JPM European Semiconductors

J P M O R G A N Europe Equity Research 24 August 2026

European Semiconductors Inventory 2Q26: Benign inventories indicate continued strength in semi-conductor stocks

• Inventory position indicates an environment that continues to be European Tech Hardware & supportive of a continuing up-cycle in the sector: Semi-conductor inventory Payments increased 5.6% QoQ in absolute dollar terms in 2Q26. However, inventory Sandeep Deshpande AC days were reduced to 136 days vs. 140 days at the end of Q1’26. On a ( seasonally-adjusted basis, overall semi-conductor days of inventory stood

1.5% below normal seasonal levels (three-year seasonal average) exiting Craig A McDowell 2Q26, higher than the 5.5% below average seen at the end of Q1’26. Semi- ( conductor ex-memory inventory increased by 4.8% QoQ in dollar terms, with J.P. Morgan Securities plc days of inventory decreasing to 143 days vs. 147 days in 1Q26. On a seasonally-adjusted basis, semi-conductor ex-memory inventory stood 5.0% Specialist Sales contact details: above the three-year seasonal average exiting 2Q26, compared to 4.5% above Scott Silver - Specialist Sales - exiting 1Q26. Thus overall, despite the strong semi-conductor revenue growth, European TMT inventory in the sector remains in check and there is no indication of over- ( building, enabling the up-cycle to continue.

• Distributor inventories are very low driving re-stocking, memory Also published today is our Q2’26 review inventory remains below seasonal, EMS, assembly and test inventories are for SMID Cap stocks, including our latest also below seasonal. Wireless remains the weakest link: Distributor days order of preference in the space (link) decreased to 59 days at the end of 2Q26 vs. 61 days at the end of 1Q26, which is 20.5% below three-year seasonality. The low level of distributor inventories is likely to engender continued restocking that will help semi-conductor company sales. Inventory at auto/industrial-exposed companies decreased from 173 days in 1Q26 to 163 days in 2Q26. On a seasonally-adjusted basis, 2Q days of inventory were 3.4% below the three-year seasonal average vs. 3.6% above seasonal levels in 1Q26. Thus, this key European end market is also improving. At Automotive and Industrial OEMs, although auto OEMs increased slightly, this is likely due to re-stocking – inventory days rose from 58 days in 1Q26 to 61 days in 2Q26, and stood 1.6% above three-year seasonal average levels compared to 2.2% below seasonality exiting 1Q26, while at industrial OEMs inventory days declined from 102 days in 1Q26 to 99 days in 2Q26, and stood 3.1% below three-year seasonal average levels compared to 2.7% below seasonality exiting 1Q26. The wireless market is the only one with cautious trends – inventory days rose from 139 in 1Q26 to 149 in 2Q26, standing 5.5% above three-year seasonal average levels compared to 2.4% above seasonality exiting 1Q26. • Sector-specific indicators indicate continued stock price performance: Despite semi-conductor growth that was very high, up 35.3% QoQ and 124% YoY, semiconductor inventories remain under control with key segments such as distributors continuing to have below normal inventories. Memory inventory remains 14% below the seasonal average and auto/industrial semi- conductor inventory is below normal levels. With the inventory picture really benign and no indications of any of the key semi-conductor indicators deteriorating, we believe that the reports and the guidance from semi- conductor companies should continue to be strong in the October results. With the shortages in the semi space continuing, we remain bullish on most of the large cap semi-conductor stocks in our space. ASML (OW, AFL) and ASMI (OW) are our key picks in the space, and we are also bullish on Infineon (OW), VAT (OW) and Besi (OW) in the large cap space.

See page 17 for analyst certification and important disclosures, including non-US analyst disclosures.

Sandeep Deshpande AC Europe Equity Research ( August 2026 JPMORGAN

Table Of Contents Semiconductor Quarterly Data Snapshot. . . . . . . . . . . . . . . . . . . 3 Overall semi inventories increased in $ terms but decreased in DOI terms . . . . . . . . . . . . .…