Zero One Investment Research Daily Intelligence Brief, August 12, 2026

Memory prices up tenfold in five quarters as TSMC packaging still trails demand

Top Market Signals

TSMC's packaging capacity still trails customer demand

TSMC (2330 TT) told an industry conference that its advanced packaging capacity is approaching customer demand but has still not caught it, three years into a build that has roughly doubled that capacity every year.

Ho Chun, TSMC's vice president of advanced packaging technology and service, said at the 2026 OCP APAC Summit on 11 August that the company now runs ten advanced packaging plants. CoWoS (chip-on-wafer-on-substrate, the step that joins logic chips to memory stacks on one carrier) is in volume production at 5.5 times reticle size, the largest area a lithography tool can print in a single exposure, with several AI customers holding yields above 98% and some at 99%. He expects 14 times reticle size by 2029, and SoIC (system on integrated chips) bonding pitch to tighten from 6 microns in 2025 to 4.5 microns over the same period.

The harder problem Ho described is qualification. Once a package passes three times reticle size, its interaction with the circuit board, the cooling and the rack structure rises sharply, and a single package component has to beat automotive-grade quality for a large AI system to hold its overall failure rate down. Validating parts on their own no longer answers the question.

Customers chasing capacity have started buying substrates from more than one supplier, and Ho said that works against them. Different substrates carry different thermal and mechanical properties, which narrows the CoWoS process window and forces a fresh qualification of the system, cooling and surface-mount steps for each new source. TSMC has moved development from sequential to parallel in response, and customer products can now enter the fab before the test vehicle is signed off and the process fully fixed, with corrections made inside the production cycle.

TSMC plans to publish system boundary conditions six quarters ahead of volume production so integrators, equipment makers and materials suppliers can develop against them at the same time. Ho named memory and ABF (Ajinomoto build-up film, the insulating layer in high-end chip substrates) as the two material shortages he wants the industry to work on.

Linked stocks: 2330 TT, 3711 TT, NVDA US

Memory prices have risen tenfold in five quarters

Sercomm (5388 TT) chairman Wang Wei said a 1Gb unit of memory that cost under US$0.30 five quarters ago now costs more than US$3.00, and that the component squeeze will run through all of 2027.

Speaking at the networking maker's 2Q26 earnings call on 11 August, Wang called the increase unprecedented and attributed the scarcity to hyperscale cloud operators taking supply ahead of everyone else. He said Sercomm has held its allocation through long-standing relationships with the three largest memory makers and with Taiwanese suppliers, which lets it move parts between products as needed.

The consequence reaches past his own order book. Many of Sercomm's European and American competitors sit under private equity ownership and carry high leverage, and Wang said the combination of interest costs and component inflation could push some of them out of the market. Sercomm has run a net cash balance sheet, which he framed as what carries the company through this period.

Wang guided 2H26 above 1H26 without qualification, and argued that power limits on large data centers, which would need tens of gigawatts of new supply to upgrade across the United States, will push some inference work toward the edge. The routers his company installs in homes and on streets are what he expects to carry it.

Linked stocks: 5388 TT, 2408 TT, 005930 KS

Siliconware commits NT$100bn to a packaging plant

Siliconware Precision Industries, the packaging arm of ASE Technology (3711 TT), broke ground on a plant at Douliu in Yunlin county with an investment close to NT$100bn, and will install CoWoS advanced packaging inside it.

Vice chairman Chang Yen-chun said the site covers six hectares and that the first phase opens in 2028, creating 1,300 jobs, rising above 2,200 once the full plant runs. It pairs with the Huwei plant nearby, which broke ground in November 2022 and opened in September 2025, giving Siliconware two linked sites in the same county.

The Douliu commitment sits inside a wider build. Siliconware has added capacity at Taichung, Changhua, Yunlin, Hsinchu and Tainan over the past two years for roughly NT$200bn in total, and has hired more than 8,000 people in Taiwan across those sites. Chang said Douliu is the larger of the two Yunlin plants.

Economy minister Kung Ming-hsin said AMD's global vice president had raised cooperation with Siliconware on advanced semiconductors in a meeting days earlier. The first phase lands in 2028, a year before TSMC expects to reach 14 times reticle size, so this second source is being built against a specification that is still moving.

Linked stocks: 3711 TT, 2330 TT, AMD US

Compal targets 40% of revenue from AI servers

Compal Electronics (2324 TT) opened its Daxi AI server plant in Taoyuan and set a target of 30% to 40% of company revenue from AI servers next year, against about 2% at the end of 2025.

Chairman Chen Jui-tsung said AI server revenue reached a high single-digit share of the total in 2Q26 and should reach about 10% by the end of this year. The Daxi site showed NVIDIA's HGX Rubin NVL8 platform for the first time, starts contributing revenue in 4Q26 and is expected to run at full utilization in 2H27.

