Hello world, it’s Monday, August 17th.
SMIC beat Q2 earnings expectations and is eyeing capacity expansion as CEO Zhao Haijun says AI-driven demand is far exceeding previous forecasts. Nvidia guaranteed 4.25 of the 8 IT-GW at OpenAI’s Ohio campus and is investing $1.5 billion in SB Energy, and Anthropic is in early IPO roadshow meetings with backers floating a valuation above $2 trillion.
Let’s get into it. — Austin & Vik
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China’s Chip Makers Claim Pricing Power as Domestic Stack Matures
SMIC beat second-quarter earnings expectations and is now eyeing capacity expansion, with CEO Zhao Haijun telling analysts on Friday that AI-driven demand is “far exceeding” previous expectations and that the company may add equipment at existing sites. The foundry’s China revenue alone was up 22%, and it is signaling further wafer price hikes as AI peripheral chip orders swamp mature-node supply. Hua Hong is reading the same demand signal, with Morningstar raising fair value estimates on both Chinese foundries on the improved pricing outlook.
CXMT, the Chinese DRAM maker, crossed $500 billion in market capitalization to surpass Tencent and become China’s most valuable publicly traded company. The company rejected Apple’s request for DRAM price cuts, a notable reversal for a supplier that Apple was reportedly testing for iPhones and MacBooks amid an AI-driven memory shortage. YMTC, meanwhile, has overtaken Kioxia for third place in global NAND shipments. U.S. Commerce Secretary Howard Lutnick publicly opposed Apple sourcing memory from CXMT, adding a policy dimension to what had otherwise looked like a straightforward supplier negotiation.
Behind the demand surge:
Hygon revenue rose 67% and Sugon profit 34% in the latest quarter as domestic AI computing infrastructure spending accelerated.
CXMT DDR5 modules have now hit 9,000 MT/s speeds and CL28 timings at DDR5-6000, two performance milestones that narrow the gap with SK Hynix and Samsung.
A U.S. federal judge dismissed a lawsuit claiming Micron had spread false statements to damage YMTC’s business.
Austin: CXMT is doing great, but you can’t quite compare them apples-to-apples with the Big 3 DRAM vendors. I explain why in last week’s Chipstrat article.
Vik: While memory may not be an investor favorite at the moment, remember that memory still underpins the amount of AI compute we can deploy. It’s not always HBM in the era of agentic AI and the importance of CPUs. Google is doing CXL too, and a lot of memory pooling there is not on cutting edge memory. Memory continues to be important.
Nvidia Guarantees 4.25 IT-GW at OpenAI’s Ohio Campus, Invests $1.5B in SB Energy
Nvidia has secured land, power and shell capacity at SB Energy’s PORTS-Pike Technology Campus in Pike County, Ohio, and the site will exclusively host Nvidia compute. Nvidia’s credit support covers an initial 4.25 IT-GW, with an option to take the remaining 3.75 IT-GW. OpenAI is the customer for all 8 IT-GW on a 20-year lease, and SB Energy will build, own and operate the data center. That puts a shape on last week’s reporting that Nvidia had cut its guarantee by more than 50%. Nvidia is backstopping 4.25 of 8 IT-GW now and holds an option on the other 3.75.
Nvidia is also investing $1.5 billion in SB Energy, joining SoftBank Group and OpenAI as investors. Reporting last week had put that at up to $3 billion. SB Energy and SoftBank will build at least 10 GW of new generation, which the companies say yields 8 IT-GW of AI factory capacity, a 2 GW gap between what is generated and what reaches the racks. They will also fund at least $4.2 billion of new regional grid infrastructure through a partnership with AEP Ohio the companies describe as designed to protect ratepayers. The campus reindustrializes the decommissioned Portsmouth Gaseous Diffusion Plant, spans private and federal land, and is being developed with AEP Ohio, the Department of Energy and the Department of Commerce. Capacity comes online in phases beginning in 2028.
Jensen Huang put land, power and shell at the center of the announcement, saying they “have become vital in the age of AI.” He described the arrangement as “securing long-lived infrastructure” for Nvidia compute so OpenAI can deploy AI factories “that can be upgraded repeatedly with each new generation.” The lease runs 20 years. Nvidia’s product cadence is annual.
In related news:
Goldman Sachs and JP Morgan advised SB Energy on the deal, and Morgan Stanley advised Nvidia. Goldman had already landed a role and opened talks with investors to syndicate the $100 billion financing package.
OpenAI matched SB Energy’s $40 million community benefits fund with an incremental $40 million, taking the anchor commitment to $80 million for affordable energy, workforce development and local economic development.
Nvidia’s 13F filings have drawn fresh scrutiny as the guarantee changes surface; The Next Web notes the filing reveals details of Nvidia’s broader stakes in AI ventures.
Austin: Nvidia is ultimately backing the data center itself. Savvy. If OpenAI falters — no big deal, just turn and rent the datacenter and Nvidia chips to someone else. And Elon recently showed us how profitably and quickly one can lease out an existing big Nvidia cluster.
Vik: It is becoming increasingly hard to build out ultra large scale AI campuses due to power and land availability. Securing smaller sites and connecting them with scale-across will become important. As Jensen says, land and power will drive AI into the future.
Anthropic Courts IPO Investors With $2 Trillion Valuation Case
Anthropic has begun early IPO roadshow meetings with prospective investors, with backers floating a valuation above $2 trillion built on a Reuters-reported forecast of $190 to $200 billion in 2028 revenue. That number is doing a lot of heavy lifting. To make it feel less like arithmetic and more like a plan, the company is simultaneously assembling the operational infrastructure the projection requires, signing long-term compute contracts and shopping for inference speed.
