SEMICONDUCTOR CENTURY: 2026 AI RAGING INVESTMENT ROUTES FIGURE

KEY DATA: THE SIZE OF THE GLOBAL SEMICONDUCTOR MARKET (2025) IS ABOUT $792 BILLION Q1 SALES IN 2026 $298.5 BILLION Q26 PROJECTED IN 2026 IS ABOUT $975 BILLION Q5 BILLION Q5 BILLION Q1 NET PROFITS INCREASE BY 58 PER CENT OVER THE SAME YEAR

I. Why semiconductors are more important than ever

SEMICONDUCTORS ARE THE MATERIAL BASIS FOR ARTIFICIAL INTELLIGENCE, CLOUD COMPUTING, SMARTPHONES, ELECTRIC CARS AND DEFENCE SYSTEMS. EVERY TIME THE AI MODEL GENERATES A RESPONSE, THE CHIP DOES BILLIONS OF CALCULATIONS BETWEEN MILLISECONDS. ALL OF THIS, ALL RUN ON SILICON。

Unlike previous cycles driven by a single device (e.g. mobile phone or PC), the current boom is supported by AI infrastructure expenditure. In 2026, the five super-sized cloud manufacturers committed more than $600 billion to AI infrastructure, an increase of 36 per cent over the same period。

THIS FUNDAMENTAL SHIFT IN DEMAND STRUCTURE IS REFLECTED IN THE FACT THAT HIGH-VALUE AI CHIPS CONTRIBUTE ABOUT HALF OF THE INDUSTRY'S REVENUES, BUT REPRESENT LESS THAN 0.2 PER CENT OF TOTAL OUTPUT. THE SEMICONDUCTOR HAS EVOLVED FROM A CONSUMER ELECTRONIC COMPONENT TO A STRATEGIC ASSET FOR GIANTS OF $10 TRILLION。

EDUCATION NOTE: A MODERN AI CHIP CONTAINS BILLIONS OF TRANSISTOR TUBES THAT ARE ETCHED ON A SILICONE SIZE OF A NAIL CAP. THE NANOVALUE OF THE CHIP REPRESENTS THE SIZE OF THESE FEATURES, AND THE SMALLER THE NANONUMBER MEANS THAT THE MORE TRANSISTORS ARE INTEGRATED ON EACH CHIP, THE GREATER THE ABILITY TO CALCULATE. THE MORE ADVANCED THE NODES, THE MORE DIFFICULT THE MANUFACTURING PROCESS IS。

II. Four core tracks: Who controls Silicon Blueprint

Investors need to look into the four key players in the supply chain, rather than confuse them:

Designer (architect):SUCH COMPANIES DESIGN CHIPS BUT DO NOT MANUFACTURE THEM. THEY HAVE INTELLECTUAL PROPERTY RIGHTS AND HAND OVER DESIGN BLUEPRINTS TO MANUFACTURERS. SINCE PLANTS ARE NOT REQUIRED TO OPERATE, THE MĀORI RATE IS THE HIGHEST IN SCIENCE AND TECHNOLOGY AND USUALLY EXCEEDS 70 PER CENT. YIN WEIDA, AMD, TAKATUNG, APPLE AND BOTTON ALL BELONG TO CRYSTALLESS。

Substitute (manufacturer):Sub-plants are manufactured in large facilities known as the Crystal Circle, with a cost of $20 billion or even more for single plant construction. It accounts for about 70 to 72 per cent of the global generation market and produces about 90 per cent of the world's most advanced 3 nanochips. Every British Blackwell GPU, every Apple A series processor, and every advanced AI accelerator by a super-large cloud manufacturer, comes from a crystal plant in Taiwan. This concentration means that the world ' s most critical technology supply chain operates within a geographical area approximately 180 km from mainland China, an area equivalent to Belgium。

Devicer (toolman):No chip can be made without a machine that produces chips. Asmack is the only company in the world capable of producing ultraviolet optical carving machines, which are necessary to graphically characterize chips at 7 nanometers and below. Without Asma, the entire semiconductor technology road map would have stalled. Application materials, pan-forest semiconductors and cortex provide other key tools for deposition, etching and testing processes。

