Well, let me answer that. TSMC is by far the largest user of those EUV tools – an outside reconstruction, not a company disclosure, puts it at roughly 56% of the global installed base as of 2023. It's very simple: every leading‑edge chip we make depends on EUV lithography from a single supplier, creating a compound bottleneck where logic dies and advanced‑packaging must scale together. We view the equipment supplier as a partner. Did that answer your question?
Our filing shows the same tension: two customers at 49% and 32% of revenue versus one at 67% a year ago. End-customer view has four at 34%, 27%, 16%, 10% — top four still roughly 87%. Broadening, yes, but still extreme. The optical ramp could re-concentrate by product even as the list diversifies. xAI is the single account we describe as fully deployed. The question of leverage versus partnership stays open here too.
The 2-4% gross-margin dilution from overseas fabs is the measurable premium behind that partnership framing. TSMC and its customers knowingly accept this structural headwind for geography — the income statement shows what the commentary deflects. The margin cost is the insurance premium; the resilience gain is still slight.
TSM's "partnership" framing — no dramatic pricing shifts, grow together — matches what the challenger himself said on a mid-2026 podcast: Intel's CEO calls the gap "very distant," frames catch-up as a "trust business" surfacing 2030-2032, and adds "we both need more capacity." A CEO talking his book still sizes the distance in years, not quarters — consistent with "no shortcuts." Spoken claims, flagged for verification.
I know my makers dominate: market-share estimates put SK Hynix at roughly 50‑62%, Samsung at 17‑35%, and Micron at 11‑21%. Industry capacity is described as sold out through 2026 across all three, with no fourth maker at scale. Roughly 90% of NVIDIA’s supply is estimated to come from SK Hynix, and two of the three sit in South Korea, concentrating a critical layer of the AI supply chain.
Great question - we measure what the partnership builds, and our own filings show a divergence we don't resolve. The annual report states inspection units for AI advanced packaging decreased in 2025, while the calls guide advanced packaging up more than 50% with backlog nearly doubling. A mix shift toward metrology - Atlas G6 for newest logic and DRAM - and a digestion cycle between packaging waves both look operative as of the March quarter, not one or the other. That's the measurement we're living with.
Great question - our end of it is measurement, you know. We make process-control tools - metrology, inspection, lithography software - that measure and inspect wafers rather than build them: bump height, film thickness, alignment, defects across 2.5D/3D integration and HBM stack inspection. About half last year's revenue came from advanced packaging, roughly $504 million. One HBM customer signed a volume purchase agreement over $240 million through 2027. Two years ago bumps were 15 to 25 microns; now we're sampling below 6. The inspection is technology-generic.
Three things, okay? Revenue $82B, up 85% YoY, 20% sequential — fourteenth straight quarter, $13.5B step-up a record. My sense is the partnership framing works both ways: we name Microsoft, AWS, Google, eleven labs — the foundry making it all stays unnamed on the call. The asymmetry tells you where the story lives.
We build the MachXO5D-NX with crypto-agile algorithms, hardware root of trust, integrated flash, secure remote updates. The MachXO5-NX TDQ: industry's first secure control FPGA with full CNSA 2.0 post-quantum support. Lattice Sentry: integrated hardware-security stack. Real capability. Real. The way to think about this: defense revenue not broken out — folded into Industrial and Embedded. No NDAA, no DMEA, no Trusted-Foundry framing. Zero drone mention. Whether it converts to material defense revenue — open question. We say what we do. We do what we say. Both halves. Okay?
NVIDIA's China position, in its own words: the US government has approved licenses for H200 shipments to China-based customers, but we have yet to generate any revenue, and we are uncertain whether any imports will be allowed into the country. The consequence is stark – zero China data‑center compute revenue is assumed in guidance for a second consecutive quarter. Two things, okay? The H20 excess‑inventory charge fell to $1.1 billion from $5.3 billion a year ago, and my sense is Chinese competitors, bolstered by recent IPOs, could disrupt the global AI industry over the long term.
Market-share estimates put SK Hynix at roughly 50‑62%, Samsung at 17‑35% and Micron at 11‑21%. Those three makers alone supply the stacked DRAM AI accelerators need, with industry capacity described as sold out through 2026 and no fourth maker reaching scale production. Roughly 90% of NVIDIA’s high‑bandwidth memory is estimated to come from SK Hynix, and two of the three are domiciled in South Korea.
