Silicon wafer demand recovery is clear, but 2H26 pricing remains unlikely to meet bullish expectations

Overview

Using Siltronic’s 2Q26 earnings call as a starting point, this report assesses the demand, pricing, and capacity implications for the global silicon wafer industry from 2H26 through 2027. The core conclusion is that the demand recovery is becoming evident, particularly with AI-driven memory and logic demand supporting 300mm wafers, but pricing improvement remains modest and is unlikely in the near term to meet some bullish investors’ expectations of a significant price increase in 2H26.

Core views

JPMorgan believes silicon wafer pricing in 2H26 is broadly in line with its expectations but below those of more optimistic investors in the market. Most 300mm products are covered by LTAs, and unchanged LTA pricing will limit ASP upside; 200mm pricing is expected to stabilize in 2H26 after declining in 1H26. If pricing fails to lift earnings meaningfully, some investors may prefer to accumulate fundamentally stronger AI beneficiaries on weakness. Market attention is expected to shift toward how a tightening-but-not-short environment in 2027 will affect spot and LTA pricing.

Analysis framework

The report uses an earnings-call read-through approach, mapping Siltronic’s sales guidance, shipment area, 300mm and 200mm pricing, LTA coverage, inventory changes, Capex discipline, and FabNext capacity plans to the global silicon wafer pricing cycle and earnings elasticity.

Methodology notes

• Industry cycle analysisSupply-demand and price transmission

  Assess pricing elasticity through demand recovery, inventory conditions, capacity expansion, and reinvestment price thresholds.

  The report emphasizes that current conditions reflect tightening supply rather than a shortage. Non-LTA pricing has improved but remains below reinvestment levels, limiting incentives for new capacity.

• Earnings-call read-throughread-through analysis

  Derive implications for the silicon wafer industry from information disclosed at Siltronic’s earnings call.

  The analysis focuses on 300mm, 200mm, LTA, non-LTA, sales guidance, and Capex commentary, and links these points to areas of focus for GlobalWafers’ subsequent earnings call.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Siltronic AG (WAF GY)

  Core company for the industry read-through, Not Covered

  Strengths

  Strong 300mm wafer demand, slightly improved sales guidance, shipment area growth, and quarter-on-quarter gross margin improvement.

  Weaknesses

  Spot prices remain below reinvestment levels, 2Q26 EBIT and net income remain negative, and 200mm pricing was under pressure in 1H26.

  Comparison

  The company’s pricing signals are more moderate than bullish expectations for significant price increases in 2H26.

  Risks

  If prices fail to rise to reinvestment levels, the pace of new capacity additions and earnings recovery may be delayed further.

• GlobalWafers (6488 TT)

  Peer read-through and follow-up validation stock

  Strengths

  Its 2Q26 results and earnings call may provide further validation of industry gross margins and the 2H26 outlook.

  Weaknesses

  The market is focused on whether its 2Q26 gross margin and 2H26 gross margin outlook remain under pressure.

  Comparison

  Siltronic’s moderate pricing signals may influence investor expectations for GlobalWafers’ earnings call.

  Risks

  If gross margins fail to improve, expectations for sector earnings elasticity may be revised downward.

• AI core beneficiaries

  Asset for comparing capital preferences

  Strengths

  Stronger fundamentals and direct support from AI demand.

  Weaknesses

  They experienced a pullback in July, while valuation and crowding may still warrant attention.

  Comparison

  If silicon wafer pricing is lackluster in 2H26, some investors may prioritize accumulating core AI beneficiaries on weakness.

  Risks

  Volatility in AI demand or valuation expectations could affect the relative attractiveness of this allocation.

Key data

• Global silicon wafer area demand in 2026Approximately 7% year-on-year growthSiltronic maintained its demand growth forecast, excluding inventory effects.
• Siltronic 2026 sales guidanceLow- to mid-single-digit year-on-year declinePreviously, the guidance was for a mid-single-digit year-on-year decline; on a like-for-like basis, sales are expected to increase slightly year on year.
• Siltronic 2Q26 salesEUR 321.6mnApproximately 5% quarter-on-quarter growth from EUR 306.5mn in 1Q26.
• Siltronic 2Q26 gross margin-4.5%Improved from -8.5% in 1Q26.
• Siltronic 2Q26 EBITDAEUR 69.4mn, EBITDA margin 21.6%1Q26 was EUR 65.1mn, with an EBITDA margin of 21.2%.
• Siltronic 2Q26 EBITEUR -51.9mn2Q25 was EUR 23.7mn, reflecting continued earnings pressure.
• Siltronic 1H26 CapexEUR 86.0mnBelow EUR 222.0mn in 1H25.
• LTA coverageApproximately two-thirds of the businessMost LTAs cover 300mm wafers, with LTA pricing unchanged in the near term.

Impact & implications

For silicon wafer stocks, the report signals greater certainty around demand recovery, but the pricing and earnings inflection remains insufficiently strong. If 2H26 pricing improves only modestly, near-term sector valuation recovery may be constrained. The key medium-term factors are 2027 LTA repricing, whether non-LTA prices continue to rise, and whether tightening supply translates into stronger pricing power.

Risks

• Silicon wafer price improvement in 2H26 falls short of optimistic market expectations.
• Unchanged 300mm LTA pricing limits ASP upside.
• Spot prices remain below reinvestment levels, making new Capex difficult to initiate.
• Although 200mm demand is strong, staffing adjustments are required, creating execution risks for delivery and costs.
• Inventory effects are excluded from the approximately 7% demand growth forecast, so actual demand may differ from the pre-inventory-adjustment basis.

What to watch

• GlobalWafers’ 2Q26 gross margin and 2H26 gross margin outlook.
• Whether 300mm non-LTA pricing continues to improve and approaches reinvestment levels.
• Whether small LTAs for 2027 or 2028 are renewed under new terms.
• Procurement volumes from memory customers over the next 2-3 years and progress in LTA negotiations.
• The pace of new capacity release at FabNext and whether Siltronic changes its Capex plans.