The Blade Weekly: Memory's Big Run Wobbles, But Other Supply Chain Shortages Keep Broadening
Week of June 29 to July 5, 2026 · Zero One Investment Research
Executive Summary
- Taiwan's memory leaders tumbled after China's GigaDevice warned prices had peaked, and a US class action accused Samsung, SK Hynix and Micron of colluding to inflate DRAM prices.
- A report that Meta will resell spare AI compute sparked a global chip selloff, with the Philadelphia Semiconductor Index down 6.27%, though Nomura called the shortage far from over.
- Even so, pricing power spread to passives and timing chips, silicon-wafer and component makers led Taiwan's gainers, and Korea pledged another US$290bn into memory fabs.
Memory went from the market's leader to its biggest doubt
Taiwan's best chip trade of 2026 reversed last week. On July 1, Winbond Electronics (2344 TT), Nanya Technology (2408 TT) and Macronix International (2337 TT) each fell more than 5% after China's GigaDevice, a NOR flash maker whose products overlap with the Taiwan names, issued a formal risk warning that memory prices sit at historic highs, that the rally is unsustainable, and that supply and demand will move back toward balance with prices likely to fall. Winbond closed down 8.4%, Macronix down 7.7% and Nanya down 7.0%, on heavy volume even as the wider TAIEX hit a record. This group had led the whole market in the first half, with Macronix up 294%, Winbond up 151%, Nanya up 134% and Powerchip (6770 TT) up 102%.
GigaDevice's warning was a call on where memory prices go next, and the memory makers' third-quarter contracts are already signed. So their near-term revenue holds even as the shares fell on the weaker potential outlook. Foreign funds had been stepping back for days before the note, net selling Winbond for nine straight sessions and Powerchip for four, so the warning accelerated an exit already underway rather than starting one. Whether this is a pause or a top now rests on whether contract prices actually roll over, which the earnings season starting this month will test.
The pricing debate also reached a US courtroom. A proposed class action accused Samsung Electronics (005930 KS), SK Hynix (000660 KS) and Micron Technology (MU US) of coordinating to hold back supply and inflate DRAM prices, with one filing putting the alleged overcharge at roughly 700%; Samsung rejected the claim as baseless. The suit followed a week in which Micron's commercial chief told the Wall Street Journal that years of buyers demanding rock-bottom prices had starved the industry of investment, comments analysts read as a shot at Apple after Tim Cook blamed the spikes on tight supply. The same price surge is both the plaintiffs' evidence and the makers' defense: legacy DDR3 spot prices sat at 7.6 times year-ago levels, which the suppliers attribute to a genuine AI shortage rather than collusion.
Apple (AAPL US) spent the week looking for a way around the price. It is in talks to buy DRAM and NAND from China's CXMT and YMTC, according to Bloomberg, which would route part of its memory demand outside the Korean and US vendors that dominate the high end. The move carries policy risk, since CXMT sits on a US Defense Department restricted list, but the signal for Taiwanese and Korean memory makers is that their largest single buyer is actively shopping for an alternative to paying the current spot.
Meta's plan to resell spare compute revived the oversupply fear
The past week's biggest market event for semis was a demand-side scare. A Bloomberg report on July 2 that Meta (META US) is building a cloud business to rent out its spare AI compute triggered a global selloff in chip and AI-hardware stocks. The Philadelphia Semiconductor Index fell 6.27% and TSMC's ADR dropped 6.98% overnight, dragging Asian names lower the next session. Neocloud operators took the worst of it, with CoreWeave (CRWV US) down 10.8% and Nebius Group (NBIS US) down 12.4% on the fear that Meta stops renting from them and starts competing instead, while Micron and Sandisk Corp (SNDK US) fell more than 10%.
The read that a big buyer with capacity to spare implies slack in the system was contested quickly. UBS, Morgan Stanley and Bernstein argued that Meta's rentable capacity is small next to the hyperscalers and that reselling spare compute is a near-term revenue lever, not a sign the cycle has turned. Morgan Stanley estimated that renting 250MW at US$40 per watt would lift Meta's 2028 earnings by about US$2.97 a share, or 8%. JPMorgan attributed the depth of the drop as much to crowded positioning and profit-taking as to fundamentals, a caution against reading one day's tape as a verdict on demand.
Nomura took the opposite side outright, calling the AI semiconductor cycle far from its peak and warning of a supply-chain mismatch in the second half as cloud capex keeps climbing. It named advanced packaging, PCB, copper-clad laminate, IC substrate, high-end capacitors, power-management chips and optical components as the next shortages, projected NVIDIA taking 55% of TSMC's CoWoS capacity in 2027, and called the pullback a buying opportunity with TSMC (Taiwan Semiconductor Manufacturing) (2330 TT) its top pick. This was the second oversupply scare in two days, after GigaDevice's memory-price warning, and both run into the same test: the earnings prints that start this month.
