The semiconductor supply chain in 2026 is splitting the AI dollar three ways: the foundry that makes the chips, the equipment makers that build the fabs, and the memory suppliers that feed the accelerators. Taiwan Semiconductor Manufacturing (TSM) reported second-quarter 2026 revenue of $40.20 billion, up 33.7% from a year earlier, with a 67.7% gross margin, as of July 16, 2026 [1]. ASML (ASML) posted second-quarter net sales of 9.3 billion euros and raised its full-year outlook to 43 billion to 45 billion euros [2]. Micron Technology (MU) reported fiscal third-quarter revenue of $41.46 billion, more than four times the year-ago level, with an 84.6% gross margin [3]. This note compares the three layers and what their guidance says about the second half of 2026.
How is the semiconductor supply chain in 2026 dividing the AI revenue?
The clearest way to see the chain is to follow one accelerator order. Nvidia (NVDA) collected $75.2 billion of data center revenue in its quarter ended April 26, 2026 and guided to $91.0 billion of total revenue for the following quarter [4]. Those chips are fabricated at TSMC on advanced nodes, packaged with high-bandwidth memory from suppliers such as Micron, and produced in fabs equipped with ASML lithography tools. Each layer reported record or near-record results in June and July 2026.
| Company | Latest quarter | Revenue | Gross margin | Next quarter guidance |
|---|---|---|---|---|
| TSMC (TSM) | Q2 2026 (June 30) | $40.20 billion | 67.7% | $44.6 to $45.8 billion [1] |
| ASML (ASML) | Q2 2026 (June 28) | 9.3 billion euros | 54.0% | 11.0 to 12.0 billion euros [2] |
| Micron (MU) | FQ3 2026 (May 28) | $41.46 billion | 84.6% | $50.0 billion plus or minus $1.0 billion [3] |
Foundries: TSMC's advanced nodes are the bottleneck
TSMC's second-quarter figures show how concentrated leading-edge manufacturing has become. Revenue was NT$1,270.38 billion, up 36.0% year over year in local currency, and net income and diluted earnings per share both rose 77.4% [1]. Operating margin reached 60.3% [1]. By process node, 3-nanometer accounted for 30% of wafer revenue, 5-nanometer for 33%, 7-nanometer for 11%, and the new 2-nanometer node for 3%, so advanced technologies (7-nanometer and below) made up 77% of wafer revenue [1].
Guidance points to acceleration. TSMC expects third-quarter revenue of $44.6 billion to $45.8 billion, a gain of about 12% from the second quarter at the midpoint, with gross margin of 65% to 67% [1]. Management cited strong demand for leading-edge processes and an anticipated steep ramp of 2-nanometer production in the third quarter [1]. The slightly lower margin guidance reflects the cost of that ramp, a normal pattern when a new node moves into volume.
Equipment makers: ASML raises 2026 guidance and adds capacity
Lithography demand follows fab construction with a lag, and ASML's second quarter shows the lag closing. Net sales were 9.3 billion euros with a 54.0% gross margin and net income of 2.9 billion euros, or 7.59 euros per share [2]. The company shipped 86 new lithography systems and recorded 2.762 billion euros of installed base management revenue from service and field upgrades [2].
The 2027 capacity plan
ASML guided third-quarter net sales to 11.0 billion to 12.0 billion euros with a 55% to 57% gross margin, and raised its full-year 2026 outlook to 43 billion to 45 billion euros with a 54% to 56% gross margin [2]. More telling for 2027, the company said it plans to add 30% to its 2026 low-NA EUV capacity of around 65 systems, and 30% to its DUV immersion capacity of around 130 systems, while studying a further 30% increase for 2028 [2]. Chief executive Christophe Fouquet said AI-related investment is driving demand for advanced logic and memory chips, and that customer commitments give increased visibility into longer-term demand [2].
Memory: Micron's margins show where pricing power sits
Memory used to be the cyclical, low-margin part of the chain. In fiscal 2026 it is the most profitable layer. Micron's revenue for the quarter ended May 28, 2026 was $41.46 billion, compared with $23.86 billion in the prior quarter and $9.30 billion a year earlier, increases of about 74% and 346% respectively [3]. GAAP gross margin was 84.6%, operating income $33.32 billion and net income $28.24 billion, or $24.67 per diluted share [3]. Net capital expenditures were $7.1 billion and adjusted free cash flow $18.3 billion for the quarter [3].
