TechFlow News, According to Chaoxiang Research, UBS released a SemiBytes Flash Report on July 20, 2026, indicating that the semiconductor sector is moving from a broad-based rally into a phase of severe divergence, with the AI-themed crowded trade continuing to persist.
The report covers five core topics. The release of Kimi K3 drives another upgrade in open-source model scale, with longer context windows boosting HBM and storage demand, making NVIDIA the biggest beneficiary. Micron's cumulative free cash flow over the next few years is expected to exceed $400 billion, and after the buyback ban is lifted, the theoretical buyback ratio could exceed 40%, which is not yet fully priced by the market.
Divergence within the analog chip sector is intensifying; stocks with higher AI exposure have commanded a 42x P/E premium, while valuations for stocks with automotive and industrial exposure remain near historical averages. Positioning crowdedness indicates that Lam Research, Broadcom, Seagate, Micron, and AMD remain in a state of extreme long crowdedness.
