Semi Important Stuff Price targets

Equity Research EUROPE | Semiconductors August 14, 2026

Semi-Important Stuff Price targets Company Rating TP

Optical stocks were in focus this week following results from Lumentum, Arm BUY $320

Coherent and Cisco. We believe comments by Lumentum and Cisco on Infineon BUY €96

inter-DC connectivity are positive for Nokia. Analog pricing continues to Melexis BUY €94

move up as seen in the results of SMIC and Hua Hong, and reports of ADI Nokia BUY €13.80 raising prices. The Terafab will be housed in Texas in the largest building STMicro BUY €68 ever built, with Musk signalling an intent to use FELs as the light source for SUSS BUY €109 EUV systems within it. Aixtron BUY €44.0

ASML HOLD €1,650 Lumentum and Cisco point to rising Scale Across deployments - positive for Nokia: ams OSRAM HOLD CHF 21.00 Lumentum reported an 80% growth in its pump laser shipments, saying that expanding inferencing and training applications are driving full-rate connectivity between data centres. Nordic HOLD NOK 171

Political and regulatory constraints also favour smaller, more modular builds which increases Ericsson HOLD SEK 98 demand for Scale Across deployments. According to Lumentum, one major hyperscaler's Soitec UNDERPERFORM €85 capacity between just two AI Data Centre sites is double the global backbone capacity they built ASMI UNDERPERFORM €690 over the entire decade. Cisco also stated this week that as AI workloads become increasingly distributed across clusters and facilities, demand for pluggable transceivers for Scale Across VAT UNDERPERFORM CHF 560 . will remain strong. On the pluggable side Cisco booked orders of $1bn in the July quarter, Source: Jefferies estimates

compared to Nokia which we believe took orders for around €1.4bn or higher in the June quarter (total orders of €2.8bn with over half from optical, mainly from pluggables). We see Nokia as potentially gaining share here as the market transitions from 400G to 800G and further to 1.6T.

Pricing continues to trend up in mature node chips: So far price increases in the analog segment in this upcycle have been somewhat disappointing for investors, as most chip vendors have only put through modest price increases to compensate for cost inflation. To some extent the exception is IFX, which seems to have increased silicon MOSFET prices by close to 20% for its AI customers, but is yet to do so for industrial and automotive customers. However, newsflow seems to point to ongoing mature node price increases, both in China and outside. Higher prices were key to the improved profitability reported by both SMIC and Hua Hong. Analog Devices was reported to have sent out a letter to distributors and customers this week regarding a price increase from Sept 13th. While MCU and analog prices are also expected to rise, we continue to see silicon MOSFETs from Infineon as likely to stay in the sweet spot of price increases in coming quarters as well, contributing to higher margins in the PSS and Automotive segments.

Terafab exploring FEL for EUV lightsource: Terafab plans took a step forward with Tesla and Spacex announcing plan to house it in the largest building ever built worldwide, in Texas. Elon Musk also signalled a possible intent to use Free Electron Lasers (FEL) as the light source for powering ASML's EUV systems in the fab. If it goes ahead, the likely supplier of FELs is xLight, a start-up funded by the US government which is currently building a prototype of the system at the Albany Nanotech complex. ASML's scanners currently use Laser Produced Plasma (LPP). xLight's approach uses a common particle accelerator housed in a building outside the fab which provides EUV light at 4x the power for all the EUV systems inside the fab. This would provide much higher throughput per system, reducing the EUV cost per wafer by 50% and the total cost per wafer by 20% according to xLight. The project is backed by Trump government as a method of improving US leadership in semiconductor manufacturing technology, but the Janardan Menon * | Equity Analyst commercial viability of the solution is likely to be known only by 2028 when the prototype starts | producing wafers. Om Bakhda * | Equity Analyst |

Isaac Dale * |…