Meta gave the bears a second data point the day before. At a conference on June 29 it detailed Vistara, its first in-house CXL memory-expansion chip, which lets it plug DDR4 memory pulled from retired servers into new machines that otherwise take only DDR5. In Meta's system, two chips add 256GB of recycled DDR4 to 768GB of new DDR5 for 1TB per server, with software keeping hot data on the fast tier. The point is cost: reusing working memory rather than scrapping it gives the largest buyers a lever to hold down DRAM spend, which cuts against the demand the memory makers are counting on. A Korean startup, Panmnesia, is chasing a similar approach.
Pricing power spread down the board even as memory sold off
While memory wobbled, the shortage kept pushing into other parts of the supply chain. Murata Manufacturing (6981 JP), the largest maker of multilayer ceramic capacitors, jumped 7% after Citi named it a top Buy, with its book-to-bill at a 20-quarter high and orders up 38% year on year. Taiwan's passive makers limited up in sympathy: Yageo Corporation (2327 TT), Walsin Technology (2492 TT) and Holy Stone Enterprise Co, Ltd. (3026 TT) all locked their daily limits. Industry sources called it the strongest passive-component up-cycle since 2018, and the number behind it is physical: a single NVIDIA rack uses several hundred thousand MLCCs, hundreds of times a conventional server.
The hikes reached the smallest components too. TXC (3042 TT), a frequency-component leader, told its sales channel of increases of 10-30% effective July 1. A separate materials chokepoint opened in high-purity carbon dioxide, used to clean advanced chips, where Korean makers' inventories fell below safety levels after Middle East instability cut the petrochemical output that yields CO2 as a byproduct; liquid CO2 prices rose about 20% this year. After helium and anhydrous hydrogen fluoride, CO2 is the latest input where an outside supply shock lands on chipmaking.
The contrast defined the week. The scares in the first two signals were about whether AI demand is as deep as the price surge implies; the broadening in passives, timing chips and materials showed the surge still spreading rather than narrowing. Both can be true at once, and the split showed up cleanly in the week's performance, where memory and wafer-fab equipment led the losers while passives, silicon wafers and thermal names led the gainers.
The back end kept turning into a bottleneck and a pricing layer
The packaging and test layer had its own strong week. Taiwan's Foundry 2.0 measure, which adds packaging, testing and non-memory chip plants to the pure-play foundries, grew 23% year on year to US$86bn in the first quarter, with the OSAT (outsourced assembly and test) slice up 21%, per Counterpoint. The driver is TSMC (2330 TT) outsourcing much of its CoWoS assembly to Taiwan's back-end houses as its own lines fill. ASE Technology Holding (3711 TT) rose 8.5% on the rotation into the group, Chipmos Technologies (8150 TT) hit limit-up, and Nomura sees ASE's advanced-packaging revenue roughly doubling to US$6.9bn in 2027.
The next packaging front pulled in new names. Innolux (3481 TT), one of Taiwan's largest panel makers, is positioning its large-format glass substrates for TSMC's next-generation panel-level platform, CoPoS, which swaps the round silicon wafer for a square glass panel; Innolux says its glass substrate lifts material utilization above 95% against 70-80% for round wafers, with volume seen around 2028 to 2030. Foxconn packaging arm ShunSin (6451 TT) confirmed it is working with TSMC on the COUPE co-packaged optics platform and will lift capital spending toward NT$5bn. Both are 2028-and-beyond builds, not current-quarter earners, but they widen the set of Taiwan suppliers tied to advanced packaging.
MediaTek's investment case moved from phones to custom silicon
Mediatek Inc (2454 TT) had a violent week that ended with its story rewritten. It hit limit-down on June 26 on fears Qualcomm's data-center push had taken a major ASIC customer, then drew a Street-high NT$10,000 target from Macquarie on June 29 after the broker more than doubled its 2028 ASIC revenue forecast for the company to US$40bn, citing a next-generation Google TPU project moving to a more advanced node. By July 2, foreign brokers put MediaTek's 2027 ASIC revenue near US$20.3bn, about 49% of sales.
The same brokers cut MediaTek's 2026 and 2027 phone earnings, on the memory-price surge pushing buyers toward cheaper 4G handsets, so the custom-silicon ramp is now carrying the case where the phone business once did. The shift also crowds TSMC's 2nm line: MediaTek and Qualcomm are lifting flagship phone chips to 2nm partly to sidestep a packed 3nm node, and from 2027 nearly all new cloud AI silicon is set to pile onto 2nm as well. Analysts previewing TSMC's July 16 call describe 2nm demand as extremely strong.
Korea committed more capital to memory as its shares fell
Korea made the cycle's largest capital commitment into a falling market. At a presidential briefing on June 29, Samsung (005930 KS) and SK Hynix (000660 KS) prepared to detail a combined 2,000 trillion won, about US$1.3tn, across chips, AI data centers and packaging over the next decade, and the two shares fell 4.7% and 3.1% on the news as investors weighed a decade of heavy capex against near-term cash returns. Days later, into the July 2 selloff, the pair pledged a further 392 trillion won, about US$290bn, for HBM and NAND fabs in the Chungcheong region even as their shares fell more than 7%.
