BofA: Asia-Pacific Semiconductors — AI ASIC Update: TPU and Trainium Production Upside Lifting Supply Chain
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BofA Global Research upgraded its 2026 Google TPU shipment forecast to 4.6 million units from 4 million, driven by robust demand for training and inference chips designed by Broadcom and MediaTek, alongside delays in Meta's MTIA ASIC project. The firm also raised its 2026 and 2027 Amazon Trainium demand estimates to 2.1 million and 3.0 million units, respectively, reflecting AWS capital expenditure increasing to 74% of total capacity. Despite aggressive capacity expansions by TSMC, ASE, and Amkor, industry-wide CoWoS demand continues to outpace supply. Demand is projected to grow at a 64% CAGR through 2027, slightly exceeding the 61% supply CAGR, sustaining capacity utilization at approximately 90%.
This production ramp directly benefits the regional semiconductor supply chain. Amazon's custom ASICs still represent only about 10% of its AWS infrastructure, indicating substantial long-term growth potential as Trainium3 ramps in mid-2026. The firm identifies Alchip and KYEC as primary beneficiaries. Alchip's 2026 and 2027 EPS estimates were adjusted, driving a target price increase to NT$4,700 based on 25 times 2027 P/E. KYEC's target price was raised to NT$350 based on 20 times 2027 P/E, reflecting improving gross margin prospects. Both stocks retain Buy ratings. TSMC, ASE, and Chroma are also positioned as manufacturing chain beneficiaries.