Repository (store):HIGH-BANDWIDTH MEMORY (HBM) IS ADJACENT TO THE GPU, WHICH IS PLACED ON THE DATA CENTRE SERVER TO TRANSMIT DATA TO THE CHIP AT A RATE THAT NO TRADITIONAL MEMORY CAN REACH. WITHOUT ENOUGH HBM, EVEN THE FASTEST GPU IN THE WORLD CAN ONLY WAIT EMPTY. SK HERCULES, SAMSUNG AND MISAKI ARE THE THREE MAIN PRODUCERS. HBM SALES EXCEEDED $30 BILLION IN 2025, AND TOTAL REVENUE COLLECTION IS EXPECTED TO REACH SOME $200 BILLION IN 2026。

III. Regional dynamics: GVC gaming and restructuring

The semiconductor industry has become central to global economic security. In the current complex international environment, investors need to focus on deep restructuring of supply chain structures and policy spillovers:

The industry's return and localization:With the introduction of the semiconductor incentive bill in many countries, the geographical concentration of advanced production processes has begun to spread moderately. The progress of the Arizona plant has become a yardstick for measuring “supply chain resilience”, with early purchase agreements for giants such as apples, marking a shift in global advanced production capacity from a single region to a multipolar distribution。

Technology access and market adaptation:Strict export controls are forcing transnational chip giants to reassess their revenue structures. Enterprises such as In Weida and Asmeh are maintaining global market shares through the development of customized products under a compliance framework. This “compliance-driven innovation” is both an enterprise's survival strategy and a reflection of the global market's rigid demand for high performance solvency。

Calculated redistribution of resources:In areas where access to computing is limited, industrial logic is shifting from “seeking maximum computing” to “optimizing computing efficiency”. Domestic head producers and model developers seek to mitigate structural contradictions in the supply of and demand for computing power through software optimization, structural innovations (e.g., integration) and the deployment of home-grown alternatives in specific scenarios。

New patterns of cross-border movement:With the inertia of globalization, the cross-border movement of calculated resources takes more subtle and more motor forms. Policymakers are strengthening regulation by improving transparency in the supply chain and establishing a chip traceability mechanism. For investors, this means that compliance risk has become a key dimension in assessing the semiconductor asset premium。

  iv. priority companies worthy of study

NVDA

YOUNG WEIDAR IS THE MOST ICONIC COMPANY IN THE CURRENT SEMICONDUCTOR CYCLE. ITS GPU IS THE DEFAULT HARDWARE FOR TRAINING THE AI MODEL, AND THE CUDA SOFTWARE PLATFORM IS BUILT MORE PERMANENTLY THAN ANY HARDWARE ADVANTAGE。

Key financial data:

• 2026 Total revenue for fiscal year: US$ 215.9 billion, an increase of 65 per cent over the same year (SEC Form 8-K, February 2026)
• Data centre operations: between $193.7 billion and $194 billion, an increase of 68 per cent over the same period
• 2026 FISCAL YEAR Q4 RECEIVED: $68.1 BILLION, 73 PER CENT INCREASE OVER THE SAME PERIOD
• Weeda accounts for 15.8 per cent of the global semiconductor market
• Forward earnings: about 32 times

Core investor concerns:

• The Vera Rubin platform, based on the 3nm process, carries 336 billion transistor tubes, with reasoning costs reduced by up to 10 times from Blackwell. AWS, Google Clouds, Microsoft Azure and Oracle Clouds are all committed to deployment. Weeda has locked away most HBM4 supplies from SK Hercules and Samsung。
• THE CUDA MOAT IS DEEPER THAN MOST INVESTORS KNOW. MILLIONS OF DEVELOPERS HAVE DEVELOPED AI SOFTWARE BASED ON CUDA, SWITCHING TO COMPETING CHIPS MEANS REWRITE MULTI-YEAR CODE ACCUMULATION, GENERATING HUGE MIGRATION FRICTIONS。
• Google, Amazon and Microsoft each build in-house self-research chips to reduce dependence on Weeda, which are the most important long-term structural risks。
• Export controls on China are one of the most significant hidden pressures on technology companies today。