Samsung paired the spending with a foundry roadmap aimed at TSMC, fixing its 1.4nm node for 2029 and an improved version for 2030 and, more pointedly, building the base die under its sixth-generation HBM on its own 4nm logic process to sell logic and memory together. The willingness to commit this much capital while the market sold the shares says more than the tape did: the suppliers closest to the memory data are funding a multi-year build rather than pulling back, which sits awkwardly against the same week's oversupply scares.
Power moved up the list of AI bottlenecks
With compute, memory and packaging all tight, power drew more attention as the next gating constraint. About 55% of known US gas-powered data centers plan to use gas turbines and 29% reciprocating engines, per BNEF via the Wall Street Journal, and because large turbines carry a seven-to-eight-year lead time, faster-to-install reciprocating engines are winning share; Caterpillar Inc (CAT US) said its engine backlog has grown to more than 3.5 times a year earlier. At the other end of the timeline, NVIDIA (NVDA US) said it ran Blackwell chips off a Valar Atomics microreactor in Utah, the first time an advanced US reactor has directly powered AI silicon, though the output was small and it was a proof of concept.
For Taiwan the read-through showed up in the tape rather than the fundamentals: power-component names held up while the broader chip complex fell on July 2, and Voltronic Power Technology (6409 TT), a UPS maker, was among the week's biggest coverage gainers at up 28%. Broad adoption of higher-voltage rack power is a multi-quarter ramp, not a current-quarter earnings lever, but the direction of the bottleneck is clear enough that the power supply chain is being valued for it.
The past week's rotation: out of memory and tool makers, into wafers and passives
The clearest signal in the week's performance was a rotation inside the AI supply chain rather than an exit from it. The names that sold off were the ones most identified with the trade this year: memory (Micron down 19.6%, Macronix down 12.3%, Winbond down 10.7%) and the wafer-fab equipment makers (Lam Research down 12.6%, Applied Materials down 9.7%, Hanmi down 9.7%, Advantest down 9.5%). The buying went into the layers the shortage is spreading toward: passive components (Holy Stone up 35.5%), silicon wafers (Sumco up 33.8%, Formosa Sumco up 31.0%), power (Voltronic up 28.5%), AI servers (Wiwynn up 23.0%), thermal (Asia Vital Components up 22.4%) and design services (Alchip up 20.2%).
One distinction the single "chip selloff" label blurs: the equipment sellers fell on the July 2 demand scare, while the Taiwan memory names fell a day earlier on a forward price warning. The two worries are different, one about future orders and one about future prices, and neither moved the contracts already signed. That is why the wafer makers that supply silicon substrate rose while the tool makers that sell fab equipment fell, even though both sit in the same semiconductor capital-spending chain.
| Company | Ticker | Group | 1-week |
|---|---|---|---|
| Holy Stone Enterprise | 3026 TT | Passives | +35.5% |
| Sumco | 3436 JP | Silicon wafers | +33.8% |
| Formosa Sumco | 3532 TT | Silicon wafers | +31.0% |
| Voltronic Power | 6409 TT | Power / UPS | +28.5% |
| Wiwynn | 6669 TT | Server ODM | +23.0% |
| Asia Vital Components | 3017 TT | Thermal | +22.4% |
| Winway Technology | 6515 TT | Test sockets | +20.9% |
| Alchip | 3661 TT | ASIC design | +20.2% |
| Advantest | 6857 JP | Test equipment | -9.5% |
| Intel | INTC US | IDM | -9.4% |
| Hanmi Semiconductor | 042700 KS | HBM packaging equipment | -9.7% |
| Applied Materials | AMAT US | Semicap equipment | -9.7% |
| Largan Precision | 3008 TT | Optical lenses | -10.4% |
| Winbond | 2344 TT | Memory | -10.7% |
| Macronix | 2337 TT | Memory | -12.3% |
| Lam Research | LRCX US | Semicap equipment | -12.6% |
| Qualcomm | QCOM US | Fabless | -14.0% |
| Vicor | VICR US | Power modules | -14.7% |
| CoreWeave | CRWV US | AI cloud | -17.2% |
| Micron | MU US | Memory | -19.6% |
Asian names are week-over-week to the Friday July 3 close; US names to the Thursday July 2 close, as US markets were closed Friday July 3 for the Independence Day holiday. The July 2 global chip selloff sits inside both windows. Coverage-grade names ranked by one-week change; off-theme holdings excluded. Source: Zero One Investment Research; prices via public market data.
Week Ahead / What to Watch
- TSMC 2Q26 earnings call (July 16) The first hard read on whether the oversupply scares or the shortage call is right, plus the 2nm ramp, CoWoS allocation, and any change to full-year revenue and capex guidance.
- Samsung and SK Hynix 2Q26 preliminary results (early July) Whether the HBM and DRAM price surge is flowing through to earnings, and how the shares react against the new US price-fixing suit and the fresh capex pledges.
- Largan Precision 2Q26 call (July 9) An early optical read a week before TSMC, on iPhone-lens and optical-communications demand into the second half; Largan was among last week's losers, down 10.4%.
- Taiwan's June sales prints (early July) Whether the memory, passive-component and substrate price hikes show up in the monthly revenue of Taiwan's listed suppliers.