The Blade Weekly: Intel Pulls Chip Orders Back From TSMC to Its Own Leading-Edge Fab
Week of July 12 to July 18, 2026 · Zero One Investment Research
Executive Summary
- Intel last week moved most of its Nova Lake compute tiles back to its own 18A process from TSMC, and won packaging designs at Google and AWS.
- TSMC last week raised its full-year revenue growth guide past 40% for the second time this year, while guiding near-term margin lower as its 2nm ramp scales.
- In memory, HBM4 shipments, record wafer price hikes and multi-year contracts pointed to a still-tight supply side across the DRAM stack.
Intel pulled most of its 2nm work back to 18A and won packaging designs from TSMC
Intel was reported last week to have moved 80% to 90% of its Nova Lake compute tiles back to its own 18A process from TSMC's 2nm, cutting more than 60% of the order TSMC had expected, after 18A yield climbed from 65% to 85%. That still trails TSMC's N2 at 90%, but the yield efficiency gap has narrowed enough to make using Intel's fab economically viable.
Packaging is the second front. Intel's EMIB-T back-end yield has passed 90%, and it embeds silicon bridges directly in the substrate, escaping the interposer size limits that constrain TSMC's CoWoS. SemiAnalysis reports Google will use EMIB-T for its ninth-generation TPU, and KeyBanc counts AWS Trainium 3 as a second win. TSMC's own chairman publicly welcomed the competition, calling it relief for a back-end bottleneck he called extremely tight.
The near-term TSMC revenue hit looks containable. Supply-chain contacts told Economic Daily News that N2 is oversubscribed, and Apple, NVIDIA and AMD would absorb the freed slots quickly. The longer question is the design-win list KeyBanc attributes to Intel's 18A and 14A nodes: Apple, AMD, NVIDIA, Marvell, Microsoft, Micron and OpenAI. Whether those convert is what Intel's 2Q26 results, due late July, start to answer.
In brief: TSMC's ecosystem added packaging capacity of its own. Powertech will put US$400m into a Singapore panel-level packaging venture led by Broadcom, whose custom-silicon accounts include Google, Meta and OpenAI, while TSMC confirmed its COUPE optical-packaging platform entered production this year. ASIC-equipped AI servers are 27.8% of shipments in 2026 on TrendForce's count, the highest since 2023.
TSMC raised its full-year growth guide past 40% for the second time this year
Last week TSMC reported second-quarter revenue of US$40.2bn at the top of its guide, with gross margin of 67.7% above the guided range. Operating margin of 60.3% also beat, and net profit rose 77.4% YoY. The bigger signal was the guide: TSMC lifted its full-year US dollar revenue growth to slightly above 40%, a second raise from the near-30% pace it set in January. It also took FY26 capex up to US$60bn to US$64bn.
The one line that stepped down was the forward margin guide. TSMC set 3Q26 gross margin at 65% to 67%. That is a step below the 67.7% it just delivered. CFO Wendell Huang tied the pressure to two costs the company has named before: the 2nm ramp, which he put at a 3 to 4 point drag on second-half margin, and the overseas fabs, at 2 to 3 points a year for several years and possibly widening. Neither is new. TSMC has guided for some time that leading-edge ramps and offshore capacity would weigh on margin as they scale, so the softer guide reflects costs it had already signaled rather than a fresh problem.
On the cycle, TSMC stayed firmly bullish. Chairman C.C. Wei said AI demand could stay strong through 2029 and 2030, and that the supply gap remains very large. Both the guide raise and the higher capex point the same way: TSMC is spending as if this leg of the cycle still has years to run. Its July revenue, due in early August, is the first monthly print against the new guide.
SK Hynix fell a record 15.4% in a day, even as HBM4 shipped and shortage signals held
SK Hynix fell 15.4% in Seoul on 13 July, its largest single-day drop on record, and its Nasdaq ADR fell another 13% later last week, as Korea's Kospi tripped its circuit breaker and the Bank of Korea raised rates again. Samsung fell with it, and both sit well below their June highs.
The same week also brought a run of supply-side signals. SK Hynix has begun mass shipments of 12-layer HBM4 to NVIDIA, the first qualified as final spec, and its chief executive repeated that the shortage runs into 2030. Upstream, Powerchip raised DRAM wafer prices 45% in July and put 3Q26 logic demand at 1.4 times available capacity. CXMT, on Citrini Research's model, will still land about 25,000 wafer starts a month short of Micron this year, with most output kept for China. A selloff reprices expectations; signed contracts, HBM4 qualification and monthly price hikes are unaffected.
The open question is peak earnings, and SK Hynix's and Samsung's 2Q26 results, due late July, are where it gets tested against actual 3Q contract pricing.
Powerchip raised DRAM wafer prices 45% as Inventec sees the server component shortage worsening in 3Q26
Powerchip lifted July DRAM wafer prices 45% and 8-inch and 12-inch logic prices 10% to 15%, with 3Q26 logic demand running at 1.4 times available wafer starts. The move matters because of where it lands: mature nodes, where the buyers are power-management and consumer parts with far less room to pass the cost on than the AI chip designers absorbing TSMC's leading-edge hikes.
