Semiconductor Industry 02 (Aug 22 - Dec 26)

[winston]

Memory Chips

Both SK Hynix and Samsung Electronics ⁠are participating in a plan by the South Korean government to double the country's memory chip production capacity ​within five years.

That includes investment of 400 trillion won ($266 billion) ‌each for chip production facilities in the southwest of the country.

Concerns have mounted following reports that Apple is seeking to diversify parts of its semiconductor supply chain ⁠to include Chinese suppliers and that Meta is looking to commercialize excess AI computing capacity.

Jensen Huang said last month that shortages of AI memory would continue for several years due to strong demand, adding that SK Hynix would remain the company's largest memory supplier.

UBS expects the global DRAM industry to remain undersupplied until at least the second quarter of 2028.

Bank of America remains constructive on the AI investment cycle, estimating that global ⁠hyperscaler capital expenditure will reach about $851 billion this year and $1.15 trillion next year, supported by strong cloud backlogs, improving returns on AI investment and growing demand for compute-intensive AI applications.

The roughly $244 billion raised by leading hyperscalers this year largely reflects balance-sheet optimization rather than signs of funding stress.

Source: Reuters

[winston]

Semiconductor Quarterly Update - Growth momentum remains intact

Semiconductor ETF rose by 39.9% over the past three months, outperforming the S&P500 (11.4%).

Memory companies (+95%) led the sector due to 1Q26 earnings growth of over 900% YoY, driven by a surge in DRAM and NAND prices from the shortage in memory chips.

Hyperscalers and high-end chipmakers are signing longer-term multi-year supply contracts lasting till 2030e with memory players, committing about 20% in cash deposits to secure supply.

Previous long-term agreements (LTAs) before the wave of AI data centre buildouts only lasts about a year, with loose financing terms.

Equipment players mentioned that longer-term memory contracts translated to longer supply chain visibility (till about end 2027e).

We are OVERWEIGHT on the semiconductor sector. The majority of processor and equipment companies (excl. Qualcomm, ASML) guided revenue growth to accelerate in 2Q26e.

This is supported by higher capex guidance by hyperscalers, guiding combined 2026e capex to surge 89% YoY to US$710bn (prev. guidance: +72% YoY).

Strong services demand across ASML, AMAT and Lam Research, is expected to continue, as its memory customers seek performance upgrades on existing tools due to limited cleanroom space.

Source: Phillips

https://www.poems.com.sg/stock-research ... ns-intact/

[behappyalways]

UBS: TSMC's 'Surprise CapEx Hike' Reinforces Confidence In AI Supply Chain
https://www.zerohedge.com/markets/ubs-t ... pply-chain

[behappyalways]

South Korea’s semiconductor exports climbed by 181% YoY for the first 20 days of July. Taiwan’s June export orders from the US rose nearly 84% year-on-year, the fastest pace on record.
https://x.com/zerohedge/status/2079526340777099377

[winston]

vested SMH

This Sector is in a Downtrend

by Sean Michael Cummings

The Philadelphia Semiconductor Index (SOX), which tracks the American chip sector, is about 19% off its June 22 peak – on the brink of a bear market.

I recommend keeping a watchful eye on your exposure to U.S. chips in the coming weeks. This sector is in a downtrend.

And if corporate America starts choosing budget Chinese options over the West’s best-in-class AI offerings, this crash could deepen further.

Watch SOX closely from here. A decisive break below its recent lows would tell us the market is finally taking China’s AI threat seriously.

Source: Daily Wealth

https://dailytradealert.com/2026/07/21/ ... downtrend/

[winston]

Jefferies Opines Memory Chip Prices May Be Closer to Peaking, Expects 3Q Price Growth to Slow to 15-20%

Memory chip prices may be closer to peaking, Jefferies opined in a research report.

Although the market forecast memory chip prices to ascend 25-30% QoQ in 3Q26, its latest industry checks indicated that the increment may only range between 15% and 20%.

The report noted that most of the price increases were motivated by cloud service providers, while consumer electronics manufacturers have shown signs of fatigue toward further price hikes.

Therefore, visibility for further QoQ price increases next year is relatively low, and memory chip prices may peak earlier than market expectations.

Related News: Citi: Memory Prices Expected to Keep Rising in 2H; MONTAGE TECH/ ASMPT/ SG MICRO Favored

Source: AASTOCKS Financial News

https://www.aastocks.com/en/stocks/news ... -news/AAFN

[winston]

Thematic Memory ETFs Give Investors a New Way to Play AI’s Hidden Bottleneck
By Dan Schmidt. First Published: 7/23/2026.

Memory stock prices have fallen this month amid stretched valuations, price hike pushback, and a looming $8.6 billion IPO from China's ChangXin Memory Technologies.

Analysts expect memory shortages to persist until 2027 or 2028, with hyperscalers locked into multiyear contracts that support prices despite recent headwinds.

Investors can access the memory trade through three ETFs, DRAM, KMEM, and DISK, which differ
in concentration, risk, and exposure to HBM versus NAND makers.

Source: Market Beat

[behappyalways]

After Blockbuster IPO, China's Memory Giant CXMT Plans Second Chip Plant In Beijing
https://www.zerohedge.com/technology/af ... nt-beijing

[behappyalways]

Memory is going to be 42% of iPhone 18 Pro BoM cost. Crazy times.
https://x.com/Omercheema/status/2086792934624473344

[winston]

vested SMH

Philadelphia Semiconductor Index likely to retreat after recent rally

The recent rebound in the Philadelphia SOX came after reassurance from hyperscalers on AI capital expenditures and deleveraging of crowded positions in the semiconductor sector.

by Zane Aw Yu Xuan

Following a strong rally in the second quarter of this year, the index corrected 28 per cent Subsequently, the index rebounded over 14 per cent in two weeks.

The recent rebound in the SOX could be attributed to several factors.

Major hyperscalers reaffirmed and raised their guidance for AI capital expenditure in their recent second-quarter results.

From a technical perspective, the SOX is likely to pull back after the recent rebound brought it towards a key resistance area.

Source: Business Times

https://www.businesstimes.com.sg/compan ... cent-rally