Semis Memo: Supply Chain Inheritance

IntroductionFor the first innings of the AI Infrastructure trade, it was simple enough just to know the basics. Large Language Models run on GPUs, buy Nvidia. AI compute will lift optics out of the telecom doghouse and cause significant growth for interconnects, buy the optical interconnect names. Every iota of AI compute demand in the agentic era must inevitably flow through the memory OEMs, buy Micron and SK Hynix.It seemed a lot more difficult than that at the time, but it was pretty much that simple. The reasons for that were twofold. First, not everyone bought into the massive growth in data centers that would be required for AI to proliferate and actualize. Second, between the post-COVID supply chain glut and numerous other headwinds to semiconductor and adjacent names, valuations remained quite forgiving in all but the most obvious first-order beneficiaries.That’s begun to change, and with it, outperforming in the AI infrastructure complex requires in-depth understanding beyond just identifying current bottlenecks. Understanding the roadmap for the future requires a bit more technical competence, which is why in January 2026 we began our Semis Memo series – guided by our semis analysts Zephyr and Jukan.While the landscape has evolved, our framework stays the same. Begin with the macro.

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