UBS released a report indicating that global semiconductor sales in July dipped from the record highs of the previous month, with memory chip sales experiencing the most significant drop. Citing data from the Semiconductor Industry Association (SIA), UBS noted that global chip sales fell by 9.8% month-over-month in July.

Memory chip sales specifically declined by 16.3% month-over-month, while integrated circuit sales excluding memory actually posted a 0.9% gain. UBS attributed the memory chip sales decline primarily to reduced shipment volumes, noting that DRAM and NAND average selling prices rose by 8.3% and 9.8%, respectively, during the same period.

Looking ahead, UBS forecasts DDR prices to increase by 22% quarter-over-quarter in Q3, with NAND contract prices expected to rise by 20%. In its report, UBS stated: "We now expect DRAM and NAND supply shortages to persist through 2027."

Despite the July data correction, UBS emphasized that the semiconductor industry's upward cycle remains intact, transitioning from a "hyper-growth" phase to a "more sustainable expansion" phase. The data shows logic chip sales rose 2.2% month-over-month to a record $37 billion, while analog chip sales climbed 3.4%.

On individual stocks, UBS continues to favor US-listed Micron Technology (MU.US) and NVIDIA (NVDA.US). Among international semiconductor stocks, its top picks include ASE Technology, Foxconn Precision, NXP Semiconductors (NXPI.US), Infineon Technologies AG (IFNNY.US), MediaTek, Quanta Computer, Samsung Electronics (SSNLF.US), SK hynix (SKHY.US), and Taiwan Semiconductor Manufacturing (TSM.US).

UBS projects global semiconductor revenue will reach $1.63 trillion in 2026, representing a 118% increase from 2025, and predicts this upward cycle will persist at least through 2028. UBS analysts stated: "While semiconductor revenue growth may peak in mid-2026, leading indicators including wafer foundry utilization rates, packaging equipment demand, and memory chip profitability all support this cycle extending at least to 2028."

UBS believes that wafer foundry capacity utilization, packaging equipment demand, and memory chip profitability continue to underpin a prolonged cycle.