European Technology Hardware & Asia Semiconductors: Stress testing a 25% GW cut in 2028

Our coverage and semis more broadly were under further pressure last week on increasing fears on slowing or cancellations to potential DC projects. We think fears are overblown but a reset of estimates would be healthy. We stress test a 25% reduction to 2028 GW deployments for our coverage. Political developments raise concerns on GW deployments. For projects already under construction or with the necessary approvals in place, we see limited risk of disruption to 2027 or 2028 deployments. We think last week's developments do, however, increase uncertainty in the near term around incremental projects from late 2028/2029 onwards, where visibility was already limited and investor debate elevated. We continue to see evidence that advances in AI are accelerating AI R&D itself, reinforcing our view that compute availability remains a structural bottleneck. Stress test - 25% cut to GW deployments. Under this scenario, the implied valuations for TSMC, ASML and ASM International already look at