Optical Interconnect Research

First Light

Monday, October 19, 2026 · PM

Hong Kong

  1. 1

    China Q3 GDP grows 4.5%, beating forecasts on AI-driven export surge

    HIGH IMPACT · Financial Times · 2026-10-19 05:08 UTC

    China's economy expanded 4.5% year-on-year in Q3 2026, topping consensus estimates, with sequential growth of 1.2% QoQ. Growth was powered by a surge in AI chip and tech exports while domestic demand remained weak — property investment fell 20.6% YoY in the first nine months. The divergence between a robust export engine and anaemic household consumption reinforces a K-shaped recovery narrative. China stocks initially opened lower before edging higher, as investors weighed the external strength against persistent deflation risk at home.

    Why it matters: A 4.5% print keeps China on track for its ~5% full-year target, reducing near-term stimulus urgency and dampening expectations for aggressive PBoC easing — but the domestic weakness read-through is negative for global luxury, consumer staples, and EM credit. The AI export driver is a cross-read to global semis demand and US tech capex assumptions.

  2. 2

    China proposes export controls on AI and solar photovoltaic technologies

    HIGH IMPACT · digitimes · 2026-10-19 02:41 UTC

    China's Ministry of Commerce has put forward export control proposals covering 12 technology categories used in photovoltaic equipment manufacturing and, separately, advanced AI systems, citing national security grounds. The dual-use controls follow a broader tightening of China's export control framework. If enacted, restrictions would affect cross-border technology transfer in solar supply chains and limit foreign access to China's frontier AI models, with potential impacts on European and Asian solar manufacturers that rely on Chinese equipment technology.

    Why it matters: China's escalating export control regime is a direct mirror to US semiconductor controls and creates a new variable for solar supply chain modelling (cross-read to European and US solar equities) and for assessing the competitive landscape in AI — restrictions on China's advanced AI exports could paradoxically reduce near-term competitive pressure on US AI incumbents while signalling domestic protectionism.

  3. 3

    HKEX delays T+1 settlement target to second half of 2028

    MEDIUM IMPACT · fintechnews.hk · 2026-10-19 01:56 UTC

    Hong Kong Exchanges and Clearing (HKEX) has pushed its T+1 settlement implementation target to H2 2028, citing the need for system upgrades and market participant readiness. The original timeline had been more aggressive, with the delay reflecting both technical complexity and the need to align with custodian and broker infrastructure upgrades. HKEX indicated it will deploy tools to support market readiness ahead of the transition.

    Why it matters: The delay reduces near-term operational cost pressure on brokers and custodians active in Hong Kong markets, but also signals slower progress on HKEX's structural competitiveness roadmap relative to mainland China and other regional exchanges — relevant to positioning in HKEX stock (0388.HK) and to global asset managers assessing HK market infrastructure risk.

  4. 4

    CICC previews Hang Seng Tech Index expansion of 20 additions in quarterly review

    MEDIUM IMPACT · BigGo Finance · 2026-10-19 06:05 UTC

    CICC's preview of the upcoming Hang Seng Index quarterly review anticipates approximately 20 new additions to the Hang Seng Tech Index, alongside Zijin Gold International and others potentially joining the blue-chip Hang Seng Index. If confirmed, this would represent one of the largest single-cycle expansions of the HSTECH index. Passive and index-tracking fund inflows would be required into constituents added to the index, creating near-term demand for newly included names.

    Why it matters: A 20-stock expansion in the HSTECH index is a significant passive flow trigger — investors should identify likely inclusions now to front-run forced buying by index trackers, and the event reinforces the broadening of Hong Kong's tech equity universe as a vehicle for mainland tech exposure.

  5. 5

    Mainland Chinese buyers sustain Hong Kong property demand despite Beijing's 20% offshore tax

    MEDIUM IMPACT · Business - South China Morning Post · 2026-10-19 06:00 UTC

    Despite a July ruling by China's Ministry of Finance imposing a 20% tax on rental income and capital gains from overseas properties held in offshore trusts by mainland residents, agents report mainland Chinese investors remain a primary driver of Hong Kong residential property transactions. Buyers appear to be adjusting deal structures rather than exiting the market, suggesting the policy's effective incidence is being partially mitigated through legal restructuring. China's property investment fell 20.6% YoY in the first nine months domestically, amplifying the relative appeal of Hong Kong assets.

