On August 5, 2026, the divergence in the semiconductor industry became even more pronounced. TSMC, the leading foundry, reported July revenue that, buoyed by strong orders for AI chips and flagship smartphone processors, surged to a record high for the same period in its history. At the same time, Japan's major automotive chipmaker Renesas Electronics announced a 20% cut in capacity utilization to cope with automotive MCU inventory backlog. This stark contrast of "one hot, one cold" outlines the core theme of the global semiconductor market in the second half of 2026: AI-driven advanced processes and mature processes, consumer and automotive sectors are experiencing a significant divergence cycle.
TSMC July revenue beats expectations; AI remains strongest engine
According to TSMC official data, consolidated revenue for July 2026 was approximately NT$345 billion, up 36.8% year-on-year and more than 10% from the previous month, setting a record for the same period. Analysts attribute this performance to two major drivers: first, continued order increases from AI accelerator clients such as NVIDIA and AMD for 5nm/4nm and 3nm process families; second, mobile chip clients such as Apple and Qualcomm entering peak new-device stocking season, pushing advanced process capacity utilization to near full.
TSMC management previously stated at an earnings conference that AI-related revenue is expected to account for more than 30% of full-year 2026 revenue, while advanced packaging CoWoS capacity will double again this year. Judging from current order visibility, AI chip demand in the second half has not weakened but has been further strengthened by upward revisions in capital expenditure by large cloud service providers. Morgan Stanley's latest report also points out that the global AI chip market will reach US$120 billion in 2026, growing over 45% year-on-year, making it the "brightest star" in the semiconductor industry.
Automotive chip "chill" persists; Renesas cuts output by 20%
In contrast to the hot AI chip market, the automotive semiconductor market remains clouded by inventory adjustment. According to Nikkei report today, Renesas Electronics announced it will lower capacity utilization on 8-inch wafer lines at its Kofu and Naka plants from 80% to 60%, and suspend shipments of some automotive MCUs and general-purpose analog chips to help customers digest inventory. The president of Renesas said bluntly at the earnings meeting: "Automotive chip inventory destocking is slower than expected, and it may not return to healthy levels until the fourth quarter of 2026."
This news is not isolated. Recently, European automotive chip makers such as Infineon and STMicroelectronics have also cut quarterly revenue guidance, mainly because global auto sales growth has slowed, and the increase in chips per vehicle from higher EV penetration has been offset by reduced production of traditional combustion-engine vehicles. In addition, the rising localization of Chinese automakers' supply chains is squeezing the market share of international IDM makers. Automotive chip prices remain under pressure in the spot market; some MCU models are quoted 30% below their 2025 highs.
Memory and power chips diverge; industry enters "fine rebalancing"
Apart from logic chips, the memory chip market continues its "moderate recovery" pace. According to TrendForce's latest quotes released today, contract prices for mainstream DRAM (DDR5 16Gb) in early August rose another 2%-4% month-on-month, while NAND Flash prices consolidated at high levels. Data center server orders remain the main demand support, and the replacement cycle of AI devices (such as AI PCs and AI phones) is also driving demand for low-power memory.
In power semiconductors, although devices such as IGBTs and SiC still have long-term growth logic in new-energy vehicles, short-term capacity released by second- and third-tier manufacturers has led to slight declines in general-purpose MOSFET prices. Overall, the semiconductor market is shifting from the "overall shortage" or "overall oversupply" of the past two years to "structural imbalance" — the future of each sub-segment will depend more on whether it can capture the next growth pole such as AI and new energy.
Thailand's semiconductor supply chain sees "excess opportunity"
Against the backdrop of global supply chain restructuring and reallocation of automotive chip orders, Southeast Asia, especially Thailand, is rising in semiconductor industry status. The Thailand Board of Investment (BOI) recently announced it will expand tax incentives for IC design, front-end wafer manufacturing, and advanced packaging, with corporate income tax exemptions of up to 13 years. This is seen as a key step in Thailand's transformation from a "back-end packaging and testing base" to a "regional semiconductor manufacturing hub."
Industry insiders point out that U.S. IDM makers, in order to diversify geopolitical risks, are transferring some mature-process automotive-grade chip orders to outsourced assembly and test providers in Malaysia, Thailand, and other places. Thailand has advantages in automotive assembly clusters, and in recent years, multiple foreign packaging projects have landed. Combined with the government's "3030 policy" (to make EVs account for 30% of local vehicle production by 2030), local manufacturing of automotive-grade chips is expected to become a breakthrough for Thailand's semiconductor industry. For investors, Thai packaging/testing-related stocks and power electronics equipment companies listed on the SET are likely to benefit from this regionalization dividend.
Conclusion: Go with the trend, seek "certainty" amid divergence
Semiconductor market in the second half of 2026 is destined not to be a broadly rising tide. TSMC's strong momentum and Renesas's production cuts reveal the very different prosperity phases of the AI supply chain and traditional automotive ICs. For investors, priority should be given to targets with AI concepts, advanced-process leadership, or high-dividend defensive characteristics. At the same time, closely track the inflection point of automotive chip inventory destocking; once inventory bottoms out, the "coldest" sector today may also see the fastest recovery.
At the same time, opportunities brought by Thailand's semiconductor policy dividend and infrastructure upgrades cannot be ignored. As global foundry capacity remains tight, Thailand, as a key link in the ASEAN supply chain, is becoming the focus of the next wave of capital and capacity competition. Whether one can seize this "ice and fire" structural market will test precise judgment of industry cycle turning points and geographical distribution.
