APAC Tech Strategy Sector Keys September 2026 v3: No signs of AI demand abating

UBS APAC Tech Strategy: Sector Keys, September 2026 v3 — No signs of AI demand abating. The report addresses three key debates. Q1: Is the AI cycle sustainable? UBS view: Yes, with visibility improving into 2028. Key upstream enablers TSMC, Samsung and SK Hynix continue to see medium-term demand; agentic AI is taking off and is increasingly viewed as the major inflection point in AI adoption; 2027 demand upside continues for CPUs (AMD Venice, Nvidia Vera) as well as AI accelerators (notably ASICs); overall monetization is improving, with OCF forecasts for hyperscalers/neoclouds raised by 30% in 2027; the funding gap between OCF and capex remains the No.1 risk factor but should be manageable. Q2: Will the memory upcycle continue for longer? UBS view: Yes, with the DRAM upcycle now extending towards 2Q28 and NAND towards 4Q27. The main risk is overall affordability as memory industry revenues exceed US$1.6tn in 2027E, over 50% of which is to be consumed by hyperscalers/neoclouds;