DBS Bank Ltd, DBS Bank (Hong Kong) Limited
Date of Report: 9 Jan 2026
Excerpt from DBS report.
Report Summary
- The technology sector is set for an extended upcycle through 2026-27, driven by strong semiconductor growth, with global revenues projected to rise 32.6% in 2026 and 12.6% in 2027. Memory (DRAM/NAND) is entering a supercycle, supported by AI demand and disciplined supply, with industry leaders like Samsung and SK Hynix benefiting from robust pricing and profitability.
- AI continues to hold centre stage, but market leadership is broadening beyond early winners like Nvidia to include challengers such as AMD and Broadcom. Execution risk (not bubble risk) is the key concern for AI players. Any setbacks at global AI leaders could shift momentum toward Chinese tech beneficiaries.
- Semiconductor equipment makers are seeing a shift in investor focus from front-end to back-end and advanced packaging, with companies like TSMC, UMS, and Frencken well positioned for growth. Advanced packaging and chiplet architectures are emerging as new bottlenecks and strategic growth areas.
- Consumer electronics are driven by premiumisation and foldables, with Apple’s anticipated foldable iPhone launch in 2026 expected to be a key catalyst. China-based suppliers like BYDE and Lens Tech are projected to gain from higher content per device, while Sunny Optical stands to benefit from margin recovery and “mega-spec” camera upgrades.
- AI infrastructure buildout in China is accelerating, with a focus on power semiconductors (GaN, PMICs) and liquid cooling to address rising power and thermal constraints. Companies such as Innoscience and BaTelab are set to benefit from increasing domestic demand.
- Asia technology is narrowing the performance gap with US peers, with substantial valuation catch-up potential. Singapore tech names UMS and Frencken are highlighted as preferred picks for exposure to the semiconductor upcycle and downstream recovery.
- Overall, DBS remains constructive on the technology sector, noting a longer, more stable upcycle, broadening AI demand, and selective opportunities in consumer, equipment, and power semiconductor segments.
above is an excerpt from a report by DBS. Clients of DBS can be the first to access the full report from the DBS website : https://www.dbs.com
