Chips & Wafers Data Predictions, Packaging Perspectives, Google Q2 & AEHR Reemergence

Chips & Wafers Weekly Update

Very busy week in semi’s. Let’s get going.

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Chips & Wafers Data Predictions - July Edition

Earlier this week, we shipped our monthly Chips & Wafers Data Book to our customers.

Source: Chips & Wafers Data Book

When we founded Chips & Wafers earlier this year we had a simple goal in mind - how can we leverage real-time targeted data to help investors and semiconductor executives in their decision making process?

What we do, essentially, is collect thousands of unique monthly data points to build a comprehensive map of the semiconductor industry, and identify trends before they hit the market and news cycles. So that our customers can see the runway before the fog clears.

This past month we made 2 very bold predictions based on what we were seeing in the data. Both these points were confirmed in many ways this past week as earnings started rolling out.

Our customers saw our predictions and were able to position themselves accordingly. That’s what we strive for, and we’re glad to see our customers benefitting from our insights.

We will include these two insights later in this post, exclusively for our paid subscribers.

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Packaging Perspectives

This week, Q2 results from Advanced Packaging leaders ASMPT and BESI highlighted different narratives. While both companies are central to the increasingly important Advanced Packaging ecosystem, their momentum differ markedly.

We put out a dedicated piece on the nuances between the companies, and their competitor Kulicke & Soffa. Be sure to check it out.

Here is a summary of our views:

ASMPT is undergoing a strategic transformation. Advanced Packaging now accounts for nearly 40% of its revenue - double that of early 2022. Simultaneously, its end markets have shifted, with high-performance computing and AI now driving a third of sales, up from just 10%. As the company evolves from a mainstream player to an AI/HPC enabler, investors may need to rethink its valuation profile.

BESI, by contrast, appears to be losing some steam. Despite leading in high-end Hybrid Bonding with marquee customers like Apple and TSMC, Q2 orders fell -11% short of expectations and -31% YoY. Management flagged a rebound in Q3, but only relative to a weak Q2. BESI’s order growth has now lagged ASMPT for four consecutive quarters, raising questions about competitive momentum ahead.

KLIC, meanwhile, may finally be turning a corner. Both BESI and ASMPT noted signs of a recovery in mainstream packaging, particularly wire bonding - a KLIC stronghold. With post-COVID digestion behind us, KLIC could benefit from renewed capacity expansion across consumer and AI-related markets. Worth watching.

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Google Q2

The AI story lives on.

Source: Fiscal.ai

GOOG 0.00%↑ came out with stellar results, highlighted by ATH in Cloud Revenue, and no less importantly, Sundar put this in the press release:

“With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately $85 billion and are excited by the opportunity ahead.”

CapEx upgrades are always a good sign for the semi ecosystem, and Google Data Center supply chain partners are sure to benefit from this $10 billion upgrade.

Source: Chips & Wafers, Company Financials

Moreover, Anat Ashkenazi the CFO said the following in her prepared remarks:

“In Cloud, as I mentioned, the demand for our products is high as evidenced by the continued revenue growth and the cloud backlog of $106 billion.
While we have been working hard to increase capacity and have improved the pace of server deployment, we expect to remain in a tight demand supply environment going into 2026”

From a narrative perspective, it seems the market is debating whether the AI investments are a “Win at all costs” war, a-la Mark Zuckerberg poaching crusades, or rather fueled by true underlying demand that currently exists.

Seems Google is trying to prove the latter while the market is reacting to the former.

Regardless, for now, this is excellent news for the semi ecosystem and we should continue to see the trickle-down effect throughout the remainder of the year, especially to those in the Alphabet data center supply chain.

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AEHR Reemergence

You gotta give it up for AEHR 0.00%↑.

AEHR was one of the most promising companies in the Silicon Carbide gold rush era of 2023, on track to be one of the key suppliers of Wafer Level Burn-in (WLBI) tools for the auto SiC modules.

We all know what happened to Silicon Carbide.

AEHR took a massive hit and has been trying to reposition itself ever since.

Earlier this week they put out a press release highlighting a recent order from a Hyperscaler for eight (!) of their Sonoma AI accelerator burn-in testing platforms.

Naturally, the stock responded accordingly and is up +85% this month.

Source: Google Finance

AEHR is well positioned to win orders here, when there aren’t many players doing burn-in testing tools and especially none in the US.

There could be some competitive headwinds down the road with potential new market entrants and continued EV pushouts, but we are rooting for AEHR, and we hope to see them succeed.

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Here we will move on to our (accurate) predictions we made deduced from our Chips & Wafers data for our paid subscribers. Want to know how we got ahead of the curve? Subscribe to find out.

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