Schulz Duggan
AI Supply-Chain Research, Optics/Memory/Macro, Original Asian/US Filings & Pricing
TSMC gains leverage in custom HBM because Nvidia reportedly standardized its NVHBM base die on TSMC's 3nm process, even for Samsung's stacks. Seoul Economic Daily reports Samsung accepted while retaining its own 4nm base dies for standard HBM4/HBM4E and AMD custom HBM, and validating a fallback for Nvidia. That weakens Samsung's all-in-one memory, foundry, packaging and photonics pitch to Nvidia, though its bundle can still serve other customers. x.com
TSMC's 2nm ramp did not prevent a revenue beat with gross margin in the upper half of guidance. Sales beat the top of guidance by 2%, the widest beat in five quarters; 2nm rose from 3% to 8% of wafer revenue as gross margin slipped 1.3 points to 66.4%. Operating margin was 58.7%, above guidance. Buy, $510 target. The release did not size 2nm or overseas-fab dilution, and Q4 guidance is pending. x.com x.com
Nvidia's proposed common NVHBM base die would make Micron, SK hynix and Samsung more interchangeable, weakening their pricing power. Seoul Economic Daily reports Nvidia wants all three to fabricate it at TSMC; Samsung reportedly agreed. Standardization would ease validation and order shifts. The risk lessens if SK hynix or Micron retain their own logic or NVHBM stays a small share of Nvidia's purchases. x.com
Higher HBM stack requirements favor Samsung Electronics shares, even as the broader semiconductor industry suffers and DRAM is in dire straits. Daishin Securities says plans for 4-high and 6-high HBM in low-end inference appear shelved, while Nvidia's 8-high Rubin option appears dropped amid base-die supply constraints and customers' preference for bandwidth. x.com
TSMC may lose pricing power as performance gains shift from shrinking transistors to stacking, interconnects and optics, while logic folding could make older processes competitive. Despite strong leading-edge demand, investors may overestimate the profit share its node leadership can retain. Its cautious expansion and past reluctance toward advanced packaging suggest a risk-averse culture that protects returns but could leave it late to disruptive technologies and key customers. x.com
Nvidia's request to have TSMC make 3nm base dies for custom NVHBM makes regular investing in TSMC look hard to go wrong. Nvidia has asked Samsung, SK hynix and Micron to route the work to TSMC; Samsung has accepted. For a large addition, waiting until the major semiconductor companies' earnings are mostly out is safer. x.com
Samsung Electronics' HBM4 pricing looks set to lead the memory Big Three, helping make next year's earnings phenomenal. Samsung memory EVP Jaejune Kim said next year's HBM supply is sold out at target prices, with more customer requests coming. Korean media had reported quotes in the mid-to-high $4/Gb range; Nvidia appears to have accepted Samsung's asking price. Samsung-equipped Rubin variants should sell as separate premium-priced SKUs against SK hynix or Micron versions. x.com
TSMC's conservative delay in high-NA adoption will be its downfall as Intel's stitching advances sooner. TSMC's larger-mask alternative requires changing the entire stage and is projected for production by 2033; Intel's stitching is substantially derisked and could be ready for volume production in 2027 at the earliest. TSMC's CoWoS and CoPoS shortcomings add to the concern. x.com
More memory CapEx may yield proportionally fewer bits as HBM consumes more wafer capacity, supporting SK hynix and Samsung's pricing. Both reported double-digit quarterly DRAM and NAND price gains; Samsung targets 60-70% of mid- to long-term capacity under LTAs. SK hynix has the stronger execution record, but Samsung could benefit enormously from conventional memory without winning HBM4. If trends persist, normalized margins could rise, though memory remains cyclical. x.com
HBM suppliers could earn more revenue and higher margins as yields improve at higher pin speeds. Nvidia wants more HBM and needs its suppliers to improve yield; the reported pin-speed reduction was most likely a yield issue, not evidence that SK hynix and Micron failed. x.com
TSMC's shifting cost structure is pressuring gross margin despite revenue and EPS beats. TSMC reported Q3 gross margin of 66.4%, down from 67.7% in Q2, and another decline is guided next quarter; Arizona is expected to drag gross margin by 2-4%. TSMC is checking AI data-center progress as it plans wafer capacity, while reiterating long-term AI demand strength. Price hikes may be next, given management's commitment to protect shareholder interests. x.com x.com
Samsung Electronics is due to catch up with Micron and SK Hynix. Its in-house base die gives it the best HBM4/4e, so it should gain more HBM share than expected, and HBM should be next year's big surprise as pricing rises faster than conventional memory. Its leading-edge foundry, including Taylor in the US, matters with TSMC sold out. The strike that drove its underperformance is over, its other businesses are irrelevant to the bottom line next to memory, and it is far cheaper than peers. x.com
