Chipmakers Extend 2026 Boom With Rationed Supply and Long-Term Contracts
Updated
Updated · CNBC · Jul 16
Chipmakers Extend 2026 Boom With Rationed Supply and Long-Term Contracts
3 articles · Updated · CNBC · Jul 16
Summary
Semiconductor component stocks are still climbing despite recent pullbacks, with investors increasingly treating the latest drop as a bottoming phase rather than the start of a classic bust.
Rationed chip supply and unusually long-term contracts for memory and equipment makers such as Micron and Applied Materials are underpinning earnings in a way the sector historically lacked.
Western Digital has surged more than 180% this year, yet skepticism remains embedded in valuations—SK Hynix trades at about 6 times next year's earnings as many investors still expect the cycle to crack.
That tension between strong fundamentals and entrenched boom-bust fears is helping drive sharp volatility, while short sellers and retail traders amplify swings even as supply stays tight.
The view aligns with broader AI-chip optimism after TSMC said demand could outstrip supply for another 3 years, reinforcing bets that shortages may spread from memory to CPUs.