The plant moves Compal up the assembly stack. Its AI server work stays at L10 whole-machine assembly through 4Q26, with L11 rack integration shipping from Daxi in the fourth quarter. Chen said the site doubles system assembly capacity, adds rack building, carries Compal's own liquid cooling, and doubles as the development center where new AI server products move from design into production.

Two plants in Texas enter trial production in 4Q26 and volume production in 1Q27, serving US hyperscale and enterprise customers, while Vietnam goes from four surface-mount lines to ten. Chen described Compal as an outsider to AI servers two years ago that has now reached the middle of the field, with the leading group as the target.

Linked stocks: 2324 TT, NVDA US, 2317 TT

SK Hynix becomes Kioxia's biggest shareholder without control

SK Hynix (000660 KS) has become the largest shareholder in Kioxia, the third-largest maker of NAND flash memory, without gaining a single vote in the company.

Kioxia disclosed that its largest shareholder changed from Toshiba to BCPE Pangea Cayman2, a special purpose vehicle through which SK Hynix holds convertible bonds. Toshiba sold down seven times between 15 July and 3 August, taking its stake from 15.10% to 14.06%, which left the SK Hynix vehicle on 14.19% at the top of the register.

SK Hynix put about KRW4tn into Kioxia through two vehicles in 2018. The one it shared with Bain Capital sold out in full when Bain exited in June 2026, leaving roughly KRW1.3tn of convertible bonds in the second.

Converting those bonds into voting stock would need competition clearance across several jurisdictions, and Japan is expected to withhold approval to protect its own semiconductor supply chain. So the largest holder on the register of Japan's biggest NAND maker is a Korean competitor that has no way to direct it.

Linked stocks: 000660 KS, 005930 KS, MU US

ASIC racks tripled at Foxconn's industrial unit

Foxconn Industrial Internet, the mainland manufacturing unit of Foxconn (2317 TT), reported 1H26 revenue of RMB557.86bn, up 54.6%, and net profit up 96%, with shipments of racks built around custom chips growing threefold.

2Q26 revenue reached RMB306.78bn, up 53% YoY and 22% QoQ, the first quarter the unit has cleared RMB300bn. Net profit of RMB13.15bn rose 91% YoY and 24% QoQ, the fourth consecutive quarter above RMB10bn, and return on equity reached 13.36%, up 5.72 percentage points from a year earlier.

Cloud service provider AI server revenue grew 2.3 times, GPU AI rack shipments 3.2 times, ASIC AI rack shipments threefold and ASIC CPU server shipments 2.5 times. ASIC here means an application-specific integrated circuit, the custom accelerator a cloud operator designs for its own workloads rather than buying from NVIDIA, and inside the largest builder of both kinds of rack it is now scaling at close to the merchant GPU rate.

Networking grew alongside but more slowly. Data center high-speed networking revenue doubled, shipments of switches at 800G and above rose 1.4 times, as did SuperNIC network cards. The company said it has delivered a prototype co-packaged optics switch, where the optical engine sits in the same package as the switch chip instead of in a pluggable module.

Linked stocks: 2317 TT, NVDA US, AVGO US

先聲 First Word: Exclusives from Chinese-Language Sources

DB HiTek runs full as TSMC and Samsung leave 8-inch

South Korea's DB HiTek, whose main business is 8-inch wafer foundry, is running at full capacity and has signaled another price increase for 2H26, as the major foundries keep concentrating capital and capacity on 12-inch wafers and leading-edge nodes. A market long treated as mature and commoditized is tightening because supply is contracting while power semiconductor demand keeps rising. (11 Aug 2026) Source: 台積電與三星淡出8吋效應浮現　DB HiTek滿載、2H26再喊漲

Memory supply contracts spread to SanDisk, Nanya and CXMT

Long-term supply agreements, until now signed mainly with Samsung Electronics, SK Hynix and Micron, are spreading quickly to SanDisk, Nanya Technology and China's CXMT as global memory supply tightens further. Buyers locking multi-year contracts with second-tier suppliers indicates the shortage has passed the point where the three largest makers can cover it. (11 Aug 2026) Source: 記憶體進入先搶先贏　長約從三大廠燒向SanDisk、南亞科與長鑫

ChipMOS lifts capital spending above 25% of revenue

ChipMOS Technologies (8150 TT) chairman Cheng Shih-chieh said capital spending rises from about 20% of annual revenue historically to more than 25% this year and stays above that level in 2027, expanding memory back-end packaging and test capacity while preparing for AI ASIC, optical communications and silicon photonics work. A back-end supplier committing to two consecutive years of elevated investment is reading demand well past the current quarter. (11 Aug 2026) Source: 南茂樂觀下半年 今年資本支出增至營收占比25%