Mitsubishi UFJ Bank: The momentum of the US dollar rebound may be exhausted in the second quarter

Key update on share price in the first point; update on the performance of European peer stocks in the eighth point. October 7th - BE Semiconductor Industries (BESI.AS) shares fell by about 9.5% after UBS downgraded the Dutch chip equipment manufacturer’s rating from “Buy” to “Sell” and slashed its target price by 57% to 159 euros. UBS stated that expectations for demand for chip packaging technology “hybrid bonding”—which is at the core of Besi’s investment thesis—“have not materialized as expected.” According to UBS, adoption of hybrid bonding technology in high-bandwidth memory will slow because AI accelerator clients currently prioritize capacity expansion over performance improvements. UBS expects that by 2028, hybrid bonding technology will account for 10% of equipment demand, whereas market consensus suggests this proportion is around 50%. The bank projects that Besi’s hybrid bonding (HB) revenue in 2027-28 will be 50-60% lower than market expectations, and that demand from co-packaged optics, AI accelerators, and PC processors is unlikely to fill that gap. UBS stated that existing capacity at TSMC (2330.TW) and Intel (INTC.O) is already sufficient to support “substantial shipment volumes” and unless adoption rates exceed expectations, the upside is limited. Besi’s share price extended Tuesday’s downturn, after Bank of America Global Research also downgraded the stock based on similar concerns, with shares closing down 5.4% on Tuesday (link). In other European semiconductor stocks: ASML (ASML.AS) declined 2.3%, ASM International (ASMI.AS) dropped 5.3%, Infineon (IFXGn.DE) fell 5.8%, X-Fab (XFAB.PA) lost 5.8%, Soitec (SOIT.PA) was down 4.1%, STMicroelectronics (STMPA.PA) dropped 3.8%, Aixtron (AIXGn.DE) fell 2.7%, and ams-OSRAM (AMS2.VI) fell 3.6%. (Note: For the convenience of non-English speakers, Reuters automatically translates its reports into several other languages. Because automated translations may be incorrect or may not include the intended context, Reuters does not guarantee the accuracy of translated texts and provides them solely for reader convenience. Reuters assumes no responsibility for any damage or loss caused by using automated translation features.)

Temasek's CIO stated that AI-driven trading reversals represent the greatest market risk, with possible turbulence in 2027; however, he remains optimistic in the long term and plans to raise public AI exposure to 70%—75%.

Intel CEO Pat Gelsinger stated that the company will continue to participate in Elon Musk's Terafab project. Previously, Musk revealed ongoing discussions with TSMC about potential collaboration, which raised market concerns over Intel's position in the project. As a result, Intel's stock price once dropped by 3.9%.