    Why it matters: Resilient mainland demand underpins Hong Kong residential property prices and is a positive read-through for HK-listed property developers and REITs; it also suggests capital outflow pressure from China into HK real estate persists despite policy friction, with implications for HK dollar peg demand and banking sector mortgage book quality.

Japan

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    BoJ Governor Ueda signals inflation near 2% target, keeps rate-hike path open

    HIGH IMPACT · Firstpost / FXStreet / TradingView (BigGo Finance) · 2026-10-19 07:20 UTC

    BoJ Governor Ueda stated that Japan's underlying (core) inflation is 'quite close' to the 2% target, reaffirming the bond-purchase taper stance is unchanged and hinting that further rate hikes could help stabilize long-term bond yields. The yen held near 158.00 vs USD following the remarks, suggesting markets are not yet pricing a near-term move aggressively. Multiple sources confirm the hawkish framing ahead of the October policy meeting. This is the clearest pre-meeting signal yet that the BoJ is building a case for its next hike, with the week-ahead note flagging policymakers are 'set for more rate hikes.'

    Why it matters: BoJ rate-hike trajectory is the single most important driver of JPY carry unwind risk — a hawkish pivot or surprise hike compresses the yield differential that funds global carry trades, with direct knock-on effects on EM risk assets, US equity multiples, and leveraged positions across asset classes. Investors should reassess the probability of an October or December hike and the associated JPY/USD range.

  2. 2

    PM Takaichi rejects weak-yen and high-rate criticism; fiscal-FX tension persists

    HIGH IMPACT · Bloomberg / CNBC / TradingView · 2026-10-19 02:15 UTC

    Prime Minister Sanae Takaichi publicly denied driving yen weakness and high interest rates, pushing back against market and opposition criticism ahead of a week in which she is reportedly seeking a temporary sales-tax cut on food. Bloomberg confirmed she denied steering JPY/USD policy. The juxtaposition of a hawkish BoJ and a PM seeking fiscal easing (food tax cut) creates a policy-mix tension that markets are watching closely. Japan is simultaneously running English-language fiscal outreach to soothe global bond investors anxious about debt sustainability.

    Why it matters: Takaichi's fiscal impulse (sales-tax cut) directly complicates BoJ normalization math by potentially re-stoking inflation and widening the fiscal deficit — this political-monetary conflict is a key risk variable for JGB yields and JPY direction. If the tax cut advances, consensus forecasts for BoJ terminal rate and JGB 10-year yield may need revision.

  3. 3

    Nidec founder faces civil liability ruling; shares hit decade low, Oasis eyes EGM

    MEDIUM IMPACT · Japan Times / Nikkei Asia · 2026-10-19 03:01 UTC

    Nidec's legal crisis has deepened with a civil liability finding against founder Shigenobu Nagamori, sending shares to a decade low. Activist fund Oasis Management is now reported to be considering calling an extraordinary general meeting to revamp the board, and has previously raised the prospect of privatization options. The combination of founder liability, board overhaul pressure, and a decade-low share price signals a genuine governance inflection point at one of Japan's most prominent industrial-tech companies.

    Why it matters: Nidec is a bellwether for Japan's corporate governance reform narrative — Oasis's EGM push and privatization talk could catalyze a re-rating event (or de-listing premium) and sets a precedent for activist success at founder-controlled conglomerates, a key assumption underpinning the Japan governance-reform equity thesis driving foreign inflows.

  4. 4

    Kioxia shares under pressure from record margin-loan overhang on TSE

    MEDIUM IMPACT · Japan Times · 2026-10-19 03:05 UTC

    Kioxia Holdings carried the largest outstanding leveraged (margin) long position of any TSE-listed company as of October 15, creating significant technical downside risk if forced unwinding accelerates. The stock is already facing headwinds from the overhang. Kioxia is Japan's sole NAND flash/storage pure-play and recently completed its IPO, making its share price behavior a read on domestic retail appetite for tech listings and memory sector sentiment.

    Why it matters: A margin-call-driven selloff in Kioxia would pressure NAND pricing sentiment and provide a cross-read on memory sector supply/demand dynamics relevant to global semis investors; it also signals stress in Japan's retail leveraged-trading ecosystem, which has been a key source of domestic equity demand post-TSE reform.

