Optical Interconnect Research

First Light

Sunday, September 27, 2026 · AM

Hong Kong

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    Trump-Xi Summit Produces $30B Tariff Deal and AI Incident Dialogue Channel

    HIGH IMPACT · Axios · 2026-09-26 22:34 UTC

    Following a state visit by Xi Jinping, the US and China agreed to cut tariffs on approximately $30 billion worth of goods spanning farm products, toys, and logs, while committing to 'more favorable tariff treatment' for bilateral trade more broadly. The two sides also established a formal 'Super Intelligence' AI consultative body and a dedicated channel for managing AI-related incidents. Bloomberg notes the trade truce leaves key structural issues unresolved, and sources indicate no new Boeing deal was reached. Markets are awaiting Monday's open to price in the outcome, with the Hang Seng sliding ~1% during the week as tech stocks lost momentum.

    Why it matters: The tariff reduction on $30B of goods and the trade truce extension reduces near-term escalation risk for HK-listed exporters and China-exposed equities, but the absence of structural resolution on semis, EVs, and strategic sectors means upside is capped and investors should not reprice a durable decoupling reversal. The AI dialogue channel is a cross-read for US-China tech governance — relevant to AI infra and HK-listed tech multiples.

  2. 2

    Trump Says Xi 'Understands' Taiwan Position; Cross-Strait Risk Ambiguity Persists

    HIGH IMPACT · The Japan Times · 2026-09-27 01:40 UTC

    After the Trump-Xi summit, Trump publicly stated that Xi 'understands' his position on Taiwan, while a separate report from The Straits Times cited a Taipei official saying the US 'very much' understands Taiwan's defence needs. The summit produced no formal statement on Taiwan, leaving the cross-strait risk premium unresolved. Analysis from multiple outlets characterizes the broader summit outcome as buying time rather than resolving structural rivalry, with geopolitical ambiguity around tech, defence, and Taiwan remaining intact.

    Why it matters: Cross-strait tension is the primary tail risk for HK and Taiwan-linked equities and for Asian risk premiums broadly; the lack of explicit Taiwan language in summit outcomes preserves uncertainty and argues against fully unwinding geopolitical hedges despite the trade truce optics.

  3. 3

    HKEX to Launch Yuan-Denominated Gold Futures Contract

    MEDIUM IMPACT · GoldSeek · 2026-09-27 09:07 UTC

    Hong Kong Exchange is set to launch a yuan-denominated gold futures contract, expanding its commodity derivatives suite and deepening RMB internationalisation through the city's financial markets. The move positions HKEX as a bridge between mainland China's commodity demand and international capital, offering an RMB-priced risk management instrument at a time when US-China financial decoupling concerns persist. No specific launch date or contract specifications were detailed in available reports.

    Why it matters: A CNY gold futures contract at HKEX incrementally advances RMB internationalisation and could attract flows from both mainland and international institutions seeking to hedge gold exposure without USD conversion risk — a positive structural read for HKEX's derivatives revenue mix and for the broader RMB asset ecosystem thesis.

  4. 4

    HK Property Buyers Rush New Launches Ahead of Expected Rate Rises

    MEDIUM IMPACT · Business - South China Morning Post · 2026-09-27 10:56 UTC

    Hong Kong developers sold out more than 290 new flats launched over the weekend as buyers moved to lock in mortgages ahead of anticipated local interest rate increases following the US Federal Reserve's first rate hike in over three years. Major HK banks have held rates steady so far despite the Fed move, but agents expect local rates to rise within months. The sell-out pace signals that end-demand remains price-sensitive to rate expectations and that the window of stable local rates is being priced as temporary.

    Why it matters: A sell-out driven by rate-rise fear rather than genuine demand recovery is a cautionary signal for HK property developers — near-term volumes may pull forward, but if local banks pass on the Fed hike, secondary market sentiment and new launch pricing could deteriorate, pressuring NAV-based valuations for listed developers.

  5. 5

    China Consumer Stocks Face Structural Underperformance as Capital Rotates Into AI

    MEDIUM IMPACT · The Business Times · 2026-09-27 04:24 UTC

    Multiple reports citing market data and analyst commentary indicate China consumer equities are on track for a prolonged underperformance cycle as institutional and retail capital accelerates rotation into AI and tech infrastructure plays. The narrative is reinforced by Alibaba's announcement of a new AI accelerator described as China's most powerful, signalling major capex commitment. The Business Times and Traders Union both frame this as a potential 'lost decade' for consumer-facing A-share and HK-listed names relative to AI-leveraged peers.

