Nuclear fusion: From science to investable theme

Research evidence excerpt

Nuclear fusion: From science to investable theme

top- Ethan Oh

down basis, we forecast demand to post a 70% CAGR, while supply is likely to be HOLT Sector Specialist

ethan.oh@ubs.comconstrained by high technical barriers. We expect shortages to be most pronounced in

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superconductors (35% of capex), with a 55% shortfall, and to appear earliest in

supercapacitors (15% of capex) in 2028. We also foresee a potential geopolitically Stella Wu

driven bottleneck in tritium fuel. We expect this scarcity to drive a structural upward re- HOLT Sector Specialist

stella.wu@ubs.comrating of component producers as fusion developers bid up prices for limited hardware.

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Global market implications Shneur Z. Gershuni, CFA

Analyst

We believe China could be the primary supply-side beneficiary, as it has spare

shneur.gershuni@ubs.com

manufacturing capacity and upstream rare earth access that other countries cannot +1-212-713 3974

replicate in the near term. UBS Evidence Lab data suggests a West-to-East pivot in supply

Jarvis Lamcould already be underway. The US has the clearest commercial demand, with the

world's largest AIDC-driven power demand pull creating strong near-term procurement

jarvis.lam@ubs.com

momentum. In Europe, an established scientific foundation and mature industrial base +852-2971 7701

could support structural exposure to the fusion build-out. We see no near-term

Yoon Chodisplacement threat to gas or renewables, as commercialisation is unlikely to happen in

at least 1-2 years, though we believe the longer-term risks warrant monitoring. To assess yoon.cho@ubs.com

these implications on a global scale, we drew on multiple UBS proprietary tools, +82-2-3702 8805

including UBS Evidence Lab, UBS ARC, UBS Quant, UBS ESG, and UBS HOLT.

Amily Guo