  5. 5

    Daiichi Life offers $4.4 billion to acquire remaining stake in Australia's Challenger

    MEDIUM IMPACT · Japan Times · 2026-10-19 04:22 UTC

    Daiichi Life Insurance has made a $4.4 billion bid to buy out the rest of Challenger, Australia's largest annuity provider, in a full takeover that would give the Japanese insurer control of a fast-growing retirement income platform. This is a large outbound M&A move by a major Japanese life insurer, consistent with the sector's hunt for yield and growth offshore as domestic rates remain suppressed relative to liabilities. The deal size is material for both Daiichi's capital allocation and Challenger's minority shareholders.

    Why it matters: Japanese life insurers' outbound M&A is a structural capital flow story — this deal reinforces the trend of Japanese institutional capital recycling into foreign yield assets, relevant to FX (yen outflows), Australian financial sector positioning, and the broader thesis around Japanese insurer balance-sheet transformation under BoJ normalization.

Korea

  1. 1

    KOSPI Plunges 3%+ at Open, Rebounds on Pension Buying; Finance Minister Signals Stabilization Fund

    HIGH IMPACT · BigGo Finance / Korea Times / Korea JoongAng Daily · 2026-10-19 06:25 UTC

    KOSPI opened down over 3% on October 19 amid a U.S. semiconductor/tech shock, with Samsung Electronics and SK Hynix leading declines; the index broke below the 5,500 level before recovering to close up approximately 1.75%. Korean pension funds net-bought KRW 190 billion (~$138.5M) in Samsung Electronics and SK Hynix, cushioning the fall. Finance Minister Lee Hyung-il stated market stabilization measures — including a stabilization fund — are ready if volatility widens, while also calling the KRW's earlier slide 'out of line with fundamentals' and flagging a Korea-U.S. currency swap as 'meaningful and necessary.' Foreign investors sold a net KRW 26 trillion worth of Korean equities in the broader selloff period, representing a significant flow reversal. JPMorgan noted KOSPI valuations are at record lows but sees no near-term rebound catalyst.

    Why it matters: The severity of the selloff and the government's explicit readiness to deploy a stabilization fund marks a policy inflection point that investors must price; the KRW swap signal and FX intervention language directly affect carry positioning and EM capital flow assumptions for Korea-exposed portfolios.

  2. 2

    Bank of Korea Expected to Hold This Week; Rate Peak Seen at 3.50%

    HIGH IMPACT · Aju Press / Korea JoongAng Daily / 매일경제 · 2026-10-19 02:39 UTC

    An AJP poll of economists finds consensus that the Bank of Korea will hold rates at its upcoming meeting, with the terminal rate forecast peaking at 3.50%. Separately, Korea JoongAng Daily reported that BoK's earlier rate hikes are already curbing bond yields even as the KOSPI slides sharply, suggesting the yield curve is compressing. Finance Minister Lee Hyung-il simultaneously guided 2026 GDP growth at 3.4–3.6%, above the government's own 3.0% forecast and the IMF's baseline, partly driven by an AI-linked rebound in potential growth. The combination of a hold signal and above-consensus growth creates a nuanced backdrop: tighter financial conditions via KRW weakness but no imminent policy easing to cushion equity risk.

    Why it matters: A confirmed hold at 3.50% with upward GDP revision forces a reassessment of the BoK easing timeline that many investors had priced in; the GDP upgrade also moderates the bear case on Korean corporate earnings even as equity markets sell off.

  3. 3

    FSS Chief Flags SK Hynix Solidigm US IPO Conflicts with Korean Shareholder Protection Rules

    MEDIUM IMPACT · Korea Times News · 2026-10-19 07:32 UTC

    Financial Supervisory Service Governor Lee Chan-jin publicly stated that both the FSC and FSS view SK Hynix's potential U.S. listing of NAND subsidiary Solidigm as conflicting with Korean rules governing dual listings of parent and subsidiary companies. The statement came during a National Assembly audit, elevating regulatory risk for the transaction. SK Hynix separately announced a KRW 2 trillion (~$1.5B) loan guarantee program with the government and major banks to support domestic semiconductor suppliers, signaling continued state backing of the chip supply chain. The juxtaposition of regulatory pushback on the Solidigm IPO and government support for the broader supply chain reveals a policy tension between capital market liberalization and domestic retention of semiconductor value.

