AI demand keeps chip cycle hot

The chip boom tied to artificial intelligence is spreading beyond processors and into the factories, memory plants and power systems that keep data centers expanding. (finance.yahoo.com) Taiwan Semiconductor Manufacturing Co. said on April 22 it plans an A13 process for production in 2029 and an N2U process for cheaper chips, while sticking with existing extreme-ultraviolet machines instead of ASML’s newer “high NA” tools that Reuters said cost about $400 million each. (finance.yahoo.com) TSMC also said packaging is becoming a bigger part of the performance race: by 2028, it expects to be able to combine 10 large compute chips with 20 stacks of high-bandwidth memory in one package, up from today’s designs such as Nvidia’s Vera Rubin with two compute chips and eight memory stacks. (finance.yahoo.com) That shift changes what “more AI capacity” means. It is no longer only about shrinking a single chip; it is also about fitting more chips and memory together, then supplying the tools and factory space to build them. (finance.yahoo.com) ASM International’s first-quarter results showed the equipment side of that buildout. The Dutch supplier reported revenue of €863 million for Q1 2026, up 16% year over year at constant currency, and said “AI-led demand accelerated further” as customers invested in long-term infrastructure capacity. (asm.com) ASM said logic and foundry customers led demand, gross margin reached 53.3%, adjusted operating margin hit a record 33.1%, and second-quarter revenue is projected at €980 million plus or minus 5%, with the second half expected to be stronger than the first. (asm.com) Memory makers are sending the same signal. SK Hynix reported a record quarterly profit on April 23, said demand for high-bandwidth memory used with AI chips will exceed manufacturing capacity, and told investors that customer requests for HBM over the next three years already exceed its output. (usnews.com) SK Hynix said capital spending in 2026 will rise significantly from 30.2 trillion won in 2025, with money going to the Yongin cluster, the M15X fab ramp and equipment purchases; in March, the company said it would buy 11.95 trillion won of ASML lithography tools by 2027. (usnews.com) The spending is reaching the physical plant around the chips too. Vertiv on April 22 reported first-quarter sales of $2.65 billion, up 30% from a year earlier, and raised its 2026 outlook as demand for power and cooling systems for data centers stayed strong. (investors.vertiv.com) Eaton said on April 8 it would invest more than $30 million in a 370,000-square-foot Nebraska plant to make medium-voltage switchgear for utilities and data centers, with production expected in the first half of 2027 and more than 200 jobs added. (eaton.com) The result is a chip cycle that looks less like a short product rush and more like an industrial expansion plan: foundries are extending roadmaps, toolmakers are booking AI orders, memory suppliers are adding capacity, and data-center builders are ordering the electrical gear to power it. (finance.yahoo.com)