APAC Tech Strategy — Sector Keys: October v3: More Mixed Tech Sentiment, Amidst AI Strength

UBS's October 2026 APAC Tech Strategy argues the AI cycle is sustainable with visibility into at least 2028: key upstream enablers TSMC, Samsung and SK Hynix continue to see well-supported medium-term demand, agentic AI is taking off as the major inflection point in AI adoption, and 2027E demand upside continues for server CPUs and AI accelerators, notably ASICs, with hyperscaler/neocloud operating cash flow forecasts raised about 30% for 2027E. The funding gap between OCF and capex remains the No.1 risk factor, with AI credit spreads the key metric to watch. In memory, the DRAM upcycle is now seen extending into 2Q28 and NAND into 4Q27, as server DDR and SSD demand keep strengthening; memory industry revenue is expected to exceed US$1.6tn in 2027E, more than 50% of it consumed by hyperscalers/neoclouds. The sector pecking order is Memory > Semiscap > MLCC > Select Taiwan Semis, with regional top picks Delta, MediaTek, Naura, Samsung and Tokyo Electron.