Memory suppliers’ revenue rose 298% in the September quarter while their data center customers grew 19%. On November 3, voters favored limits on data centers in 40 of 41 local ballot measures.
Global Economy
The United States midterm vote put the first check on the data center buildout. Voters favored limiting data center development in 40 of the 41 local ballot measures decided on November 3: 27 measures that limited or opposed development passed, and 13 that favored it failed (Ballotpedia, 6 November). UBS estimates that about 30% of the capacity additions expected in 2028 are at risk from political uncertainty after the election (UBS estimate, as reported 4 November). The measures bear on projects not yet started, so the question they raise is 2028, not 2027.
Electronic Equipment Growth
The buyers are growing at a fraction of their suppliers’ rate. The 13 data center investors in the Custer composite, including Meta, Alibaba Cloud, Tencent Cloud, Oracle and Equinix, had revenue of US$185.5 billion in 2Q’26, up 18.9% on a year (3/12), from 8.5% in 1Q’25 (Chart 2). That is the demand side, measured in the buyers’ own revenue. The suppliers below sell into these companies’ capital budgets, which is a different and faster-moving number.
Semiconductors
Memory is where the money lands. The 22 memory and storage companies had revenue of US$171.7 billion in 3Q’26, up 298.3% on a year (3/12), from 16.4% in 1Q’25 (header chart). SK hynix was US$73.9 billion of it and Micron US$54.2 billion.
Processors follow. AMD’s Data Center segment revenue was a record US$8.5 billion in the third quarter, up 97% on a year, and Intel’s Data Center and AI segment US$7.3 billion, up 78% (Chart 1). AMD’s data center business was 64% of its US$13.4 billion of revenue. For the fourth quarter AMD guides total revenue to about US$17 billion, plus or minus 3%, and Intel to US$15.0 billion to US$16.0 billion (AMD, 3 November; Intel, 29 October). The six AI chip companies in the Custer composite, led by Broadcom and AMD, grew 71.5% in 2Q’26.
Segment revenue as each company reports it; the two segments differ in scope.
Source: AMD, third quarter 2026 results, 3 November 2026; Intel, third-quarter 2026 results, 29 October 2026. Chart: Custer Contexo Group.
EMS and ODM Activity
The server builders report the same demand from the assembly side. Wistron’s October revenue rose 117.56% on a year to NT$402.61 billion and Wiwynn’s 80.94% to NT$165.13 billion, both citing customer demand for AI servers (company filings, Taiwan Market Observation Post System). Hon Hai, which also builds consumer electronics, rose 45.73% to NT$1.31 trillion.
Printed Circuit Boards
Board makers see it in the mix. Zhen Ding’s server, optical module and chip substrate revenue more than tripled on a year in September, and its October revenue reached a record NT$27.197 billion, up 39.99% (Zhen Ding monthly revenue reports). The 37 board makers in the Custer composite grew 21.8% in 2Q’26, the same tier that grew 7.0% in 1Q’25.
Memory and storage (22 companies), AI chips (6), the semiconductor tier (139) and the data center investors (13).
Source: Custer Contexo Group company database, from company filings; Business Outlook Electronics charts, 6 November 2026. Chart: Custer Contexo Group.
Global Electronic Supply Chain Growth
Each step away from the data center customer, growth is higher: 19% at the buyers, 71% at AI chips and 298% at memory. That is price and allocation, not unit demand, and it rests on capital spending that voters have now begun to question. The test is the 2028 pipeline: if announced starts fall by anything like the 30% UBS puts at risk while memory contract prices stop rising, the orders placed this year for 2027 delivery become inventory in the second half of 2027. The next readings are the memory makers’ December-quarter guidance and the first 2028 project cancellations. Contact Jon Custer for an update.
Sources
- Ballotpedia, “Voters favored limiting data center development in 40 of 41 local ballot measures,” 6 November 2026.
- UBS, estimate of 2028 United States data center capacity additions at risk, as reported by Finimize, 4 and 5 November 2026.
- Custer Contexo Group company database, company-reported quarterly revenue in US dollars, matched samples; Business Outlook Electronics charts, 6 November 2026 (memory and storage composite to 3Q’26; data center investors, AI chips, semiconductor tier and board makers to 2Q’26).
- AMD, third quarter 2026 financial results, 3 November 2026. Intel, third-quarter 2026 financial results, 29 October 2026.
- Company monthly revenue filings for October 2026: Wistron, Wiwynn, Hon Hai, Zhen Ding (Taiwan Market Observation Post System); Zhen Ding September 2026 revenue report, 8 October 2026.