AI and Semiconductor Investments: Moving Toward a Profitability Turning Point and a Market Rebound?

The artificial intelligence (AI) and semiconductor industry continues to be the focus of global financial markets in mid-2026. Spending of hundreds of billions of dollars by major technology firms is beginning to show signs of commercial returns, while capacity expansion and capital flows into semiconductor ETFs reflect long-term optimism. However, stock price volatility, especially in South Korea, as well as security risks in crypto ecosystems such as Solana, serve as reminders that challenges remain.
AI Begins to Generate Commercial Returns
Financial institutions and analysts note that large-scale spending on AI infrastructure is now starting to surpass the basic payback threshold. According to an analysis by Exponential View reported by Bloomberg, global AI revenue (excluding China) reached about $25 billion in the first quarter of 2026, exceeding depreciation estimates for data center and chip infrastructure of $21 billion. This marks the second consecutive quarter in which revenue exceeds depreciation costs.
Even though margins remain thin (depreciation still accounts for more than two-thirds of revenue), the trend suggests the AI industry is approaching a turning point. The AI annual run rate has reached an impressive level, with growth far faster than previous technology waves such as the internet or mobile. AI adoption within large companies is also starting to drive productivity improvements and profit margin gains, especially in sectors that use AI for core operations.
TSMC Expansion in the US: $265 Billion to Support AI
One concrete piece of evidence for commitment to AI growth is Taiwan Semiconductor Manufacturing Company (TSMC). The company recently added $100 billion for expansion in Arizona, bringing its total investment in the US to $265 billion. The plan includes up to 10 wafer fabrication plants, two advanced packaging facilities, and an R&D center.
The expansion is driven by strong demand from US customers for AI, as well as efforts to reduce geopolitical risk. TSMC reported a 77% jump in net profit in the second quarter of 2026, and continues to raise its capital expenditure (capex) outlook to $60-64 billion this year. 2nm production and more advanced technologies will be the main drivers of growth in the coming years.
This move strengthens the US semiconductor ecosystem and supports the “AI megatrend” predicted to continue through 2029-2030.
Korean Semiconductor Stocks: Oversold or a Rebound Opportunity?
Korean semiconductor stocks, such as Samsung Electronics and SK Hynix, have fallen sharply recently—about 25-33% for related indices—due to concerns about NAND pricing and broader market corrections. However, many Wall Street analysts and Korean brokers believe the drop has already gone beyond fundamentals (oversold).
Rebound-supporting factors include:
DRAM prices remaining strong.
Growth in High-Bandwidth Memory (HBM) for AI.
Continued Big Tech investment in AI infrastructure.
These stocks are now trading at historically low levels (forward P/E of about 3.5-6x for 2027), making them attractive for long-term investors. The semiconductor revenue cycle is projected to peak in late 2026, with growth slowing but still remaining positive.
Capital Flows Into Semiconductors: Record ETF Inflows
Investors continue pouring money into the sector. US semiconductor ETFs logged record inflows of about $46 billion throughout 2026 (through mid-year), despite price corrections. This reflects confidence that the AI rally still has room to continue, driven by long-term structural demand.
The global semiconductor market is projected to exceed $1 trillion in revenue in 2026, with AI as the main driver. The computing and data storage segments are expected to grow by more than 40% YoY.
On-Chain Security Risks: Lessons from the Allbridge Incident
On the other hand, the crypto ecosystem faces security challenges. Allbridge Core, a project on Solana, was recently attacked via a flash loan exploit, resulting in losses of about $1.65-1.66 million in USDC/USDT on July 19, 2026. The attacker manipulated the stablecoin liquidity pool before bridging the funds to Ethereum.
The incident—similar to previous attacks in 2023—highlights vulnerabilities in DeFi protocols, even though losses were limited to the pool liquidity and did not affect users’ wallets. Allbridge has halted pool-based swaps and asked arbitrageurs to return funds. This case is a reminder that on-chain security still requires continuous improvement, especially as large capital flows into digital assets accelerate.
Conclusion: Optimism with Caution
AI and semiconductor investment appears to have entered a phase where spending is starting to pay off, supported by capacity expansions such as TSMC and record capital inflows into ETFs. Korean stocks offer opportunities for investors who view the decline as oversold, while the AI rally could potentially continue throughout the cycle of strong revenue.
However, risks such as market volatility, infrastructure bottlenecks (power, packaging), and cybersecurity threats remain. Investors are advised to diversify and focus on long-term fundamentals amid this fast-changing technological landscape.
This article is compiled based on the latest data as of July 2026 from various reputable sources.
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