STATION ELECTRICITY (TSM)

It is both the most critical and the most geographically concentrated technology supply chain node globally。

Key financial data:

• Revenues in 2025: approximately $122.5 billion to $122.9 billion, an increase of approximately 31 to 36 per cent over the same period
• 2026 Q1 NET PROFIT: 58 PER CENT INCREASE OVER THE SAME YEAR, A RECORD HIGH IN THE FOURTH CONSECUTIVE QUARTER
• 2026 Q2 RECEIPT GUIDELINES: $39 BILLION TO $40.2 BILLION
• 2026 Capital expenditure for the fiscal year: $52 billion to $56 billion
• IN 2026, 74% OF THE Q1 CRYSTAL CIRCLE HARVEST CAME FROM ADVANCED PROGRAMS OF 7 NANOMETERS AND BELOW
• Forward earnings: about 24 times

Core investor concerns:

• ACCUMULATION IS THE MOST DIRECT BENEFIT OF THE AI CHIP EXPENDITURE, REGARDLESS OF THE SIZE OF THE FAMILY, AND IS CHARGED TO THE QUANTITATIVE INFRASTRUCTURE OF THE WHOLE AI SUBJECT, RATHER THAN TO A PARTICULAR WINNER。
• The geopolitical risk premium explains the valuation discounts of the build-up relative to British Wida and Moto, although the rate of increase is comparable or even stronger than both. Investors must take the initiative to determine whether 24 times the forward rate reasonably reflects the risks inherent in a scenario that never occurred。
• The distribution in Arizona is real, but is currently limited in scale. The second plant is expected to start production of 3 nanometers by the end of 2026, and the apple chip purchase agreement provides early commercial validation。

ASMEH (ASML)

ASMACK IS THE ONLY COMPANY IN THE WORLD THAT CAN MAKE EUVS. WITHOUT THESE MACHINES, IT IS IMPOSSIBLE TO PRODUCE CHIPS BELOW 7 NANOMETERS; WITHOUT THESE CHIPS, THERE IS NO ADVANCED AI。

Core investor concerns:

• THE EUV MONOPOLY OF ASMEH IS THE CULMINATION OF DECADES OF EXPERTISE IN PHYSICS, OPTICAL AND PRECISION MECHANICAL ENGINEERING. NO OTHER COMPANY IS CLOSE TO DEVELOPING SIMILAR EQUIPMENT AND THIS MOAT CANNOT BE REPLICATED IN THE SHORT TERM。
• Every new round factory around the world, whether a project supported by the Chips Act, a Japanese semiconductor investment plan or an electricity build-up expansion plan, represents the demand for equipment in Asma。
• The export restrictions imposed on China have constricted its market location and will persist as long as the current geopolitical environment remains unchanged。
• The long-term backlog of orders has provided rare visibility to Asma and clients have to submit their orders years in advance, which is extremely rare in most technology companies。

AMD

AMD IS THE MOST SUBSTANTIAL AI ACCELERATOR COMPETITOR IN NEW ZEALAND, BENEFITING FROM THE SAME BUILD-UP POWER GENERATION RELATIONSHIP AS IN NEW ZEALAND, AND IS ATTRACTING SUPER-LARGE CLOUD MANUFACTURERS WHO WISH TO DIVERSIFY THEIR RELIANCE ON SUPPLIERS。

Key financial data:

• MI308 DECLINE (APPROVED FOR EXPORT TO CHINA) SINGLE-SEASON SALES OF $390 MILLION
• DATA CENTRE GPU RECEIPT GUIDANCE: COMPOUND ANNUAL GROWTH RATE FOR THE NEXT FIVE YEARS 60%

Core investor concerns:

• MANY LOGIC LIES IN THE DECENTRALIZATION OF THE DEMAND FROM SUPPLIERS OF SUPER-LARGE CLOUD MANUFACTURERS. WITHOUT THE WILLINGNESS OF A LARGE TECHNOLOGY COMPANY TO RELY ENTIRELY ON A SINGLE CHIP PROVIDER, THE MARKET DOMINANCE OF INVERDA CREATED A STRUCTURAL INCENTIVE TO INTRODUCE AMD AS A SECOND SUPPLIER。
• The AMD ROCm software platform is its most critical challenge. Although it has made considerable progress, it still lags behind CUDA in terms of the rate of adoption by developers. Closing the software gap is more important than closing the hardware gap。