    Why it matters: A blocked or restructured Solidigm US IPO would remove a potential re-rating catalyst for SK Hynix and alter the NAND competitive landscape; the $1.5B supply chain guarantee signals meaningful fiscal commitment to Korea's semiconductor cluster ahead of further AI-driven capex cycles.

  4. 4

    Hyundai Rotem Acquires Hyundai Wia Defense Unit for $252M to Vertically Integrate K2 Tank Production

    MEDIUM IMPACT · Korea Times News / RTTNews · 2026-10-19 07:32 UTC

    Hyundai Rotem announced a KRW 358.4B ($252M) acquisition of Hyundai Wia's defense business, which manufactures key components for K9 howitzers and K2 main battle tanks, via a regulatory filing. The deal deepens vertical integration in Hyundai Rotem's flagship weapons platform ahead of anticipated export contracts. Q3 results released simultaneously showed net profit down 10.3% YoY to KRW 177.98B and operating profit down 11% to KRW 247.1B, though 9-month cumulative sales rose 11.2% YoY to KRW 4.68T, indicating the profit miss is margin-related rather than volume-driven. The acquisition is strategically timed as global defense procurement from Europe and other markets for K2 tanks accelerates.

    Why it matters: Vertical integration of the K2 supply chain removes a key bottleneck and margin drag at a time when Hyundai Rotem's order book is expanding internationally; investors should reassess margin recovery timelines post-acquisition and flag this as a competitive structure change in the global defense sector.

  5. 5

    Finda Becomes First Korean Fintech to Receive Regulatory Approval to Acquire Savings Bank

    MEDIUM IMPACT · Korea Times News · 2026-10-19 07:32 UTC

    The FSC subcommittee approved loan comparison platform Finda's application to acquire Daewon Savings Bank for approximately KRW 12B ($9M), pending final FSC confirmation Wednesday. This marks the first time a Korean fintech firm has been permitted to own a deposit-taking institution, with Finda intending to build an 'AI-native bank.' The precedent restructures the Korean fintech competitive landscape by allowing platform companies to access balance sheet lending rather than relying purely on referral fees. The acquisition price is modest, but the regulatory precedent is the key variable for sector re-rating.

    Why it matters: This regulatory first creates a new expansion pathway for Korean fintech platforms into banking, directly threatening traditional savings banks' deposit franchise and potentially triggering a wave of similar acquisition applications — a structural shift investors in Korean financials and fintech must price.

India

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    Finance Minister Sitharaman Flags FII Outflows of $63.6 Billion Since October 2024

    HIGH IMPACT · Markets-Economic Times · 2026-10-19 04:15 UTC

    Finance Minister Nirmala Sitharaman attributed India's equity underperformance to easy global liquidity enabling rapid exits, as foreign institutional investors have withdrawn $63.6 billion since October 2024, erasing nine years of cumulative inflows. The Nifty and Sensex are down over 12% over the period, with financials, autos and oil & gas bearing the heaviest FII selling. Rising US Treasury yields, a stronger dollar and AI-driven capital reallocation toward US tech are cited as structural pull factors. Domestic institutional investors have partially offset the outflow but are insufficient to close the gap.

    Why it matters: The scale and duration of the FII reversal reframes India equity positioning from a tactical dip to a structural flow problem — investors must reassess the DII-offset assumption and gauge whether a US-India trade deal or RBI easing could catalyse a reversal.

  2. 2

    US-India Trade Deal 'Very Close' to Finalisation, Says Secretary Rubio

    HIGH IMPACT · Economy-News-Economic Times · 2026-10-19 05:53 UTC

    US Secretary of State Marco Rubio stated that Washington is very close to finalising a bilateral trade deal with India, potentially removing a key overhang on Indian exports and FII sentiment. No specific tariff schedules or timelines were disclosed. The announcement comes as India's Sensex is down over 12% from its peak and the rupee sits at 94.80 against the dollar. A deal would have direct implications for sectors facing US tariff exposure including pharmaceuticals, IT services, textiles and auto components.

    Why it matters: A US-India trade deal would be a significant positive catalyst for FII re-engagement and could shift consensus assumptions on earnings growth for export-oriented Indian sectors; it also reduces a tail-risk scenario of escalating tariffs that has partly driven the FII exodus.

