Hello world, its Friday, November 6th, 2026
Democrats won Congress, and the market decided data centers were next on the ballot. The Nasdaq had its worst day in 19 months, Taiwan summoned its rescue fund, and TSMC briefly hit limit-down. Meanwhile ASE wrote a $3.7 billion packaging check and an optics maker signed a billion-dollar deal on the same day. Fear and orders are moving in opposite directions.
Let’s get into it. --Austin & Vik
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Wall Street prices in a data center slowdown
The Nasdaq Composite fell 5.5% on Thursday, its worst day since April 2025’s tariff shock, and slipped into correction territory, nearly 12% below its October 6 record. The Philadelphia Semiconductor Index dropped about 12% to a six-month low. Nvidia lost 9%, AMD 17%, and SanDisk 22%. The Nasdaq 100 shed roughly $2.5 trillion in value.
The trigger was political. Democrats won both chambers of Congress and flipped governorships in Texas and other data center states, and traders concluded that permitting, power, and local opposition will slow U.S. buildouts. UBS estimated that about 30% of expected 2028 U.S. data center capacity additions could be at risk from construction pauses. Reuters also noted the AI trade was already shaky: neocloud financing costs have climbed, and CoreWeave’s five-year credit default swaps hit a record.
Analysts are pricing in a slowdown in capacity that has not been cancelled, and the reaction is running well ahead of anything Congress has actually done. Nothing has been passed. By early Friday, Nvidia, AMD, Intel, Broadcom and Micron were bouncing 4–8% in premarket trading.
Source: Reuters · The Guardian · Reuters (Friday premarket)
Vik: The election results are a scare for the datacenter buildout. Definitely not worth the massive shake up. Until something passes from Congress about actually limiting buildouts, they are only election promises for now. We know how those things go. If it does pass, then we will see a trajectory of growth that tries to squeeze the performance of what we have already. There may be some caveats in the latter scenario.
Austin: If there happens to be a slow down, it’s a boon for air-cooled CPU/GPU/AI ASIC offerings.
Asia takes the second leg, and Taiwan calls in the cavalry
Asia opened Friday into the same fear. Korea halted KOSPI trading for 20 minutes after an 8% plunge, then closed down 6.02%. SK hynix ended 10.4% lower and Samsung 6.35% lower. Tokyo’s Advantest fell 12.2% and SoftBank 11.6%. In Taipei, TSMC opened at its 10% limit-down price, then clawed back to close down 4.69% at NT$2,135. The Taiex finished down 4.51% at 39,701.64 after a low of 37,837.
By Friday afternoon, Taiwan’s National Stabilization Fund had authorized its executive secretary to deploy money, the tenth time it has done so, with up to NT$500 billion available. It said the Taiex was down 12.19% on the week and about 20.5% from its 2026 high. Foreigners sold a record NT$994 billion of Taiwan stocks in October and another NT$524 billion this month. The fund didn’t say how much, if any, it had bought.
Taiwan’s regulators are treating a chip selloff as a financial stability event, which tells you how much of that market is one sector. TSMC alone is more than 40% of Taiwan’s market capitalization. A Daishin analyst quoted by Yonhap called the reaction “excessive” and said a full halt to U.S. data center buildouts is unlikely.
Source: CNA (stabilization fund) · Focus Taiwan · Yonhap · CNBC
Vik: Yeah, remember this month as Black November for AI. Nov 5th, 2026 to be exact. Everything turned deep red, and investors rotated out of AI semis.
TrendForce’s 2027 forecast arrives in the worst possible week
At its Taipei forum on Thursday, TrendForce forecast that AI server shipments will grow 36% in 2027 to about 3.83 million units, ahead of 2026’s pace. It sees combined capex at the nine biggest cloud providers rising 60% to about $1.52 trillion. Nvidia should keep roughly 62.6% of the AI server market, and Vera Rubin racks could pass the GB series in Q2 2027. AMD’s first rack-scale design, Helios, could see order delays like those that hit Nvidia’s ramps.
The forecast carries a caveat that matters this week: TrendForce said it could be revised for macro or geopolitical shifts. It was prepared before the political shock hit the market.
The most-cited industry forecast for 2027 was finalized before the selloff, so the real test is whether hyperscaler capex plans survive the next round of permitting fights. Early reads will come from the next round of cloud capex commentary and from permitting decisions in the states that just flipped.
Source: TrendForce · Taipei Times · TrendForce (Oct. capex outlook)
Vik: Talk about timing a report badly — right in the middle of $2.5T leaving the station. LOL Trendforce.
ASE commits $3.7 billion to packaging as Nvidia reportedly funds SPIL
Taiwan’s Ministry of Economic Affairs approved ASE’s plan to invest NT$123.7 billion (about $3.7 billion) in new automated packaging and test lines in Kaohsiung and Tainan, adding 3,553 local jobs. It is the largest case under the government’s Invest Taiwan program in recent memory, and the lines are aimed at AI and high-performance computing demand. ASE shares still fell 7.9% on Friday with the rest of the market.
Separately, Reuters reported, citing an industry executive, that Nvidia is providing billions of dollars to expand CoWoS-class capacity at SPIL, an ASE unit. The funding is for new factory space and equipment. Neither Nvidia nor ASE has confirmed it. The same Reuters piece says advanced packaging revenue should pass traditional packaging for the first time in 2026, with capex near $28 billion (Yole Group).
