AXT's Liquidity Supports InP Expansion Amid AI Demand

Samsung Electronics reported the most profitable quarter ever by any company at $80.2 billion, while Taiwan Semiconductor Manufacturing Company posted record third-quarter revenue of $46.7 billion, up 50% year over year. Samsung, the world's largest memory manufacturer, counts Qualcomm, Alphabet, Tesla, Advanced Micro Devices and Amazon among its main customers. TSMC, the world's largest manufacturer of AI chips, produces over 60% of all global contract chips and over 90% of advanced chips, with NVIDIA, AMD, Qualcomm, Intel, Apple and Broadcom among its customers. Earlier this week, SpaceX announced it will raise $40 billion in debt to buy NVIDIA chips as it scales its AI compute, with a payback period well under one year thanks to deals with Google and Anthropic. The results and the SpaceX debt raise suggest record capital expenditure on AI infrastructure will continue.

Bank of America initiated coverage of Penguin Solutions with a Buy rating and a $100 price target, sending shares up 3.8% in premarket trading on Friday. Analyst Wamsi Mohan wrote that Penguin sells memory and full-stack AI infrastructure to business, government and neocloud customers, and called the company a key beneficiary in the age of agentic AI. AI-driven businesses already comprise 78% of sales and grew 141% year over year last quarter, Mohan noted. He sees upside to his above-Street estimates, projecting fiscal 2028 revenue of $2.87bn and EPS of $5.43 versus the Street's $2.66bn and $5.04, driven by a sustained memory cycle through 2028, growing traction from agentic AI demand, improving margins and Penguin's ability to lower the time to first token in inference applications. Mohan added that Penguin's CXL products and MemoryAI KV cache servers address rising memory constraints directly, and that a Tier-1 financial institution has already expanded its usage.

Samsung Electronics released preliminary third-quarter 2026 earnings guidance on October 8, projecting consolidated operating profit of approximately 107.4 trillion Korean won, up about 782.5% year on year, with consolidated sales of roughly 195 trillion Korean won, up about 126.6%. Earlier, Micron Technology reported fourth-quarter fiscal 2026 revenue of 54.23 billion US dollars, up about 379% year on year, and guided next-quarter revenue to approximately 61.5 billion dollars. Guolian Minsheng Securities stressed that the memory industry is entering a supercycle, with AI server demand continuing to drive upgrades in HBM, DRAM, and enterprise SSD configurations, while supply-side constraints on advanced process capacity and long-term agreement lock-in mechanisms make the upward price trend clear. Leading manufacturers such as Micron have already locked in more than 35% of revenue through 2030 via long-term agreements and plan to boost shareholder returns. As a result, as of 14:11 on October 9, 2026, the STAR 50 ETF Ping An, ticker 589150, saw its underlying index, the SSE STAR 50 Index, ticker 000688, rise 0.23%, with constituents Amlogic up 5.84%, Transsion Holdings up 5.42%, Times Electric up 4.35%, Skyverse up 4.23%, and SJ Semiconductor up 4.05%.