AVGO

ABX IS DESIGNED SPECIFICALLY FOR SUPER-LARGE CLOUD MANUFACTURERS, THE AI ACCELERATOR (ASIC), WHICH IS A CHIP THAT OPTIMIZES A SPECIFIC TASK LOAD, RATHER THAN A GENERIC GPU. GOOGLE'S TPU, WHICH RUNS THROUGH THE ENTIRE AI PRODUCT SYSTEM, IS EXACTLY THE CHIP THAT MOTO DESIGNED。

Key financial data:

• 2026 FISCAL YEAR AI SEMICONDUCTOR CAMP REVENUE IS PROJECTED TO EXCEED $30 BILLION
• Forward earnings: about 41 times, the highest of major semiconductor companies

Core investor concerns:

• As super-large cloud manufacturers scale up AI deployment, customized chips for specific load optimization will become increasingly attractive. The collaboration between Botton and Google and Meta is strong and solid and leads in the area of customized chips。
• Multiplication of earnings requires a strong execution by Chase. The slowdown in the agreed chip orders at any super-large cloud plant would have a significant impact on this valuation level。

SK HERCULES

SK Hercules runs HBM markets with a market share of about 53 to 62 per cent. Its HBM3e is the memory standard for the British Blackwell GPU, HBM4 will be integrated into the British Rubin platform, which has locked most of the HBM4 supply。

Core investor concerns:

• HBM IS THE REAL BOTTLENECK IN THE DEPLOYMENT OF THE AI CHIP. EVEN IF WE DELIVER EVERY GPU ON TIME, THERE ARE NOT ENOUGH HBMS, AND THESE GPUS CAN'T RUN AT FULL CAPACITY, WHICH GIVES SK HERCULES A NON-PRICING POWER IN THE CURRENT WAVE OF AI INFRASTRUCTURE。
• SK HERCULES IS LISTED ON THE KOREAN EXCHANGE AND CAN OBTAIN OPENINGS THROUGH KOREAN VOUCHER ACCOUNTS, SOME INTERNATIONAL ISSUERS, OR INDIRECTLY VIA SEMICONDUCTOR ETF。
• MEMORY HAS TRADITIONALLY BEEN STRONG AND CYCLICAL. ALTHOUGH HBM HAS SOME NATURAL BARRIER TO OVERSUPPLY DUE TO SPECIAL MANUFACTURING PROCESS REQUIREMENTS, INVESTORS STILL NEED TO UNDERSTAND THE CYCLICAL RISKS BORNE BY MEMORY PLATES。

V. SEMICONDUCTOR ETF

SMH - SYNDICATE SEMICONDUCTOR ETF

USING THE MOST EXTENSIVE SEMICONDUCTOR ETF, THE MANAGEMENT SIZE IS APPROXIMATELY $46 BILLION TO $47 BILLION, HOLDING 26 COMPANIES, COVERING CHIP DESIGNERS, SURROGATE FACTORIES, EQUIPMENT MANUFACTURERS AND MEMORY PRODUCERS. MAIN HOLDING TANKS: YOUNG WEIDA IS ABOUT 19.4 PER CENT, ELECTRICITY IS ABOUT 11.6 PER CENT, AND ACCESS IS ABOUT 7.7 PER CENT. MANAGEMENT RATE: 0.35 PER CENT. IT IS WIDELY RECOGNIZED AS THE SINGLE MOST EFFICIENT TOOL TO COVER THE FULL SUPPLY CHAIN OF THE AI SEMICONDUCTOR THEME。

SOXX - iShares Semiconductor ETF

SMH'S CLOSEST CONTEST, HOLDING 30 COMPANIES, HAS ALMOST THE SAME HISTORICAL LONG-TERM RATE OF RETURN AS SMH. MANAGEMENT RATE: 0.35 PER CENT. THE FIVE-YEAR RETURN AS OF 2025 WAS APPROXIMATELY 140 PER CENT。

