UBS bullish on PCB/CCL: Q-glass is currently on hold after failed sampling, while an M9/PTFE hybrid has emerged as the more feasible solution - potentially reshuffling winners across the PCB/CCL supply chain. Meanwhile, 800G/1.6T optical modules and custom ASICs are becoming important nearterm PCB drivers, reducing dependence on Nvidia alone. UBS therefore sees the recent weakness as more of a reset than the end of the AI PCB cycle.

Amazing how late some sellside firms realize, that this transition has happened way earlier than "now"? Late seems better than never. UBS: Murata may be undergoing one of the more interesting transformations in tech hardware. For years, investors viewed it as a smartphone and consumer electronics supplier. UBS now increasingly sees it as an AI infrastructure company. AI servers are becoming the largest growth driver for MLCCs. As racks become denser and power requirements rise, the amount of MLCC content per server keeps increasing. UBS now expects datacenters to account for 30-40% of Murata's MLCC business within the next few years, overtaking traditional end markets. That shift is forcing UBS to rethink both earnings and valuation. The firm raised operating profit forecasts by 14%/49%/77% for FY3/27-29 and lifted its PT from ¥5,400 to ¥13,200. They also expect pricing power to remain unusually strong as AI demand absorbs capacity and pushes customers toward higher-value MLCC products.

Goldman getting increasingly constructive on Furukawa Electric and, more broadly, the AI optical/datacenter buildout in Japan. The firm says the company’s new medium-term plan came in well above consensus: FY3/31 op profit target now ¥250B (hell yeah, finally 2031 numbers again) Datacenter-related businesses expected to drive the majority of earnings Massive investment ramp into optical and digital infrastructure Interesting sector read-through: GS basically frames Furukawa as another beneficiary of the ongoing AI cluster/network scaling cycle, where optical connectivity, datacenter infrastructure, and power/network components continue seeing structurally stronger demand. So despite the huge rerating across AI infrastructure names, Furukawa’s valuation still doesn’t fully reflect the earnings power of the cycle.

From yesterday: Rosenblatt Securities staying very bullish on the DRAM cycle RBL says mobile DRAM prices continue rising sharply as AI-driven demand keeps outpacing supply. - DRAM supply expected to remain tight through 2027 - Mobile DRAM contract prices jumped ~75% QoQ in Q2 after a huge Q1 increase - AI servers and hyperscaler demand continue pulling more DRAM/HBM supply toward the datacenter market - Server DRAM + HBM expected to reach ~60% of the DRAM market by 2028 - Rosenblatt believes OEMs will keep prioritizing pricing discipline and profitability over chasing volume