph) - “Tech giants told to ‘stop pretending the motivation to slow down is purely altruistic’”; ‘Trump Sees Race Against China as Key Issue on AI Regulation’ (WSJ); ‘China’s intelligence chief warns of risks from AI as ‘new arena for strategic rivalry’’ (SCMP); ‘Brics summit ends with Xi’s AI offer, Modi’s warning on critical minerals as weapons’ (SCMP); ‘For China, H-6N bomber enhances nuclear deterrence and second-strike capability’ (SCMP); ‘Japan has few cards to play one month after Putin’s isle visit’ (Japan Times); In geoeconomics, ‘Dutch start-up completes funding round for encrypted silicon technology’ (FT); ‘Japan's future US investments to focus on power sector: trade minister’ (Nikkei Asia); ‘EU Parliament ready to take tougher line on China, says lead MEP’ (Politico); ‘Trump says he is removing U.S. tariffs on Irish whiskey’ (Reuters); ‘EU shelves entry-exit system in France and Portugal’ (Telegraph); In politics, ‘Marine Le Pen vows to put French citizens first in campaign launch’ (FT): ‘Sweden’s election too close to call after late right-wing surge’ (Politico); ‘Rayner accused of ‘two-tier’ donation rules to protect union funding’ (Telegraph); ‘Reform 'very confident' £72m donations were legal - but Rayner warns of 'backdated' action’ (Sky); ‘Trump calls $5,000 payouts 'easy' to fit into federal budget’ (Reuters); In markets, ‘BOJ and Fed face critical test as market pressure rises on rates’ (Nikkei Asia); ‘Central bankers slam 'dangerous’ Mélenchon’ (Euractiv); ‘Oil Jumps as Shutdown of Saudi Pipeline Deepens Energy Crisis’ (BBG); ‘A 5% Treasury Yield Is Raising New Risks for Markets, Economy’ (BBG); ‘Anthropic has chosen the Nasdaq for its IPO listing’ (Business Insider); ‘China’s Tax Clampdown Raises Fears of Founder Share Disposals’ (BBG)