Wedbush analysts said their recent electronics supply chain tour through Asia provided them with “only more conviction” around a number of incrementally positive trends in Cloud Service Provider (CSP) requirements as well as now certain areas of consumer spend.
In artificial intelligence (AI) spending, they wrote that “any revisions appear to be to the upside,” while CSP demand for standard compute servers “is better than previously anticipated.”
On the computer memory side, the analysts believe better than expected demand for server compute and to a lesser extent PCs is driving increased demand for both dynamic random-access memory (DRAM) and Solid State Drives (SSDs).
They added that with hard disk drive (HDD) component shipments (and builds) expected to increase modestly quarter over quarter, Wedbush sees room for upside (both pricing and volume) particularly for Western Digital Corp (NASDAQ:WDC), and to a lesser extent Seagate Technology Holdings PLC (NASDAQ:STX).
The analyst also noted that the combination of strong AI demand, standard server improvement, improving Apple Inc forecasts, and even better than expected mature foundry fundamentals all point to strong or improving end markets for Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) (TSMC).