- Mizuho Analyst Vijay Rakesh saw the potential for a Yangtze Memory Technologies Co Prohibit and extend limitations of AI or GPUs to processing power/memory shortly.
- Based on reviews by his Washington team, the analyst believes expanded restrictions could be coming soon.
- He assumed that a ban on YMTC could be memory and benefit in the short term Micron Technology, Inc mu (Neutral; Price target $52) or Western Digital Corp WDC (Neutral; Price target $40), but he believes YMTC already has the equipment to ramp up wafers by 2023E.
- While he believes MU is well-positioned with new roadmap ramps, short-term headwinds remain into 2023E as demand for PCs and mobile phones slacks and the pricing environment for DRAM and NAND worsens as the industry remains is slightly oversupplied.
- WDC has performed well overall, but he sees NAND trending even weaker in 2H22 and 2023E as demand for PCs and mobile phones pauses with inventory correction.
- He also sees emerging entrants in the NAND landscape like YMTC creating capacity in 2023E and beyond, with NAND glut likely to persist, impacting prices and margins.
- There could be advanced limitations of AI or GPUs to include compute power, CPU and data center, which is an increased negative result Advanced Micro Devices, Inc AMD (Obtain; Price target $125) or NVIDIA Corp NVDA (Obtain; Price target $205).
- Restrictions on sales of >128L NAND and <18nm DRAM memory devices and potential listing of YMTC could be detrimental to WFE, with 2023E WFE at only <80 billion US dollars Dollar.
- He believes AMD is well positioned and has a significant opportunity to meet targets for server shares and upcoming gaming console launches.
- Although NVDA’s valuations have been high, he believes the improvement in PCs, AI deep learning and inferencing markets, gaming trends, automotive and data centers see it as upside versus estimates.
- NVDA is also well positioned for growing machine learning, deep…
