Morgan Stanley: Asia Semiconductors — Hong Kong Investor Feedback
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After a three-day Hong Kong roadshow on Greater China semiconductors, Morgan Stanley finds investor interest rotating from price-hike plays toward volume-driven names as pricing momentum moderates. ROIC on AI capex is the single most important metric for tracking future hardware demand, and C2Q26 commentary from Meta, Google, Amazon and Microsoft confirmed AI investments are paying off, with AWS AI revenue running at an annualized rate above $25 billion and growing at a triple-digit pace. The firm's cloud capex tracker points to nearly $1.3 trillion in 2027 (top 14 listed CSPs, ex-sovereign AI); consensus CY27 capex is up over 70% year-to-date (about $500 billion), lifting expected 2027 growth from +14% to +29% year-over-year. 2027 CoWoS capacity implies roughly 19 million chips; at an average 2kW TDP per GPU/ASIC, that requires about 38GW of new power, keeping electricity the global bottleneck. SpaceX plans to expand data centers from 2GW to nearly 10GW, and the extra 8GW equals roughly 4 million Rubin GPUs, about 20% of TSMC's 2027 AI accelerator output. Top Overweights are TSMC, ASE, ASM Pacific, MediaTek (Top Pick), Aspeed, Hygon and Montage; the firm prefers DDR4 DRAM (Winbond, Nanya) over NAND module makers and advises avoiding GWC (EW) and Silergy (UW).