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The Philadelphia Semiconductor Index tumbled 6 % to 11,864 points on August 18, marking its steepest single‑day drop since July 29. The memory segment led the decline (SK Hynix ‑8.11 %, SanDisk ‑9.29 %), reflecting profit‑taking following a string of gains. Industrial data from FMS indicates the memory price‑hike cycle may extend into 2028.
Mid‑year earnings for memory players are rolling in: GigaDevice posted H1 net profit of RMB 6.857 billion, surging 1091.5 % year‑on‑year; Puyan Technology recorded H1 net profit of RMB 827 million, up 1929.65 % year‑on‑year. According to TrendForce statistics, combined revenue of the world’s top‑five NAND brands reached USD 68.87 billion in Q2, rising 77 % quarter‑on‑quarter.
Taiwan‑based power‑semiconductor manufacturers are preparing for a third‑round price increase (non‑contract products to rise 10‑15 % as early as October). Lead‑times for overseas major suppliers have stretched beyond 40 weeks, while 8‑inch capacity shrank by 2.4 % year‑on‑year, fully opening the window for domestic substitution.
TSMC’s CoWoS order book is overflowing. Some back‑end advanced‑packaging orders have spilled over to Intel’s Malaysia plant. Leading carrier‑board maker Unimicron has secured customer commitments for mass production of EMIB‑T in 2027, reshaping the competitive landscape for advanced packaging.
Hon Hai injected USD 358.4 million into its Vietnamese subsidiary to expand CPO capacity. Foxconn Industrial Internet states that 2026 will be the first‑year of mass production for CPO switches, with shipments reaching the ten‑thousand‑unit tier. Optical‑communication capacity expansion has entered the phase of tangible capital expenditure.
In-depth Analysis
Optical Communications / Optical Chips: Hon Hai announced on August 18 a USD 358.4 million capital increase for its Vietnamese subsidiary (approximately NT 11.475 billion). The market speculates the funds will expand capacity for NVIDIA’s CPO all‑optical switches, alongside a parallel capital injection into its Mexican subsidiary for AI‑server production. Liu Yang‑wei stated CPO‑switch shipments will hit 10,000 units this year and multiply several‑fold next year. Foxconn Industrial Internet’s revenue from 800G‑and‑above switches surged 13‑fold year‑on‑year. Following mass production of NVIDIA’s Spectrum‑X silicon‑photonic switches, capacity expansion by Taiwan‑based foundries is materializing, moving CPO from planning into tangible capacity‑build‑out.
Advanced Packaging: TSMC’s CoWoS capacity cannot meet robust demand. Industry sources report back‑end order spill‑over to Intel’s Malaysia plant, with SemiAnalysis estimating roughly USD 1.3 billion worth of HBM shipments bound for Malaysia. C.C. Wei remarked that he welcomes more players providing back‑end capacity. Unimicron secured customer commitments to co‑develop EMIB‑T with two Japanese vendors, targeting mass production in 2027. Intel’s Chen Li‑wu noted tight carrier‑board supply and revealed some customers have prepaid for carrier‑board materials, benefiting supply‑chain participants including ASE Group, Unimicron and Kaden. Domestically, CCID Research Institute hosted a seminar on new‑generation substrates for high‑performance AI computing. Novel substrates such as glass substrates are entering an industrial‑window phase, bottlenecked by insufficient coordination across “materials‑equipment‑process‑end‑products”.
SiC / Power Semiconductors: Soaring AI power consumption has created severe shortages for power semiconductors. Taiwanese manufacturers are preparing a third‑round price hike (10‑15 % for non‑contract products starting October). Rising volume and prices are expected for brands including Taiwan Semiconductor, PanJit and Diodes Incorporated in H2. According to Jiwei Net research, lead‑times for overseas majors have generally extended beyond 40 weeks (certain automotive‑grade IGBT/SiC part numbers reach 52 weeks). TrendForce calculates global 8‑inch wafer capacity will contract 2.4 % year‑on‑year in 2026. NVIDIA is promoting the 800V HVDC architecture for data‑centers; CICC calls 2026 the launch year for high‑voltage architectures, forming the pattern “SiC for one direction, GaN for the other”. Mind‑Mind Electronics indicated upstream silicon‑wafer vendors intend further price hikes in Q4, forecasting a prosperity cycle for power semiconductors over the next three years.
Memory & Computing Chips: GigaDevice recorded H1 revenue of RMB 115.66 billion (+178.67 % YoY) and net profit up 1091.5 % YoY. Puyan Technology posted H1 revenue of RMB 39.59 billion (+336.67 % YoY), with net profit rising 1929.65 % YoY. TrendForce reported combined Q2 revenue for the world’s top‑five NAND brands rose 77 % QoQ to USD 68.87 billion; Micron’s revenue jumped 99.2 % QoQ to take third place. FMS 2026 data shows DRAM prices have climbed as much as 170 %, while enterprise‑grade SSD contract prices gained up to 90 %. New capacity is not scheduled to come online until late‑2027‑2028, and major customers have pre‑locked 2027‑2028 supply contracts. The sharp August 18 pull‑back for US‑listed memory stocks represents a correction after prior rallies; supply‑demand fundamentals remain unchanged.
Equipment & Materials: In‑depth reporting from Jiwei Net reveals delivery lead‑times for the five major equipment suppliers (ASML, Applied Materials, Lam Research, KLA, Tokyo Electron) have stretched 1.5‑2 times, with high‑end packaging‑and‑test equipment lead‑times exceeding 18 months. The Korea Semiconductor Association anticipates prolonged equipment shortages starting in 2027 and lasting through 2028. CXMT’s full‑year capacity expansion of 50,000‑60,000 wafer starts corresponds to equipment procurement of RMB 35‑43 billion. Domestic equipment localization rate stands at merely ~23 %, widening substitution opportunities. Keysight beat expectations with Q3 revenue of USD 1.85 billion on strong demand for test‑and‑measurement equipment.
Wafer Foundry: SMIC maintains high‑level annual equipment capital expenditure above USD 8 billion for 2026. Both Hua Hong and SMIC hold robust order backlogs (covered in prior briefings; no major new updates today).
Policy / Macro Backdrop: A Bank of America survey shows “long global semiconductors” remains the most crowded trade (53 % of respondents, down notably from the July peak of 82 %), with an AI‑asset bubble viewed as the top tail risk. Public‑fund equity positions climbed to 94.42 %; the electronics sector saw the largest active net inflow for the week, with allocations focused on memory, optical communications, semiconductor equipment, power devices and liquid‑cooling solutions. More than 2,500 A‑share listed firms have disclosed M&A‑restructuring progress year‑to‑date, concentrated in strategic emerging industries such as semiconductors.
Daily Investment Tips
1. Power semiconductors are experiencing a triple resonance of “price hikes + supply shortages + architecture upgrades”. The launch year for 800V HVDC bodes well for SiC/GaN and leading IDM players (Silan Micro, Sanan Optoelectronics, Yangjie Technology, etc.). Price increases are set to persist; focus on the dual tracks of automotive‑grade applications and AI power supplies.
2. The sharp US‑market sell‑off on August 18 signals volatility risks at elevated valuations. Memory stocks corrected by more than 7 % in a single session following a prolonged rally, while still ranking as the most crowded trade, pointing to heightened near‑term volatility. Nevertheless, equipment delivery lead‑times have stretched to 18 months and the domestic‑equipment localization rate stands at only 23 %, reinforcing the thesis for domestic substitution in semiconductor equipment. Pull‑backs may offer medium‑term entry opportunities.
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