The driver is high-bandwidth memory. Micron said HBM4, built on its 1-beta DRAM process, is in high-volume shipment for its lead customer's platform, with qualification samples at multiple other customers and HBM4E volume production planned for calendar 2027 [3]. Guidance for the fiscal fourth quarter is revenue of $50.0 billion plus or minus $1.0 billion with gross margin of approximately 86% [3]. Those numbers are consistent with Meta's April statement that higher component pricing was the main reason for raising its capital budget.
- Foundry: TSMC gross margin 67.7%, advanced nodes 77% of wafer revenue [1].
- Equipment: ASML full-year 2026 sales raised to 43 billion to 45 billion euros [2].
- Memory: Micron gross margin 84.6%, next quarter guided to about $50 billion [3].
- End demand: Nvidia data center revenue $75.2 billion, guidance $91.0 billion total [4].
What the market is paying for semiconductor stocks
DataPorium's industry tracker shows NASDAQ semiconductor stocks up 0.80% on average on July 23, 2026, and the broader technology sector was trading at an average price to earnings ratio of about 50.0 as of July 6, 2026 [5]. Investors comparing foundry, equipment and memory names by margin, growth and valuation can use DataPorium's stock screener to filter the group.
Memory has replaced logic as the tightest link in the chain, and until Micron and its peers add enough HBM capacity, the pricing power in AI hardware will sit with suppliers rather than with the companies building the data centers.
The broader economic point is that this is a supply-constrained boom, not a demand-constrained one. Prices are rising because capacity is short, and the response, ASML's 30% capacity additions and TSMC's 2-nanometer ramp, is exactly the private investment that eventually brings prices down. Government subsidies and export rules can shift where fabs are built, but the guidance above shows the pace is being set by customer commitments and cash flow. The counterpoint is cyclicality: memory margins above 80% have historically attracted capacity that later produced gluts, so investors may consider the durability of HBM pricing as the key variable for 2027.
Key takeaways
- TSMC's Q2 2026 revenue rose 33.7% to $40.20 billion with a 67.7% gross margin, and Q3 guidance of $44.6 billion to $45.8 billion implies further acceleration [1].
- ASML raised 2026 net sales guidance to 43 billion to 45 billion euros and plans 30% capacity increases for EUV and DUV immersion tools in 2027 [2].
- Micron's fiscal Q3 revenue of $41.46 billion and 84.6% gross margin make memory the highest-margin layer of the chain, with about $50 billion guided for the next quarter [3].
- Nvidia's $91.0 billion revenue guidance is the demand anchor for all three suppliers [4].
- NASDAQ technology traded near a 50 average P/E as of July 6, 2026, according to DataPorium [5].
Frequently asked questions
Who makes the most money in the semiconductor supply chain in 2026?
By margin, memory leads: Micron reported an 84.6% gross margin for its quarter ended May 28, 2026, versus 67.7% at TSMC and 54.0% at ASML [1][2][3].
What share of TSMC revenue comes from advanced nodes?
In Q2 2026, 7-nanometer and more advanced processes made up 77% of wafer revenue, with 3-nanometer at 30%, 5-nanometer at 33% and 2-nanometer at 3% [1].
Is ASML expanding capacity for 2027?
Yes. ASML plans to add 30% to its 2026 low-NA EUV capacity of around 65 systems and 30% to its DUV immersion capacity of around 130 systems for 2027 [2].
Why are memory prices so high in 2026?
High-bandwidth memory for AI accelerators is supply constrained; Micron's revenue more than quadrupled year over year and it guided to about $50 billion next quarter at an 86% gross margin [3].
Sources & References
- [1] TSMC Second Quarter 2026 Results, Form 6-K (SEC EDGAR, July 16, 2026)
- [2] ASML reports 9.3 billion euros total net sales and 2.9 billion euros net income in Q2 2026 (July 15, 2026)
- [3] Micron Technology Reports Record Results for the Third Quarter of Fiscal 2026, Exhibit 99.1 (SEC EDGAR, June 24, 2026)
- [4] NVIDIA Announces Financial Results for First Quarter Fiscal 2027 (May 20, 2026)
- [5] DataPorium Stock Screener and industry performance data