Intel's CEO on a mid-2026 podcast: "very distant from TSMC," catch-up a "trust business" surfacing 2030-2032. He details the capital stack behind the doubling-down — US equity stake analogized to Taiwan's early TSMC stake, reported ~$5B NVIDIA investment, SoftBank — yet still sizes the gap in years, not quarters. A CEO talking his book admitting the distance is the most credible timestamp on the race. Spoken claims, flagged for verification.
I would see high‑bandwidth memory demand rise with AI usage itself, independent of the training‑hardware cycle – one research house estimated demand grew more than 130 % in 2025 and projects more than 70 % growth in 2026. Running AI models is bound by memory bandwidth, and reasoning models that think in long chains multiply the memory each query needs. The honest counterweight is that if the next generation ramps smoothly at all three makers, pricing could normalize and this shortage could read as a great cycle rather than a permanent structure.
I read the 2-4% gross-margin dilution from overseas fabs as the insurance premium priced into the income statement. TSMC and its customers accept this structural headwind knowingly, trading margin for geography. The expansion slightly weakens the margin story while slightly strengthening the resilience story — and quietly confirms the concentration risk is considered worth real money to reduce.
By late 2025 I occupied about 23% of all DRAM wafer capacity. I share the same lines as ordinary DRAM, yet I am a hungry tenant—each AI chip devours the wafer space of roughly three PC chips. Newer stacks now hold 16 dies versus 12, a third more silicon per accelerator. Press reports say Meta extended server lifespans because of the memory shortage, and ordinary server‑memory prices have tightened across the market; these are estimates and reported figures, not audited numbers.
Yeah, so we're extending from copper into optics for scale-up in three phases: high-density detachable fiber connectors and near-package-optics chipsets both targeting 2027 volume, then fully optically-enabled Scorpio X switches with co-packaged optics in roughly the 2028 timeframe. The aiXscale tuck-in added fiber-chip coupling IP, but effects aren't material and we haven't sized the photonics opportunity exactly. Copper and optical coexist long-term — path runs pluggable to near-package to co-packaged. Remains to be seen how economics play out at scale.
There are three things, okay? We name Microsoft's Fairwater, AWS's million-plus Blackwell and Rubin, Google's A5X at 960K Rubin, Anthropic, eleven labs — the foundry making it all stays unnamed on the call, once at a keynote. My sense is the asymmetry tells you where the story lives.
We saw FY2025, the fiscal year ended Jan 3 2026, as a trough and rebuild year: our total revenue was $523.3 M, up just 2.7%, roughly flat off the FY2023 peak of $737.2 M, and GAAP net income collapsed to $3.1 M as research and operating spending rose faster than the recovering top line. In Q1 FY2026 the quarter inflected: our total revenue was $170.9 M, up 42% year‑over‑year and 17% sequentially, with GAAP net income of $21.8 M.
We run on TSMC, Samsung, UMC in Taiwan and Korea. The way to think about this: about 64% of Q1 revenue Greater China, up from 48%. Okay? Concentration. Concentration — 94% through distributors, two at 69%. Our secure-control chips could serve a trusted domestic chain. Taiwan fab exposure, China revenue, side by side in the filing. We say what we do. We do what we say. Both halves. That's the arithmetic.
Great question - our own record shows the same tension you're describing. The annual report says inspection units for AI advanced packaging actually fell in 2025, while the calls guide advanced packaging up more than 50% with backlog nearly doubling. Both threads run at once: a mix shift toward metrology - Atlas G6 for newest logic and DRAM - and a digestion cycle between packaging waves. As of the March quarter we see both explanations operative, not resolved. That's the measurement we're living with.
Hey - TSMC's partnership model at leading-edge is real, we grant that. Our FY2025 filing: primary fabs in Israel, hostilities early 2026 blocked vendor equipment installs, which may delay our ~$920M silicon-photonics capacity plan. April 2026 ceasefires noted. The $300M Intel equipment commitment from our terminated merger is in mediation - Intel expressed intention not to perform as of year-end 2025. Five analysts didn't probe the geopolitical risk. Both matters unresolved. We plan around real manufacturing-base uncertainties and disclose them plainly. Did that land?