    Why it matters: This rotation dynamic is a direct read on HK-listed consumer and retail names (discretionary, F&B, tourism) versus tech/AI-levered HK listings — it argues for sustained multiple compression in consumer and supports the bull case for HK-listed Chinese AI infrastructure and cloud equities, with cross-read implications for global luxury and consumer sector positioning in China.

Japan

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    US Treasury's Bessent Defends JPY Intervention, Flags Stable Yen as Priority

    HIGH IMPACT · Stocktwits / Exchange Rates UK · 2026-09-27 03:07 UTC

    US Treasury Secretary Scott Bessent publicly defended US intervention to support the Japanese yen, stating it is 'very important to have a stable yen.' This marks an unusually explicit endorsement of JPY stabilization from the US side, suggesting bilateral coordination on FX policy. Concurrently, JPMorgan flagged USD/JPY resistance at 156.50–156.60 following a recent yen rebound, implying the market sees limited downside from current levels. The Fed's reshaping of forex markets is also cited as a driver of the dollar's partial rebound, adding a cross-current to the JPY carry trade.

    Why it matters: US political cover for JPY intervention materially reduces the tail risk of a disorderly yen weakening, which was the key trigger for the August 2024-style carry unwind — investors long yen-funded risk assets should reassess downside hedge sizing. JPMorgan's 156.50–156.60 ceiling provides a near-term tactical anchor for USD/JPY positioning.

  2. 2

    US-China Summit Yields $30bn Tariff Relief Deal; Taiwan Ambiguity Lingers

    HIGH IMPACT · Nikkei Asia · 2026-09-27 13:31 UTC

    The Trump-Xi Washington summit produced a reciprocal tariff relief agreement covering $30 billion of 'nonsensitive' goods on each side, a concrete but limited de-escalation. Analysts note Chinese EVs are still expected to enter the US market despite no comprehensive auto deal, suggesting structural competitive pressure on US and Japanese automakers persists. Trump stated Xi 'understands' his position on Taiwan without signaling any policy shift, while Japan's PM Takaichi moved to dispel alliance doubts as Beijing leverages summit symbolism against Tokyo. Japan's LDP is also facing fresh domestic scrutiny over political funding scandals tied to Takaichi's appointments.

    Why it matters: The partial tariff relief is a positive risk signal for global trade-exposed equities and commodity demand (China consumption read), but the narrow scope ($30bn bilateral) and unresolved EV/tech issues mean consensus China growth upgrade expectations should remain cautious; Japan's diplomatic positioning post-summit is a key watch for defense and alliance-sensitive sectors.

  3. 3

    Nikkei Faces Dividend-Season Test After Five-Day Rally; Carry Unwind Debate Active

    MEDIUM IMPACT · News On Japan / Chartbook · 2026-09-27 12:57 UTC

    The Nikkei 225 is approaching a technical inflection as end-of-September dividend capture flows potentially reverse after a five-session rally. Chartbook/Adam Tooze commentary on the yen-carry-trade unwind is circulating, keeping the mechanics of JPY-funded positions in focus for market participants. Pawn shop activity is reportedly rising alongside living cost pressures, a second-order signal of household stress that could weigh on domestic consumer discretionary names. The BoJ rate trajectory remains the dominant variable, with a separate Korean-language piece noting Japan raised rates 'for the first time in 31 years' but yen weakness is expected to persist.

    Why it matters: Dividend repatriation flows and carry unwind risk are the two near-term tactical drivers for Nikkei positioning; a reversal of the five-day rally combined with any BoJ hawkish signal could amplify downside, creating a cross-asset read for global risk sentiment given Japan's role as a major funding currency.