The same pressure showed up across the supply chain. ASML raised its FY26 revenue guide to €43bn to €45bn and is signaling equipment price increases, which TSMC is reported to be resisting after deferring High-NA EUV purchases in April. Formosa Plastics raised two electronic chemicals at once, unusual for a supplier that holds more than half of Taiwan's hydrofluoric acid and isopropyl alcohol markets.
The shortage has now reached the server line. Inventec, the largest server motherboard maker, said the component gap widens from 3Q26, with memory, CPUs and SSDs worst hit. It also flagged a disclosure problem: firms short of parts stay quiet for fear suppliers redirect allocation elsewhere, so public commentary understates the squeeze.
The AI buildout drew state money and trade leverage across three countries
TSMC will invest another US$100bn in Arizona for four or more fabs, taking its committed US total to US$265bn, and named overseas fabs as a 2 to 3 point annual drag on gross margin for years. That dilution is the visible cost of onshoring, and it does not fade once the 2nm ramp matures.
Two governments moved within days. Japan launched Noetra, a 44-company venture including SoftBank, Sony and Honda, with state support of up to ¥1tn and a bulk order of about 27,500 NVIDIA Rubin chips, aimed at physical AI for factories and robots rather than frontier models. And Washington, in trade talks, argued it should share the "excess profits" Samsung and SK Hynix earn from US buyers, the Korea Times reported, after Korea's first-half semiconductor exports reached US$192.43bn, up 162.5%. Seoul said the idea was raised without detail.
The passives round-tripped last week, and Monday's unwind spread to mature-node foundries
The past week's selling was broad and foreign-led, and it concentrated in one place: passive components and the materials around them. Walsin (2492 TT) fell 33.9% and Yageo (2327 TT) 22.3% even though Yageo had just reported record 2Q26 revenue and announced price increases across its capacitor lines. Record trailing revenue and signed price hikes on one side, a 22% weekly drop on the other, means positioning unwound faster than the fundamentals changed. Japan's Murata and Taiwan's Holy Stone fell as hard, and the substrate and wafer names Ibiden and Sumco went with them. Almost nothing in the coverage universe rose; Hanmi Semiconductor, a Korean maker of HBM packaging equipment, was the rare exception.
Monday extended the unwind rather than ending it. Yageo and Walsin locked limit-down for a second straight session, leaving Yageo 48% below its late-April peak, on a shareholder-sale rumor the company denied and against a record 2Q26 of NT$44.5bn. The selling also spread to the mature-node foundries that had led for weeks: United Microelectronics, Vanguard and Powerchip hit or neared their daily limits after TSMC's call flagged non-AI mature-node demand as "not that strong." Not everything fell: TSMC itself rose 1.75%, and SK Hynix and the wafer maker Formosa Sumco turned back up, as capital rotated toward the advanced-node and memory leaders.
| Company | Ticker | Group | 1-week |
|---|---|---|---|
| Hanmi Semiconductor | 042700 KS | HBM equipment | +12.5% |
| WPG Holdings | 3702 TT | IC distribution | +2.8% |
| ASUSTeK | 2357 TT | PC / servers | +2.3% |
| Microsoft | MSFT US | Hyperscaler | +2.3% |
| Largan Precision | 3008 TT | Optical | +1.5% |
| Synnex | 2347 TT | IC distribution | +1.2% |
| Formosa Sumco | 3532 TT | Silicon wafer | +0.3% |
| AUO | 2409 TT | Display | -18.0% |
| Silicon Motion | SIMO US | NAND controllers | -19.0% |
| Rohm | 6963 JT | Power semi | -19.1% |
| Innolux | 3481 TT | Display | -19.5% |
| Renesas | 6723 JT | Auto / analog | -19.7% |
| Winway Technology | 6515 TT | Test sockets | -21.5% |
| Yageo | 2327 TT | Passives | -22.3% |
| Murata | 6981 JT | Passives | -22.6% |
| Ibiden | 4062 JT | IC substrate | -22.7% |
| Sumco | 3436 JT | Silicon wafer | -25.4% |
| Holy Stone | 3026 TT | Passives | -31.3% |
| Walsin Technology | 2492 TT | Passives | -33.9% |
The table shows week-over-week changes to the Friday July 17 close; the Monday July 20 moves described above are not in it. Taiwan, Korea, Japan and the US all traded that Friday, so the figures share one as-of date and include the reaction to TSMC's Thursday earnings call. 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 July revenue (early August). The first monthly print against the raised full-year guide; a record month keeps the above-40% growth path on track.
- SK Hynix and Samsung 2Q26 results (late July). The numbers behind the peak-earnings fear and the "excess profits" claim, plus 3Q memory contract pricing.
- Intel 2Q26 results (late July). Progress on 18A yield and EMIB-T packaging, now that TSMC has publicly welcomed the back-end competition.
- Powertech investor conference (28 July). Detail on the Broadcom Singapore packaging venture's terms and capacity timing.