  3. 3

    PSU Banks Surge 3–8% While Private Lenders Drop 5% on Divergent Q2 Earnings

    HIGH IMPACT · economictimes.indiatimes.com · 2026-10-19 06:24 UTC

    Punjab National Bank shares jumped up to 8% after Q2FY27 earnings beat estimates, lifting the Nifty PSU Bank index over 3%; Jefferies, Motilal Oswal and others raised PNB target prices. Simultaneously, ICICI Bank posted a 20.1% YoY profit rise to Rs 14,843 crore with NII up 17.7%, yet gained only 1%, while HDFC Bank's 4.6% profit growth to Rs 19,510 crore was met with a 2–5% stock decline, reflecting valuation expectations mismatch. Axis Bank also fell sharply. The sharp PSU vs. private divide signals a rotation trade is underway, with foreign investors selling private-sector names.

    Why it matters: The sector split reveals a meaningful valuation and growth-expectation reset for India's private banking leaders — investors need to recalibrate HDFC Bank's NIM recovery timeline and ICICI's premium sustainability, while assessing whether PSU bank re-rating has legs beyond the initial earnings pop.

  4. 4

    HFCL Q2 Profit Surges 448% YoY to Rs 394 Crore; Stock Hits Upper Circuit

    MEDIUM IMPACT · Markets-Economic Times · 2026-10-19 07:12 UTC

    HFCL reported Q2FY27 net profit of Rs 394 crore, up 448% YoY from Rs 71.92 crore, on revenue that surged 144% to Rs 2,542 crore. EBITDA rose 224% to Rs 658 crore with margin expanding 640 basis points to 25.9%. The stock hit the 5% upper circuit at Rs 268.70 on BSE and has gained nearly 300% year-to-date. HFCL is positioned as both an optical fibre infrastructure play and an AI-beneficiary, with the margin expansion suggesting operating leverage is kicking in at scale.

    Why it matters: HFCL's inflection in revenue mix and margins validates the optical fibre/AI-infrastructure investment thesis in India and is a cross-read on domestic AI capex demand; the magnitude of the earnings beat warrants a re-rating review for the stock and peers in the telecom-infra supply chain.

  5. 5

    Government Halts Sugar-to-Ethanol Diversion; Sugar Stocks Drop Up to 7%

    MEDIUM IMPACT · Markets-Economic Times · 2026-10-19 05:00 UTC

    India's central government directed sugar mills to cease diverting cane to ethanol, citing domestic sugar availability concerns following insufficient monsoon rainfall. Major listed sugar companies including Balrampur Chini Mills, Bajaj Hindusthan Sugar, EID Parry and Shree Renuka Sugars fell 2–7% on the news. The directive effectively reverses a key pillar of the ethanol blending programme that had supported sugar company earnings and investment theses over the past three years. It also raises uncertainty about future ethanol blending targets.

    Why it matters: This is a direct policy reversal that invalidates the ethanol-revenue stream embedded in bullish sugar-sector earnings models; investors holding sugar/ethanol plays must recalibrate blended revenue assumptions and assess whether the policy shift is seasonal or signals a longer-term programme rollback.

Asia Tech

  1. 1

    Nvidia Mandates TSMC 3nm Base Dies for Next-Gen HBM, Uniting Samsung, SK Hynix, Micron

    HIGH IMPACT · The Information / TrendForce / Electronics Weekly · 2026-10-19 04:55 UTC

    Nvidia has instructed all three major HBM suppliers — Samsung, SK Hynix, and Micron — to use TSMC's 3nm process for base dies in its next-generation NVHBM architecture, per reports from The Information and TrendForce. This marks Samsung's first collaboration with TSMC for HBM production, a structural departure from its historically captive foundry model. Nvidia is standardizing base-die fabrication to meet yield and performance requirements, effectively making TSMC the indispensable logic backbone of the entire HBM supply chain. The move validates TSMC's process technology leadership and increases its revenue exposure to the AI memory cycle, while simultaneously constraining Samsung's ability to differentiate on in-house foundry integration.

    Why it matters: This is a structural shift in the HBM supply chain: TSMC captures incremental foundry revenue regardless of which memory vendor wins HBM share, compressing Samsung's vertical-integration advantage and reinforcing the TSMC-Nvidia axis as the dominant AI infrastructure duopoly — a direct read-through to TSMC margins and Nvidia's supply chain visibility.