  4. 4

    Yen Stablecoin Spike on Korea's Upbit Inflicts Heavy Investor Losses

    MEDIUM IMPACT · Chosunbiz · 2026-09-27 08:56 UTC

    A yen-denominated stablecoin surged abnormally on South Korea's Upbit exchange, causing significant losses for retail investors caught on the wrong side of the move. The episode highlights thin liquidity and price manipulation risk in JPY-linked crypto instruments on Korean venues. This follows Japan's arrest of two suspects in an ¥81 million crypto theft via a police impersonation scam, underscoring ongoing enforcement and market integrity concerns in Japan-adjacent crypto markets. The combination of these events puts regulatory spotlight on yen-pegged digital assets at a sensitive moment for both Japanese and Korean virtual asset policy.

    Why it matters: Cross-read to Asia stablecoin regulation: a high-profile loss event on a major Korean exchange could accelerate regulatory scrutiny of yen stablecoins and JPY-linked digital assets, with potential implications for FSA/FSC rulemaking and the broader Asia stablecoin framework that global crypto-adjacent equities are pricing in.

  5. 5

    Murakami Launches ¥125/Share Tender Offer for Sankei Real Estate (2972 JP)

    MEDIUM IMPACT · Smartkarma · 2026-09-27 02:00 UTC

    Activist investor Yoshiaki Murakami has launched a tender offer for Sankei Real Estate (TSE: 2972) at ¥125 per share, continuing his campaign targeting undervalued Japanese REITs and real estate vehicles. The bid follows the well-established Murakami playbook of pressuring management on capital efficiency and asset monetization. This is a live event-driven opportunity with a defined price target and timeline, relevant to Japan small/mid-cap real estate positioning.

    Why it matters: Murakami tender activity is a reliable leading indicator of broader governance-pressure campaigns in Japanese real estate; the bid at ¥125 sets a floor and signals continued activist pressure on capital allocation in J-REITs, which is a key pillar of the Japan corporate reform trade that global EM rotation investors are monitoring.

Korea

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    South Korea Tax Windfall Seen Topping 50 Trillion Won on Semiconductor Boom

    HIGH IMPACT · Yonhap / finance.biggo.com · 2026-09-27 05:02 UTC

    South Korea's fiscal revenue is tracking more than 50 trillion won above budget forecast for 2026, driven primarily by surging corporate taxes from the semiconductor boom. The windfall is expected to push the Future Response Fund above 200 trillion won, with 95% of projects kept intact and only six facing cuts. Government budget flexibility materially improves, reducing the probability of fiscal drag or emergency spending cuts. The chip-driven revenue surge confirms that Korea's semi cycle uplift is flowing through to the sovereign level, not merely sector P&Ls.

    Why it matters: A 50+ trillion won upside surprise to government revenue reduces tail risk of fiscal tightening and raises probability of additional strategic investment stimulus — both positive for Korean risk assets and a cross-read on the depth of the AI-driven semiconductor supercycle benefiting Samsung and SK Hynix earnings.

  2. 2

    KOSPI Holds Above 7,000; US PCE Data and Micron Earnings Seen as Key Near-Term Catalyst

    HIGH IMPACT · Chosunbiz / finance.biggo.com · 2026-09-26 22:25 UTC

    The KOSPI rose 2.7% in a holiday-shortened week to settle above the psychologically important 7,000 level, powered by a chip-sector rally and foreign inflows into semis. Market participants are now focused on US PCE inflation data and Micron's September 30 earnings as the next directional catalyst for Korean memory names. Domestic investors continue to rotate into US assets even as KOSPI outperforms, suggesting sustained structural outflow pressure on the Korean won. KOSPI 200 ETFs delivered 81% YTD returns, outpacing bank deposits 40-fold and drawing retail reallocation.

    Why it matters: Micron's earnings on September 30 will set near-term pricing and demand assumptions for HBM/DRAM — a direct read-through to SK Hynix and Samsung guidance consensus; a miss or cautious outlook could quickly reverse the KOSPI's above-7,000 consolidation.

  3. 3

    Korea's $22.3 Billion US Power Infrastructure Investment Triggers Second-Wave Orders for ESS and Grid Equipment Makers

    MEDIUM IMPACT · Korea Times News · 2026-09-27 13:27 UTC

    As part of the broader $350 billion Korea-US strategic investment package, a $22.3 billion project to build a natural gas power plant in Encinal, Texas is catalyzing a second wave of orders for Korean ESS battery makers and power grid equipment companies. AI data center electricity demand is the primary demand driver for the Texas plant. Korean battery and grid equipment firms stand to capture significant procurement volumes, with industrial conglomerates such as Hanwha and LS likely among beneficiaries. This follows the first formally announced US strategic investment project from Seoul.

