Summary: We conducted our regular survey of Asian tech markets from late February through early March. As noted in our Asia Feedback (Hardware) report, published today, Chinese smartphone makers are starting to sharply lower their production plans. Outlooks for PC demand and Chinese data center investment have likewise been scaled back, indicating that—apart from still-robust automotive and industrial applications—semiconductor demand is now biased downward. Chipmakers nonetheless continue operating at full capacity apart from adjustments around CIS and CIS/logic stacks for certain smartphones, but foundries are starting to tone down their bullishness amid emerging indications that end-users are no longer stockpiling inventory. In memory, we anticipate a renewed focus on how Chinese memory makers are affecting memory prices, including capex execution and YMTC’s possible designation as an iPhone vendor. On the capex front, we see no major developments in front-end SPE but note indications that back-end demand is peaking out, with a major Chinese OSAT requesting a six-month delay in equipment delivery and some orders being postponed. On the technology front, the introduction of technology for stacking NAND memory cells atop peripheral logic will likely boost wafer demand and could be a key topic of discussion. New takeaways from our survey: See the bullets on pages 6–8 and the underlined bullets in subsequent sections. Key takeaways: (1) Foundries have trimmed their outlook for inventory demand due to an emerging peak-out. (2) Production of smartphone CIS and CIS-bonded logic is being scaled back as Chinese smartphone makers reduce output. However, we see no signs of a correction in AP demand. (3) Delays for Intel/AMD's new CPUs could delay the ramp in server DDR5 demand to 2023. (4) Chinese DRAM investment plans include new fabs in Beijing and Chengdu. (5) YMTC’s 128-layer chips could be adopted in the 2022 iPhone 14 (vendor certification currently in process). (6) In 3D NAND, memory on logic stacking is set for mass production from 2024. This would increase demand for wafers for use with peripheral logic. (7) A major Chinese OSAT is requesting a six-month delay in equipment delivery. (8) Customers are hesitating to adopt 3nm chips due to excessive foundry pricing. (9) Plant shutdowns due to quality issues at Kioxia look set to drive only modest price hikes in 2Q. Investment implications: Renesas Electronics (6723) is our top pick in the semiconductor sector in view of solid automotive and industrial demand along with the company’s high margins and low valuations. We also like Anritsu (6754), which is extending its reach with 5G IoT and looks likely to issue strong FY3/23 guidance. We rate both companies Outperform. We meanwhile remain cautious on the SPE sector, as positive news flow around the WFE market looks played out and we see risk of semiconductor inventory adjustments. We are particularly cautious on Screen (7735) and Advantest (6857) in view of inventory risk and valuations.