SOXQ - SHUNSUNG PHLX SEMICONDUCTOR ETF

THE SMH AND SOXX PLATES ARE ROUGHLY COMPARABLE AND MANAGEMENT RATES ARE SIGNIFICANTLY LOWER. MANAGEMENT RATE: 0.19 PER CENT, THE LOWEST OF THE MAIN SEMICONDUCTOR ETF, IS THE BEST OPTION FOR COST-ORIENTED INVESTORS TO OBTAIN SIMILAR PLATE OPENINGS。

Educational description:WHEN COMPARING ETF, YOU NEED TO FOCUS ON THE WEIGHT CONSTRUCTION METHOD. SMH USES CEILING MARKET VALUE WEIGHTS TO ENSURE THAT BRITAIN DOES NOT BECOME OVER-CENTRALIZED. UNDERSTANDING HOW ETF IS CONSTRUCTED HELPS TO UNDERSTAND WHAT IT ACTUALLY HOLDS AND HOW IT WILL BEHAVE DIFFERENTLY WHEN IT MOVES。

Critical risk early warning

AI CONCENTRATION RISK。THE WHOLE INDUSTRY PUT ALL THE EGGS IN AI IN THIS BASKET. THE IMPACT ON SEMICONDUCTOR CAMPS WOULD BE IMMEDIATE AND IMMEDIATE IF AI INFRASTRUCTURE EXPENDITURES WERE SLOWED DOWN BECAUSE THEY WERE LESS THAN EXPECTED, GEOPOLITICAL SHOCKS OR EFFICIENCY BREAKTHROUGHS. DELOITTE AND TOUCHE STILL EXPLICITLY IDENTIFIED THIS AS A CORE RISK IN THE CONTEXT OF THE INDUSTRY ' S RECORD HARVEST。

Geopolitics and supply chain risks。Taiwan produces about 90% of the world's most advanced chips. The impact on the entire global scientific and technological industry once Taiwan ' s manufacturing operations have been disrupted in any form can hardly be overemphasized. The split in Arizona is moving forward, but it will take several years for the creation of a real shift of focus from Taiwan。

Uncertainty in export control policy。UNITED STATES SEMICONDUCTOR EXPORT CONTROLS ARE INFLUENCED BY POLITICAL FACTORS AND RISK POLICY CHANGE. THE CURRENT GOVERNMENT HAS MAINTAINED BOTH PARTIAL CONTROLS AND OTHER RESTRICTIONS, INCLUDING THE REPEAL OF THE BIDEN-ERA AI PROLIFERATION RULES. FUTURE POLICY DECISIONS MAY OPEN NEW MARKETS FOR UNITED STATES CHIP COMPANIES OR CLOSE EXISTING CHANNELS。

Memory cycle risk。AS A RESULT OF AI-DRIVEN DEMAND, CONSUMER-LEVEL MEMORY PRICES HAVE RISEN ABOUT FOURFOLD BETWEEN SEPTEMBER AND NOVEMBER 2025 AND ARE EXPECTED TO RISE FURTHER BY UP TO 50 PER CENT BY EARLY 2026. DELOITTE WARNED THAT THE EXPANSION OF MEMORY CAPACITY COULD TRIGGER OVERSUPPLY AND PRICE COLLAPSES AT THE END OF 2026 OR 2027. MARKETS THAT GO BEYOND THE TOP STAGE TEND TO GO BEYOND THE BOTTOM。

Valuation risk。The forward rate of earnings, about 32 times that of the British Virgin Islands, about 41 times that of the British Virgin Islands, is embedded in very high growth expectations. Single-season harvests are below expectations, downward adjustments or shifts in market sentiment can trigger sharp declines in stock prices even when basic operations remain robust。

Key catalysts of concern

A trillion-dollar milestone。Q1 SEMICONDUCTOR SALES REACHED $298.5 BILLION IN 2026, MAKING THE YEAR-ROUND TARGET OF $975 BILLION TO $1 TRILLION REAL. WHETHER THE MOMENTUM WILL BE MAINTAINED IN THE SECOND HALF OF THE YEAR OR WHETHER AI ' S SLOWDOWN IN SPENDING WILL LEAD TO WEAKNESS AT THE END OF THE YEAR IS THE CENTRAL CONCERN OF THE ENTIRE PLATE。