    Why it matters: This is a measurable order-flow catalyst for Korean ESS and power equipment names — moving the investment thesis from 'policy aspiration' to 'contracted revenue pipeline' — and validates the AI power infrastructure buildout as a durable export theme for Korea beyond semiconductors.

  4. 4

    Samsung Stock Falls ~10% Ahead of Earnings; Mixed Outlook and Technical Breakdown Risk at $183

    HIGH IMPACT · TradingKey / Korea Times News · 2026-09-27 03:26 UTC

    Samsung Electronics shares dropped nearly 10% in the lead-up to its earnings preview, with analysts flagging a mixed profit outlook despite AI-driven HBM demand. The stock is approaching a key technical support level at $183, with risk of a further breakdown if earnings disappoint. Parental leave rates declined simultaneously at both Samsung and SK Hynix for the first time, a secondary signal of intense employee focus on performance bonuses tied to record-high expected profits. Chip and shipbuilding exports are forecast to remain strong in Q4 per trade group guidance, providing a counter-narrative.

    Why it matters: Samsung's near-term earnings trajectory is the single largest weight on KOSPI direction; a 10% pre-earnings decline creates both event risk and a potential re-rating opportunity — and any guidance on HBM ramp pace or foundry utilisation is a direct cross-read to global AI infrastructure capex assumptions.

  5. 5

    Korea-Mexico Trade Agreement Talks Accelerate, Covering Minerals and Supply Chain Cooperation

    MEDIUM IMPACT · 헤럴드경제 / Yonhap News Agency · 2026-09-27 01:34 UTC

    South Korea's industry minister met with Mexico's economy secretary and agreed to establish a bilateral consultative body to advance a free trade agreement, with particular focus on critical minerals and industrial supply chains. The move is part of Seoul's broader strategy to capitalize on US nearshoring trends and diversify export markets amid US-China trade tensions. Mexico's role as a manufacturing hub for US-bound goods makes it a strategically important partner for Korean automakers, battery firms, and electronics exporters seeking tariff-advantaged access to the US market. Talks are described as accelerating, suggesting a formal framework could materialize within the next 12–18 months.

    Why it matters: A Korea-Mexico FTA would materially reduce tariff exposure for Korean manufacturers operating in or supplying through Mexico to the US — a structural positive for Hyundai/Kia, LG Energy Solution, and Samsung SDI, and a signal that Seoul is actively building supply-chain resilience against US protectionism escalation.

India

  1. 1

    RBI Rate-Hike Expectations Rise 50-75 bps; Repo Could Hit 5.75-6%

    HIGH IMPACT · Markets-Economic Times · 2026-09-27 05:15 UTC

    Archit Shah, CIO at Zurich Kotak General Insurance, expects the Reserve Bank of India to hike the repo rate by 50-75 basis points toward 5.75-6% if inflation, crude oil prices, and global yields remain elevated. This comes as Brent crude trades above $104 and US 10-year Treasury yields exceed 5.1%, both of which are feeding imported inflation and rupee pressure. Shah advises against duration extension, recommending carry and roll-down strategies instead. The rupee is currently trading in a stressed 95.50-96.50 band, compounding the policy dilemma.

    Why it matters: A 50-75 bps RBI hike would materially reprice Indian fixed income and compress equity multiples, particularly in rate-sensitive sectors (banks, NBFCs, real estate); it also signals a divergence from the global easing cycle that investors may be underpricing.

  2. 2

    FIIs Net Sellers of ₹18,531 Crore in September; DIIs Absorb ₹52,617 Crore

    HIGH IMPACT · mint - markets · 2026-09-27 11:56 UTC

    Foreign institutional investors have offloaded a net ₹18,531 crore (~$2.2bn) from Indian equities in September 2026, while domestic institutional investors have deployed ₹52,617 crore (~$6.3bn) as a countervailing force, holding Nifty above the 23,000 level. Elevated crude prices, US 10-year yields above 5.1%, rupee weakness, and escalating US-Iran geopolitical tensions are cited as the principal drivers of FII retrenchment. Market experts flag October as a potential bottom, partly contingent on US yield peak expectations ahead of midterm elections. Strong DII flows are absorbing selling pressure but may not prevent a further leg down if crude or global yields spike.