The scramble for packaging capacity is outside TSMC now, and the biggest customer is helping pay for it. The ASE approval is on the record. The Nvidia funding rests on a single anonymous executive.
Source: Taiwan News / CNA (MOEA approval) · Invest Taiwan details via Chip Dispatch · Reuters
Vik: Look past the AI doom and gloom seriously. There is still packaging capacity being built out. Just because the stock market had a rout does not mean we stop making chips overnight.
Applied Optoelectronics books a 1.6T deal, with a bigger one “within weeks”
AOI reported record Q3 revenue of $269.9 million, more than double last year, and a return to GAAP profit. It also disclosed an October three-year agreement with an existing Tier 1 hyperscaler covering 1.6T transceivers, which the customer has qualified. The customer agreed to buy at least 10% of its 1.6T needs from AOI from June 2026 through May 2029, worth an expected $1–1.5 billion. Q4 revenue is guided to $385–420 million.
There are strings. AOI committed to agreed pricing that includes some price cuts, the customer made no capital commitment, and CFO Stefan Murry said the locked pricing could cap upside if market prices rise. Capacity is also slipping: the U.S. expansion will take longer because of power and construction delays. The CEO said a second agreement, potentially five times larger and including 800G and lasers, is in its final stages and could come within weeks. It has not been signed.
The first deal is real, signed and disclosed, while the second, bigger one is a promise from the CEO. AOI also said it is qualifying CPO/NPO lasers with four to five customers and that lasers carry margins above 60%.
Source: AOI Q3 2026 release · Earnings call transcript (Motley Fool) · MarketBeat
Vik: Applied Optoelectronics stock has been beaten down more than most. The underlying fundamentals seem okay; not sure why the hard hit.
Austin: Guide was down… significantly compared to earlier-in-the-year expectations. Ramp is slow, margins not expanding.
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NTT DATA lines up 900 MW of onsite power
NTT DATA agreed to deploy 900 MW of Bloom Energy fuel cells across multiple global data center projects, with initial shipments expected in 2027. Bloom calls it its largest international project. The companies did not disclose a price or a site-by-site breakdown.
The fuel cells will serve as primary power, generating electricity at the data centers rather than relying entirely on a grid connection. That addresses one constraint behind the slowdown fears: getting enough power to a new campus.
The deal provides a concrete example of operators finding another route to power, even as investors question the pace of data center construction.
Source: NTT DATA · Bloom Energy
Industry Chatter
These are just unconfirmed industry whispers.
Anthropic run rate and IPO — Anthropic’s annualized revenue topped $80 billion at the end of October, up from roughly $65 billion in July, according to the Wall Street Journal. IPO investors are pushing back on a $1.5 trillion valuation, with some favoring about $1 trillion or a smaller raise, and the selloff makes a delay a live option. Anthropic is one of the biggest buyers of compute in the market, so its listing timeline matters to the chip supply chain (WSJ via X).
KYEC / Rubin / HBM4 — A post from @jukan05 links a major-GPU delay at KYEC to HBM4 yield problems, with Nvidia’s Rubin named as the affected chip. That puts the memory ramp back in focus as a possible constraint on GPU shipments. Source
Sector Watch
Packaging & Substrates
JNTC — The Elec reports that Korean glass substrate maker JNTC was registered in October as a through-glass-via supplier to Nvidia, its second major U.S. chip customer after Broadcom, and is shipping paid 2mm glass-core samples. The company said it can’t discuss customers, and it plans pilot-line samples through 2027 and initial volume from mid-2028 (Source: The Elec).
Powertech — In the Reuters packaging feature, Powertech says it will invest $400 million in an advanced packaging joint venture with Broadcom in Singapore, with production possible in 2028, and is betting on panel-level packaging (Source: Reuters).
Optics
Santec — The Japanese optical test equipment maker reported first-half operating profit of ¥7.7 billion and raised full-year guidance to ¥50 billion in revenue and ¥18 billion in operating profit, citing data center optics testing demand (Source: Santec filing · Kabutan).
Memory & Materials
YMTC — Reuters, citing two people, reports that YMTC wants 60–70% domestic equipment for a planned fourth Wuhan fab making 300-plus-layer NAND for data centers. It would be up from just over half at the third fab. Construction is expected to start next year and no orders have been placed (Source: Reuters).
AI Infrastructure
Neocloud credit — Reuters notes that CoreWeave’s five-year credit default swaps hit a record 1,267.9 basis points and Intel’s hit a record 149.7. Both CoreWeave and Nebius have lost half or more of their value since October 6 (Source: Reuters).
OpenAI — Its new National Community Compact commits future campuses it owns and operates to cover their electricity and infrastructure costs, disclose water and noise impacts, and avoid NDAs with public officials, subject to narrow security and trade-secret exceptions. Source
Equipment
Lam Research — The board authorized another $25 billion in share repurchases, with no termination date; the authorization does not obligate Lam to buy the shares. Source
Power
Infineon / SOLUM — The companies signed a memorandum of understanding to develop high-voltage direct-current power systems for AI data centers, pairing Infineon semiconductors and reference designs with SOLUM’s power-supply design and manufacturing. Source
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Also worth a read:
Austin’s latest on Chipstrat, When Agents Are the Interface
Vik’s latest on Vik’s Newsletter, Intel: Why Didn’t We See This Coming?