AI Tailwinds Power Foundry, Packaging & Memory: TSMC’s Resilience, Aehr’s WLBI Win & Penguin’s Earnings Upsurge
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Can seasonal headwinds and tariff tangles really slow the semiconductor AI juggernaut? TSMC’s first-half revenue is up 40% despite June’s customary dip, Aehr just shipped the industry’s first wafer-level burn-in system for AI processors, and Penguin Solutions crushed profit estimates while slashing debt on a memory-driven rebound. Together, these stories map a clear narrative: AI demand is the structural lift propelling every corner of the chip space.— Let’s Chip In
What The Chip Happened?
🚀 Seasonal Dip, Structural Lift — June Sales Show TSMC’s AI Mojo Remains Intact
🚦 Tariffs Trip Up, AI Picks Up: Aehr Navigates a Transitional FY 2025
🕶️ Penguin Soars on Profits, Not Feathers
[Penguin Solutions Lifts FY 2025 EPS After Solid Q3 Print]
Read time: 7 minutes
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Taiwan Semiconductor Manufacturing Company (NYSE: TSM)
🚀 Seasonal Dip, Structural Lift — June Sales Show TSMC’s AI Mojo Remains Intact
What The Chip: TSMC’s Form 6‑K this morning (July 10, 2025) reported June revenue of NT$263.71 billion, down 17.7 % MoM but still 26.9 % higher YoY. Despite the seasonal lull before Apple’s iPhone ramp and currency headwinds, first‑half revenue is up 40 % versus 1H‑24, keeping the foundry ahead of its full‑year growth target.
The Situation Explained:
📉 MoM slide is seasonal, not sinister. June always lands between the spring smartphone slowdown and the iPhone build that starts in July.
📈 YoY growth still scorching. A 27 % YoY print comes on top of tough comps, yet 1H‑25 revenue in USD terms is tracking ~33 % growth—well above management’s 24‑26 % target.
🔌 AI/HPC capacity sold out. Chairman C.C. Wei (TSMC’s CEO‑turned‑chair) reiterated in prior investor events, “AI demand continues to outstrip supply,” with 3‑nm logic and CoWoS advanced‑packing lines fully booked into 2026.
🛠️ Packaging is the bottleneck. Management plans to double CoWoS capacity YoY; any slip would push out Nvidia, AMD, and Qualcomm shipments.
💱 FX bites margins. Every NT$1 move versus USD trims roughly 40 bp of gross margin; the strong Taiwan dollar shaved an estimated NT$ 8‑10 bn off June sales.
🤖 Foundry vs. memory split widens. Samsung just guided to a 56 % profit plunge on AI‑memory weakness, underscoring how logic wafers remain robust while commodity memory stays volatile.
📅 Next catalyst: 2Q‑25 earnings on July 17. A gross margin print ≥ 54 % would confirm TSMC is passing higher costs straight through to customers despite tariffs and FX pressure.
💹 Shares drift but outperform peers. ADRs opened higher, then eased with the SOX index; the stock still outruns memory names year‑to‑date as investors crowd into pure‑play AI exposure.
Why AI/Semiconductor Investors Should Care: TSMC sits at the choke point of the AI compute build‑out: every leading‑edge GPU and smartphone application processor rides on its 3‑nm and CoWoS lines. June’s dip looks purely seasonal, while order books stretch into 2026. If management can keep yield high and packaging ramps on schedule, the foundry’s pricing power and 40 % YTD revenue growth signal durable upside—even as tariffs, FX, and memory weakness rattle the broader chip space.
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Aehr Test Systems (NASDAQ: AEHR)
🚦 Tariffs Trip Up, AI Picks Up: Aehr Navigates a Transitional FY 2025
What The Chip: Aehr’s FY 2025 revenue slipped 11 % to $59 m and GAAP EPS turned negative after a SiC slowdown and tariff‑related delays. Yet management says FY 2025 was “transformative,” shipping the industry’s first wafer‑level burn‑in (WLBI) system for AI processors and landing a Tier‑1 hyperscaler as its first packaged‑part burn‑in customer. (Results released 8 July 2025.)
The Situation Explained:
🔻 Revenue miss & margin squeeze: Q4 sales of $14.1 m missed consensus by ~$0.7 m; non‑GAAP gross margin fell to 34.7 % as high‑margin SiC orders dried up and factory consolidation created under‑absorption.
🤖 AI processors gaining steam: First production WLBI system accepted; a second AI device entered evaluation, and Aehr is “engaging with multiple high‑profile processor companies.” CEO Gayn Erickson: “We believe we can capture a meaningful share of the AI burn‑in market.”
🌐 Packaged‑part win: Post‑Incal acquisition, Aehr shipped record Sonoma high‑power systems; a leading hyperscaler committed to multi‑system ramps and is already discussing next‑gen nodes.
⚡ GaN power debut: Secured first high‑volume FOX‑XP order from a top auto‑chip maker—broadens reach beyond the EV‑centric SiC niche.