Accumulated electricity from Arizona is able to climb the slope。The second Arizona plant started production of 3 nanochips at the end of 2026. Good rates and yields will determine the rate at which the United States will reduce its dependence on Taiwan; the Apple chip purchase agreement provides the first meaningful commercial certification。

The British Vera Rubin platform is deployed。The tenfold reduction in the cost of reasoning is the most important product milestone in Britain. The successful deployment of a super-large cloud manufacturer will significantly extend the growth curve of data centres in Great Britain; any delay or failure to meet standards will be a major negative catalyst。

AMD MARKET SHARE PROGRESS。The MIM350 and MI400 products of AMD are expected to be launched in 2026 and will test whether their ROCm software improvements are sufficient to attract large-scale deployments of super-sized cloud manufacturers, rather than just the current pilot project phase。

MEMORY PRICING AND HBM4 SUPPLY。The integration of HBM4 with the Britain Rubin platform created a new demand pull. Tracking the good rate of HBM4 production by SK Hercules and the progress of Samsung and Mei-ray in the certification of HBM4 products will be key signals in judging the evolution of the price of the reservoir in 2027。

To study the frame of thinking on this block:

• INVESTORS WISHING TO OBTAIN THE HIGHEST LEVEL OF CONFIDENCE IN AI CHIP EXPOSURE WILL FOCUS ON THE RISKS INHERENT IN BEING BOUND BY THE EXPORT CONTROL FIRM AND CURRENT VALUATION LEVELS
• INVESTORS WHO WISH TO OBTAIN AI INFRASTRUCTURE EXPOSURE WHILE REDUCING THE RISK OF A CONCENTRATION WILL STUDY SMH OR SOXX TO COVER THE FULL SUPPLY CHAIN
• Investors who believe that the geopolitical discount on the build-up of electricity is too obvious in relation to their advancing decentralized layout may find its lower value multiplier relative to the rate of growth worth in-depth study
• Investors wishing to gain the most defensive openings in the supply chain will focus on Asma, as demand will be created for each new crystal mill anywhere in the world

DEMAND IS REAL AND GROWTH IS EXTRAORDINARY. RISKS, INCLUDING GEOPOLITICAL CONCENTRATION, AI DEPENDENCE, MEMORY CYCLE AND VALUATION, ARE EQUALLY REAL. INVESTORS WHO UNDERSTAND THESE FOUR DIMENSIONS AT THE SAME TIME CAN LOOK AT THE PLATE WITH THE SOBERNESS AND THOROUGHNESS IT REQUIRES。

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Data as of May 2026. Data sources include WSTS, final data for the global semiconductor market for 2025 and projections for autumn 2025, March 2026. SIA, annual global semiconductor sales, 2025, 6 February 2026. SIA, 2026 Q1 global semiconductor sales data, May 4th, 2026. Omdia, the semiconductor market broke down $830 billion in 2025 and March 2026. Deloitte Insights, 2026 Semiconductor industry outlook, February 2026. SEMI, 300mm Crystal Circle Outlook Report. British Vida, SEC Form 8-K 2026 Fiscal Year, 25 February 2026. Electricity stock, 2026 Q1 financial paper and Q2 guidelines, 2026 April. LKS Brothers, midstage chip battle 2026 analysis, May 2026. Lawfare, Congress enters the chip battle in March 2026. U.S. Congress Research Service (CRS), United States Export Controls to China: Advanced Semiconductor. Chatham Institute, AI Export Control Analysis, April 2026. Counterpoint Research (quoted from Dataconomy), market share of station-based electricians Q3 2025, December 2025. FinancialContent, Depth of Stations Analysis, December 2025. Gartner, semiconductor market share, 2025. Techi, Vera Rubin analysis, April 2026。

Disclaimer: This material is for reference purposes only and does not constitute an investment proposal or offer. Investments involve risks, securities prices may fluctuate significantly, investors may lose all or part of their principal, and past performance does not represent future performance。