    Why it matters: The divergence between FII outflows and DII absorption is the key near-term structural question for Indian equities; if crude remains above $100 or the rupee breaches 96.50, DII capacity to offset may be tested, increasing index downside risk.

  3. 3

    EPFO Wage Ceiling Raised to ₹25,000, Adding ~1 Crore New Formal-Sector Workers

    MEDIUM IMPACT · Economy-News-Economic Times · 2026-09-27 08:50 UTC

    The Employees' Provident Fund Organisation raised the mandatory wage ceiling from ₹15,000 to ₹25,000 effective September 17, 2026, the first revision in over a decade. The change is expected to enroll approximately one crore additional workers into the formal social-security net, with mandatory employee PF contributions rising to ₹3,917 per month for those newly covered. This increases employer compliance costs and reduces take-home pay for the newly enrolled cohort, which may weigh on discretionary consumption at the lower-income segment. The policy also expands the long-term pool of savings channeled into EPFO's equity exposure via ETFs.

    Why it matters: Higher employer PF burden across labour-intensive sectors (retail, logistics, manufacturing) compresses margins; simultaneously, incremental EPFO ETF flows add a structural SIP-like bid to large-cap Indian equities, partially offsetting FII selling.

  4. 4

    Embraer Partners Mahindra for IAF 60-Aircraft KC-390 Tender, Adani for Commercial Aviation

    MEDIUM IMPACT · economictimes.indiatimes.com · 2026-09-27 11:30 UTC

    Brazilian aerospace firm Embraer confirmed Mahindra Group as its Indian partner for the Indian Air Force's Request for Proposal covering 60 medium transport aircraft, pitching the KC-390 against the Tata-Lockheed Martin C-130J offering. Separately, Embraer will partner with Adani for commercial aircraft opportunities. Embraer highlighted KC-390's superior payload and performance metrics, and flagged plans to expand its Indian supply chain and MRO footprint to serve global requirements. Hindustan Aeronautics Limited (HAL) is an adjacent read given its role in potential local manufacturing offset obligations.

    Why it matters: The tender outcome will determine whether Mahindra or Tata-Lockheed captures a multi-billion-dollar defence production programme with decades of MRO revenue; the Adani-Embraer commercial tie-up adds a new entrant dynamic to India's duopoly-adjacent aviation supply chain.

  5. 5

    India's Busiest IPO Week: 20 Issues to Raise ₹1,292 Crore Amid Market Stress

    MEDIUM IMPACT · Markets-Economic Times · 2026-09-27 04:13 UTC

    Twenty IPOs are set to open for subscription in the week of September 28, making it the heaviest primary-market week of 2026; four mainboard issues led by SRIT India, Vishal Nirmiti, Nityas Gems & Jewellery, and Shah Investor's Home seek to raise ₹595 crore, with 16 SME offerings targeting ₹697 crore. The pipeline arrives against a backdrop of a seven-week Nifty decline, elevated FII outflows, and Brent crude above $104—conditions that historically compress IPO subscription rates and grey-market premiums. Pre-IPO unlisted market data shows wide dispersion: MSEI +125% vs. Zepto -48%, indicating selective risk appetite rather than broad enthusiasm.

    Why it matters: Subscription rates and listing-day performance across these 20 issues will be a real-time read on retail and HNI risk appetite under stress; weak outcomes would signal further primary-market chill and defer the pipeline of larger IPOs (including Cars24's anticipated April filing).

Asia Tech

  1. 1

    SK Hynix Weighs US Memory Production to Counter Tariff Risk

    HIGH IMPACT · The Korea Herald · 2026-09-27 05:14 UTC

    SK Hynix is actively evaluating establishing memory chip manufacturing in the United States, according to the Korea Herald, as tariff exposure on Korean-origin semiconductors intensifies. The consideration marks a potential structural shift for the world's leading HBM supplier, which currently produces all advanced memory in Korea. A US production footprint would raise capex requirements materially and could alter the competitive cost structure versus Samsung and Micron. The move follows broader US-Asia export control and tariff pressure compelling Asian chipmakers to localize supply chains.