🕳️ SiC pause & tariffs: Softer EV demand and U.S.–China tariff uncertainty pushed customers to defer SiC capacity adds; backlog sat at $15 m (effectively $16 m including June orders).
📈 Bookings still up: FY bookings jumped 24 % to $61 m, evidence that diversification is working even amid revenue contraction.
💵 Balance‑sheet watch: Cash fell to $26.5 m after the Incal deal and Fremont facility upgrade; operating cash flow ‑$7.4 m FY‑to‑date.
🔭 Guide withheld: Management expects order growth in every segment “except possibly SiC” for FY 2026, but kept formal targets suspended until tariff fog clears.
Why AI/Semiconductor Investors Should Care: Aehr’s core SiC engine stalled, exposing near‑term earnings risk, yet the company showed it can quickly retool its FOX platform for much larger TAMs—AI processors, GaN power, and silicon photonics. If wafer‑level burn‑in becomes standard for high‑power GPUs and HBMs, Aehr’s first‑mover IP and dual WLBI/PPBI offering could unlock multi‑fold upside. Until then, shares may stay volatile as tariff policy and customer timing drive quarterly lumpiness. Near‑term caution, long‑term optionality.
Penguin Solutions (NASDAQ: PENG)
🕶️ Penguin Soars on Profits, Not Feathers
What The Chip: On July 8, 2025, Penguin Solutions posted Q3 FY‑25 results that missed revenue expectations by a whisker yet crushed non‑GAAP EPS forecasts by 47 %. Management raised full-year earnings guidance, and investors sent the stock up nearly 8%.
The Situation Explained:
🚀 Profit Power: Non‑GAAP EPS of $0.47 beat the Street by 15 c despite a modest $4 m revenue shortfall, proving cost‑discipline is biting.
🐧 Memory Is the Hero: Integrated Memory revenue jumped 42 % y/y and management now sees 25‑30 % FY‑25 growth as enterprises bulk up DRAM and NAND for AI workloads.
😬 Computing Gets Choppy: Advanced Computing sales fell ‑9 % y/y and ‑34 % q/q after lapping a hyperscale roll‑out—reminding investors that project timing still whipsaws the P&L.
💡 Guidance Glide‑Up: FY‑25 non‑GAAP EPS target rises to $1.80 ± $0.05 (up 12 %), and GAAP EPS swings back to positive territory—even while revenue growth stays at ≈17 %.
🔋 Balance‑Sheet Buff: June refinancing chopped $200 m of gross debt and pushed maturities beyond 2026; net cash now ≈$66 m. CFO Nate Olmstead called it “a de‑risking move that lowers interest expense and frees cash for R&D.”
🌐 SK Group Synergy: CEO Mark Adams said early SK Telecom data‑center pilots and SK hynix memory deals “validate our technology‑agnostic approach and open global doors.”
⚠️ Tariff Tangle: Optimized LED saw shipments pause as new U.S.–China tariffs hit Huizhou output—proof geopolitical costs can still nip margins.
📈 Street Turns Warmer: Goldman, JPMorgan and Rosenblatt hiked price targets to $21‑$27 after the call; this marks three straight quarters of upward revisions.
Why AI/ Semiconductor Investors Should Care: Penguin is quietly morphing from a lumpy, hardware‑heavy integrator into a higher‑margin solutions vendor riding the enterprise AI build‑out. Surging memory demand, recurring software/services attach, and reduced leverage underpin a clearer earnings runway—even if Advanced Computing stays volatile. Keep an eye on tariff risk and supply‑chain lead times, but the guidance track‑record and debt reset suggest upside torque when AI capex normalizes in 2026.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] Penguin Solutions in plain English
Date of Event: July 8 2025 — Q3 FY 2025 earnings release and call
Executive Summary
*Reminder: We do not talk about valuations, just an analysis of the earnings/conferences
Penguin Solutions, Inc. (Nasdaq: PENG) delivered a mixed but constructive third‑quarter scorecard. Net sales rose 7.9 % year over year to $324 million, falling roughly $4 million shy of the $328 million consensus. Profitability told a different story: non‑GAAP diluted earnings per share (EPS) climbed 27 % to $0.47, trouncing the $0.32 Street view, while GAAP EPS dipped to a marginal ‑$0.01 on higher amortization and a goodwill write‑down. Non‑GAAP gross margin eased 60 basis points to 31.7 %, yet tight expense control held the non‑GAAP operating margin at 11.9 %.
Chief Executive Officer Mark Adams framed the quarter as evidence that “our progress in transforming Penguin into a leader in high‑performance, high‑availability infrastructure solutions is tracking to plan.” On the call he highlighted early signs of enterprise artificial‑intelligence (AI) adoption across finance, energy, defense, education, and “neo‑cloud” providers—smaller, fast‑growing cloud specialists.
Management nudged full‑year guidance higher, lifting the midpoint of non‑GAAP EPS by $0.20 to $1.80 and turning the GAAP outlook back to positive territory. That combination of earnings quality and outlook support helped the stock rally 7‑8 % in the session following the release.