  2. 2

    SoftBank Considers $18bn Allied Universal Acquisition to Build AI-Robotics Security Platform

    HIGH IMPACT · marketscreener.com / TradingKey · 2026-10-19 07:22 UTC

    SoftBank is reportedly evaluating an $18 billion acquisition of Allied Universal, the largest private security firm in North America, as part of its broader push into physical AI and robotics. If completed, this would be one of SoftBank's largest deals since the ARM acquisition and would represent a meaningful deployment of capital outside its Vision Fund structure. The strategic rationale centers on integrating robotics and AI surveillance into security operations at scale. The deal would substantially increase SoftBank's balance sheet leverage and shift its capital allocation away from listed tech holdings toward operating-company exposure.

    Why it matters: An $18bn outlay would pressure SoftBank's net LTV and raise questions about whether the group is pivoting capital away from its public tech portfolio (ARM, domestic AI bets) — investors need to reassess SoftBank's implied NAV discount and the probability of asset sales to fund the deal.

  3. 3

    Samsung Memory Chief Says Global RAM Shortage Will Not Peak Until 2028

    HIGH IMPACT · Startup Fortune · 2026-10-19 06:53 UTC

    Samsung's memory division head stated publicly that the current RAM supply tightness will not reach its peak until 2028, implying a multi-year demand runway driven by AI server and edge device proliferation. This extends the consensus memory upcycle timeline materially — most sell-side models had assumed peak supply-demand tension in 2025-2026. The statement aligns with Samsung's internal capacity investment planning and suggests the company is not accelerating supply additions to chase near-term pricing. It also provides a read-through to DRAM and HBM pricing trajectories for SK Hynix and Micron.

    Why it matters: A 2028 shortage-peak call from Samsung's own memory chief pushes out the cyclical downturn assumption, supporting a longer duration bull case for HBM/DRAM ASPs and justifying elevated capex at SK Hynix and TSMC — consensus models pricing in a 2026-2027 peak trough may need to be revised.

  4. 4

    SK Hynix Solidigm IPO Faces Korean Regulator Pushback on Shareholder Protection Grounds

    MEDIUM IMPACT · The Korea Times / KED Global · 2026-10-19 06:53 UTC

    Korea's financial watchdog chief stated that SK Hynix's potential IPO of Solidigm — its NAND flash subsidiary acquired from Intel — conflicts with domestic shareholder protection rules, specifically around multiple-listing structures that could dilute parent shareholders. The KED Global and Korea Times reports indicate regulatory scrutiny could delay or restructure the IPO, which had been a key catalyst for unlocking SK Hynix's NAND asset value. Solidigm has been loss-making post-acquisition and an IPO was seen as a pathway to separate it from SK Hynix's core HBM/DRAM business. A blocked or delayed listing removes a near-term re-rating event for SK Hynix.

    Why it matters: The Solidigm IPO was a consensus bull catalyst for SK Hynix's sum-of-parts valuation; regulatory resistance materially reduces the probability and timeline of that event, potentially keeping Solidigm's NAND losses consolidated on SK Hynix's books longer than the market assumed.

  5. 5

    Amkor Commits $2.3bn to South Korea AI Advanced Packaging Plant, Production Starting 2027

    MEDIUM IMPACT · BigGo Finance · 2026-10-19 07:05 UTC

    Amkor Technology is investing approximately $2.3 billion in a new advanced packaging facility in Gwangju, South Korea, targeting production start in 2027 and focused on AI chip packaging demand. This is one of the largest single OSAT capital commitments in Korea and signals strong forward demand visibility for advanced packaging — particularly for HBM and heterogeneous integration tied to Nvidia, Apple, and hyperscaler custom silicon programs. The investment reinforces Korea's positioning as a critical node in the AI hardware supply chain beyond pure memory. Capacity coming online in 2027 aligns with the Samsung memory chief's 2028 shortage-peak timeline.

    Why it matters: Amkor's $2.3bn bet provides an independent demand-side confirmation of the extended AI capex cycle, cross-reading positively to advanced packaging peers (ASE, SPIL) and supporting the case that AI infrastructure investment remains supply-constrained through 2027-2028 rather than decelerating.

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