    Why it matters: Any confirmed US manufacturing commitment by SK Hynix would shift consensus on its capex trajectory, margin profile, and the relative competitive positioning of Micron (which already has US fabs); it also sets a precedent for how tariff policy reshapes the global memory supply chain and HBM sourcing for Nvidia and hyperscalers.

  2. 2

    Goldman Sachs Projects $1.2 Trillion Big Tech AI Infra Spend by 2027

    HIGH IMPACT · the-decoder.com · 2026-09-27 08:18 UTC

    Goldman Sachs has published a forecast that major US technology companies will collectively spend $1.2 trillion on AI infrastructure through 2027, described as dwarfing prior Wall Street consensus estimates. The scale of projected demand has direct implications for memory (HBM, DRAM), advanced packaging, and power/cooling suppliers concentrated in Korea and Japan. Korean chipmakers SK Hynix and Samsung, as well as Japanese equipment makers Tokyo Electron, are primary beneficiaries of sustained hyperscaler capex at this magnitude. The forecast reinforces the durability of the AI infrastructure supercycle as a demand driver.

    Why it matters: A $1.2 trillion capex figure well above consensus is a direct positive revision to the demand outlook for HBM and AI server components; investors should reassess supply tightness assumptions for SK Hynix HBM and reconsider whether current multiples for Korean memory and Japanese semicon equipment fully reflect the cycle length.

  3. 3

    SoftBank Executes Largest-Ever High-Yield Corporate Bond Sale

    HIGH IMPACT · 朝日新聞 · 2026-09-27 10:42 UTC

    SoftBank has completed what is being reported as the largest high-yield corporate bond sale in history, according to Asahi Shimbun. The deal signals strong institutional appetite for SoftBank paper despite its non-investment-grade rating and elevated debt load, and provides the group with a significant new liquidity tranche. Proceeds are likely earmarked for continued AI and tech investment activity, including potential Vision Fund deployments and its domestic AI infrastructure push in Japan. The transaction tests and, by completing successfully, validates global credit market access for Japanese tech conglomerates.

    Why it matters: The deal's success recalibrates assumptions around SoftBank's financial flexibility and ability to fund its AI ambitions without equity dilution; it also signals that credit markets are assigning a low probability to a near-term SoftBank distress scenario, a key tail risk for holders of SoftBank equity or convertibles.

  4. 4

    LG Electronics Joins Nvidia Partner Network for AI Data Center Cooling

    MEDIUM IMPACT · koreajoongangdaily.com · 2026-09-27 06:34 UTC

    LG Electronics has been formally admitted into Nvidia's partner ecosystem with a focus on AI data center thermal management and cooling solutions, according to Korea JoongAng Daily. This positions LG's B2B division to capture spending from the rapid buildout of AI server infrastructure, diversifying revenue away from consumer appliances. The partnership leverages Nvidia's qualification and certification process, giving LG access to hyperscaler and enterprise data center procurement pipelines. It represents a meaningful step in LG Electronics' strategic pivot toward higher-margin AI infrastructure services.

    Why it matters: LG Electronics' entry into Nvidia's certified cooling ecosystem is a tangible competitive structure change that could re-rate the B2B segment; investors should revisit LG Electronics' sum-of-the-parts valuation as AI cooling becomes a multi-billion-dollar recurring revenue line with better margins than consumer electronics.

  5. 5

    Korean Apple Suppliers Samsung and LG Face Margin Squeeze Despite iPhone Duo Launch

    MEDIUM IMPACT · KED Global · 2026-09-27 09:34 UTC

    Korean suppliers to Apple, including Samsung and LG, are reporting profit compression despite the launch of the latest iPhone Duo flagship cycle, according to KED Global. The squeeze reflects intensifying price competition among component suppliers, Apple's continued diversification of its supply chain toward non-Korean vendors, and unfavorable FX dynamics. Samsung's display and component divisions and LG's camera module and display businesses are specifically cited as under pressure. This is occurring even as iPhone unit volumes are sustained, pointing to a structural pricing problem rather than a demand issue.

    Why it matters: Margin compression at Apple's Korean suppliers despite a live flagship cycle is a negative read-through for Samsung Electronics' components segment earnings estimates and challenges the assumption that the iPhone ramp translates proportionally to Korean supplier profitability; it also signals continued Apple supply chain diversification away from Korea as a secular headwind.

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