US Semiconductors: Q2 Analog Semi Preview: normalization turning into recovery enhanced by AI

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US Semiconductors: Q2 Analog Semi Preview: normalization turning into recovery enhanced by AI

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US Semiconductors

Q2 Analog Semi Preview: normalization

turning into recovery enhanced by AI

Price Objective Change

Cycle recovery broadening; favorable Q2/Q3 setups 13 July 2026

We preview analog earnings as the sector transitions from inventory normalization to Equity

demand restocking. Following a prolonged period of digestion, revenue growth is United States

increasingly being supported by improving unit demand, while secular drivers tied to AI Semiconductors

infrastructure, electrification, automation and aerospace & defense continue to provide

incremental support. Unlike prior analog cycles that typically saw a stronger 1H followed VivekResearchAryaAnalyst

by seasonal moderation, management teams increasingly point to a stronger 2H BofAS

supported by improving backlog visibility and healthier demand trends. We continue to vivek.arya@bofa.com

view analog semis as one of the more attractive areas of semis during periods of Duksan Jang Research Analyst

volatility given their combination of defensive industrial exposure, long product cycles, BofAS

strong free cash flow generation and participation in many of the same secular themes duksan.jang@bofa.com

driving broader semiconductor spending. We expect diversified semis sales growth at Michael Mani

Research Analyst

top suppliers to accelerate to 19% in CY26E from 1% in CY25E. CY26-28E CAGR is 12% BofAS

vs. core semis growth of 14% CAGR. michael.mani@bofa.com

Industrial/AI: cyclical rebound and secular AI/A&D uptake LiamResearchPharrAnalyst

Improving bookings, backlog and order activity is now evident across most regions and BofASliam.pharr@bofa.com

submarkets.