TSMC and Micron boom drives Taiwan 'fab five's 1H26 profits

The expansion of TSMC and Micron has driven the profit growth of Taiwan's 'fab five' in H1 2026, fueled by a cascade of advanced process investments. Upstream equipment and materials suppliers will benefit from increased capacity demand, while midstream OSAT services gain leverage from backlog growth. Geopolitical tensions are pushing companies toward localization, increasing compliance costs and reducing short-term margins. Competitors like Samsung and SUMCO may accelerate technology catch-up to reclaim market share. Over the next 12–24 months, global chip demand recovery and geopolitical fragmentation will further solidify Taiwan's supply chain dominance, but rising capital intensity and tech restrictions may accelerate industry consolidation.