JPJ.P. MorganSELL
JPM Asia Technology
- **Shareholder Returns & LTA Structure**: SEC/SKH lift return pool to >50% of accumulated FCF; LTA coverage 50%-70% (SEC: ~70%, Hynix: >50%, Kioxia: 50% for '27-'28), signaling strong commitment to shareholder value amid cautious LTA stance.
- **AI-Driven Demand Surge**: DRAM demand growth 30%+ (vs historical 15-20%) from agent-AI CPU demand; NAND suppliers adopt eSSD for KV-cache, TLC as primary, SLC/Z-NAND emerging for AI.
- **HBM Pricing Upside**: Upside risk to HBM ASP (+43% y-y) due to supplier negotiations; 2027 HBM ASP under review with S-D shortage variables, AI memory opportunity (DD% sales mix in 28E) with mainstream DRAM-like profitability.
- **China Competition Risk**: Chinese capacity expansion limited to consumer apps; geopolitical risks and yield issues restrict AI-grade memory access, making China competition a minor risk to AI hardware capex cycle.