Daily Update - May 18th, 2026
NAND cycle booming across the supply chain - from materials and WFE to SSDs.
The rise of Agentic AI is creating a duopoly between OpenAI and Anthropic. Lots of NAND news today, with asian supply chains reporting record profits — everything from raw materials, and wafer fab equipment, and all the way SSDs — things are looking up in demand. CXMT memory numbers look great too! Plus, Gavin Baker!
Let’s dive in.
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The OpenAI / Anthropic Duopoly
Among 34 AI startups analyzed by The Information, OpenAI and Anthropic account for 89% of the total $80B revenue. Other than these two, the next three companies crossing $500M in ARR are ElevenLabs, Cognition, and Perplexity, although revenue from some of these startups also flows into the big two model providers. Important to note that most of these startups are also burning cash in an effort to build latest models, for which hardware is just not cheap.
Vik: There are only two clear winners here among the startups, but it would be a mistake to think that only OAI and Anthropic are killing it out there. Yes, in startup land they have high ARRs, but what is not included here is Google who is benefitting from both software and hardware sides. Last reported earnings saw Google Cloud grow 63% due to AI demand, and they also sell TPUs externally now.
Kioxia’s Massive Run
If you thought memory makers had it great, Kioxia’s NAND business is booming as agentic AI places much higher demands on storage required for long term memory. Kioxia shares are up 300% just this year. They recently surpassed the quarterly revenue of Toyota Motor Corp, one of Japan’s most profitable businesses.
Vik: Kinds of workloads are driving NAND demand: agents, multi-modal, and world models. All of these require massive storage. NAND SSD makers are focusing efforts on high IOPS to ensure that they can be used for KV-cache offloading so that agents can remember a lot. In addition, LTAs now protect pricing power of storage vendors.
Applied Materials posts record results and forecasts shortage
The Elec: Applied Materials posted record quarterly revenue in its fiscal 2026 second quarter ended May 14, driven by rapidly expanding investment in artificial intelligence computing infrastructure across global markets. Cost reductions and improved operating leverage also enhanced overall profitability during the quarter. CEO Gary Dickerson expects semiconductor demand to sustain strong growth in the chip equipment market through 2030, citing accelerating global AI infrastructure investment as the primary driver sustaining this demand.
Vik: AMAT is a big supplier of WFE to the NAND market, which clearly is in a massive growth trajectory.
SoulBrain — A WFE downstream player for materials, benefits from NAND
SoulBrain reports 24 percent operating profit increase in Q1 supported by strong capex from NAND flash chip makers. SoulBrain supplies hydrofluoric acid (HF), buffer oxide etchant (BOE), chemical mechanical polishing (CMP) slurry and precursors to customers including Samsung Electronics and SK hynix. As NAND stacking technology advances, the number of etching and cleaning process steps increases, leading to higher consumption of semiconductor materials.
Quick Hits
STMicroelectronics is developing specialized power semiconductor products for Nvidia’s emerging 800-volt AI data center power architecture and systems. (The Elec)
Lots of discussion on SiC vs GaN on X after Irrational Analysis puts out comparison table.
Jeju Semiconductor posts 1,713 percent operating profit surge in Q1, capitalizing on record memory chip investment and demand. (The Elec)
CMTX achieves record first-quarter revenue driven by strong demand for silicon-based component parts used in semiconductor wafer etching systems. (The Elec)
Subsea cable traffic could be the next blockade in the Strait of Hormuz. (CNN)
Key Data
According to CXMT’s latest IPO filing document, 1Q26 revenue is up 720% YoY. At this rate, they will make more in 2026 compared to their last 3 years of revenue. This is expected to me the most explosive Chinese IPO this year. For more, see more from SemiAnalysis’ Ray Wang and Sravan Kundojjala on X.
Earnings
Nvidia announces first quarter earnings on May 20, 2026. In the past, Nvidia earnings has quite often been the biggest indicator of where AI is going.
TIL: Tech investing from the best — Gavin Baker
Gavin says lots of interesting things. Value packed video.
Why memory might have not peaked?
Gavin’s embarrassing mistake
Why it is so hard to be a good neocloud
We are nowhere near the compute we need