Abstracts of TSMC, ASML Earnings Notes TSMC (TSM) D/G to Hold, Taking the High Road in AI Cycle * Earnings & Guide: While TSMC’s Q2 earnings were inline (margin slightly below bulls), the company raised its full-year rev and capex. * The key highlight was taking the high road in margin management (by not to be aggressive in pricing), geo-expansion (by further capex investment in Arizona) and backend flexibility (by supporting customers’ backend at EMIB). * As said in our preview note on July 7, TSMC’s capex acceleration began in 2025, 1.5–2 years after the AI cycle took off, implying that share loss or demand overflow to competitors; that said, to catch up in capex in 2026-2027; together with prudent pricing, TSMC could be one of the few AI semi companies that won’t see margin expansion in coming quarters. This will lead to lower valuation multiple. ASML Earnings, Guidance Raised * Q2: ASML delivered a strong beat, with Q2 revenue of €9.3 billion and a 54% gross margin, exceeding guidance. * Guidance Raised: The company raised its full-year 2026 revenue outlook to €43–45 billion (from the previous €36–40 billion range). * Growth Drivers: Robust demand from both logic and memory customers. * Capacity Expansion: ASML announced plans to increase capacity by ~30% annually for both its EUV and DUV immersion systems through 2027, with potential further expansion in 2028. Stay positive #AI# #ASML# #TSM# #TSMC#