Anthropic is in advanced talks to acquire Decart, an inference-acceleration startup, for roughly $6 billion, which would rank as its largest acquisition to date. On the compute side, the company has locked in a 20-year supply agreement with bitcoin miner Riot Platforms worth approximately $9 billion, an arrangement that converts Riot’s power assets into dedicated AI infrastructure. Projected Q2 revenue sits at $10.9 billion, a figure backers are presenting as evidence the 2028 target has a credible trajectory. No IPO date has been announced, but the early investor meetings confirm the process is no longer theoretical.
On an adjacent front:
Riot Platforms shares have drawn fresh analyst attention as the Anthropic deal repositions the bitcoin miner as an AI infrastructure provider.
Austin: Anthropic and OpenAI IPOs will be great for the markets; it’ll give us the insight we need into the world’s fastest growing companies. These are ultimately the end buyers of all the AI infra… transparency into their businesses will be much appreciated.
NAND Supply Gap Widens as Phison, YMTC, and Kioxia Reshape Market
Phison CEO Khein-Seng Pua has warned that NAND supply won’t catch demand until 2030, a four-year shortfall that the controller maker says will keep SSD prices structurally elevated. The forecast lands as the market’s third-place ranking quietly reshuffled: YMTC has overtaken Kioxia in NAND shipments, pushing the Chinese manufacturer past its Japanese rival for the first time. Kioxia, for its part, is generating its own headlines through a buyback program that Bloomberg reports has propelled Japan’s corporate stock purchases to a record, with SK Hynix emerging as Kioxia’s largest shareholder as a result, though analysts note a full takeover faces significant barriers.
Phison’s warning, if accurate, means buyers have roughly four years of constrained supply ahead, with no near-term capacity wave large enough to close the gap. YMTC’s rise in shipments reflects how quickly Chinese producers are scaling despite ongoing export controls, adding a geopolitical wrinkle to an already tight supply picture. Kioxia and SanDisk offered a glimpse of where capacity is headed, demonstrating a chip that could enable the world’s first 1 PB SSD.
On an adjacent front:
Kioxia also demonstrated a PCIe Gen 6 SSD hitting 10 million IOPS, a benchmark that frames where enterprise storage performance is heading.
SK Hynix’s position as Kioxia’s biggest shareholder stops well short of operational control, given cross-shareholding structures among existing investors.
Vik: NAND is critical infrastructure in the age of AI, with early developments into HBF underway, and Kioxia developing high-IOPS XL-flash. The NAND performance tiers will fragment significantly between performance and storage tiers and everything in-between.
Sector Watch
Compute & Edge
OpenAI launches an Ultrafast inference mode for GPT-5.6 Sol powered by Cerebras wafer-scale chips, delivering 14x speed improvement — a live commercial deployment outside Nvidia’s GPU stack. (Cerebras)
Google is reportedly in talks with AMD to co-design its next-generation TPU, potentially integrating on-package CPU cores for reinforcement-learning workloads — a significant departure from Google’s in-house-only ASIC strategy. (Tom’s Hardware)
Biren Technology projects up to a 22-fold revenue surge in first-half 2026, marking a breakout for China’s domestic AI accelerator ecosystem. (South China Morning Post)
Foundry & Packaging
CK Solution wins a 30.8 billion won construction order for Samsung Electronics’ Pyeongtaek P5 fab expansion. (The Elec)
TSMC Arizona doubles profit to NT$36.1 billion in H1 2026, underscoring the financial momentum of its US fab ramp. (scanx.trade)
HCL-Foxconn semiconductor JV appoints Shikhar Malhotra as chairman to lead its India OSAT facility push. (Bisinfotech)
Data Centers & Power
Core Scientific closes $444 million acquisition of Polaris Design Systems, targeting a 1.5 GW AI compute campus in Muskogee, Oklahoma — its largest power footprint to date. (Core Scientific)
SK Innovation and TerraPower sign an agreement to explore deployment of TerraPower’s Natrium small modular reactor in South Korea, linking semiconductor-sector energy demand to next-generation nuclear. (The Elec)
OpenAI is forced to delay its $20 billion Georgia data center plan amid power and permitting constraints. (E&E News by POLITICO)
Memory
Jeju Semiconductor reports Q2 operating profit surging 2,745% year-on-year, signaling a sharp memory market recovery for specialty DRAM suppliers. (The Elec)
Soulbrain posts 46 billion won Q2 operating profit and advances its Texas fab build-out to serve advanced memory customers. (The Elec)
Intel signals a renewed push into memory, with reporting detailing a strategic crossroads as the company eyes re-entry into the segment.
Optics & Networking
Quanta Computer and Quantinuum sign a collaborative development agreement to build industrial quantum computing infrastructure. (EE News Europe)
Lynk and Omnispace complete their merger and rebrand as Elveo Mobile, targeting 320 LEO satellites for direct-to-device services. (Light Reading)
Naver invests in US startup Panthalassa, which is developing wave-powered floating AI data center platforms. (The Elec)
Equipment & Materials
Lam Research plans to invest more than $3 billion over five years to expand its global R&D laboratory network as semiconductor fab capacity scales. (EE News Europe)
Gigatech signs a 2.3 billion won contract to supply nanoimprint lithography equipment to a global electronics company. (The Elec)
Supermicro plans to build its first India server manufacturing plant in Chennai with an investment of approximately 477 crore rupees. (Dealroom)
Policy & Trade
Ingenic Semiconductor launches a Hong Kong IPO targeting up to HK$3.22 billion, joining a wave of mainland Chinese chipmakers tapping Hong Kong capital markets. (SCMP)
Guangdong province deepens its partnership with Alibaba to accelerate AI and semiconductor industry development across the region. (SCMP)
Alibaba sells its gaming arm for $1.5 billion, redirecting capital toward its AI and semiconductor investment priorities. (Bloomberg.com)