Chip ETF's Two-Sided Coin: A Billionaire's Enron Warning Meets a Sector-Wide Earnings Blitz

VanEck Semiconductor ETF dips as Michael Burry flags Nvidia risks, but ASML, TSMC, and Lam Research post record results.

The VanEck Semiconductor UCITS ETF is being pulled in opposite directions this week, caught between a prominent short-seller's dire warning and a cascade of bullish earnings reports from the sector's heavyweights.

The fund, which tracks the world's largest chipmakers, closed Thursday at €95.15, down 0.8 percent on the day. That modest decline, however, masks a deeper tension: while one prominent investor compares the industry's biggest player to a collapsed energy giant, the underlying companies are posting record numbers that suggest the boom is far from over.

The Bear Case: Circular Financing and Rising Default Risk

Michael Burry, the investor who famously bet against US subprime mortgages before the 2008 financial crisis, took to X on Wednesday to draw a stark parallel. He compared Nvidia's aggressive AI expansion to the accounting scandal that brought down Enron in 2001, arguing that the risks facing the economy and investors today are significantly higher than in previous cycles.

Burry's central concern revolves around what he calls circular financing structures. In these arrangements, lenders, suppliers, and customers become so intertwined through loans and equity stakes that genuine demand becomes nearly indistinguishable from financed demand. The concern is that some of the AI boom's momentum is being propped up by financial engineering rather than real-world adoption.

Adding weight to his argument: the cost of credit default insurance on Nvidia's bonds has climbed 90 percent since the start of the year — a clear signal that investors are reassessing the company's default risk.

The Bull Case: Record Revenues Across the Supply Chain

Yet even as Burry sounds the alarm, the ETF's core holdings are delivering numbers that paint a very different picture.

ASML, the Dutch lithography specialist, has sharply raised its 2026 revenue forecast to between €43 billion and €45 billion, up from a previous range of €36 billion to €40 billion. The upgrade reflects robust demand for its EUV systems, which are expected to generate gross margins of 54 to 56 percent.

Lam Research reported record fourth-quarter revenue of $6.72 billion, with management pointing to AI demand as a structural driver and projecting continued growth into the September quarter.

TSMC, the world's largest contract chipmaker, posted July revenue of NT$467.58 billion — a 44.7 percent year-over-year increase. The company also approved a ¥282 billion (approximately $1.77 billion) investment on August 12 to establish a joint venture with Sony Semiconductor Solutions in Kumamoto, Japan. The new entity, named Advanced Vision Semiconductor Manufacturing Corp, will focus on mass-producing next-generation image sensors for smartphones, with production slated to begin in 2029. Sony is contributing ¥465 billion to the project.

Nvidia itself rose 3 percent to $224.09, buoyed by details of a $500 billion financing platform for data centers being developed with Goldman Sachs and other financial institutions — the same initiative that drew Burry's criticism.

A Market Taking Stock

The ETF's year-to-date gain stands at roughly 79 to 80 percent, though it remains 14 percent below its 52-week high of €111.18 reached in late June. The Relative Strength Index sits at 51.9 to 53.1, depending on the day, signaling a neutral-to-balanced momentum — neither overbought nor oversold.

The broader industry backdrop remains robust. The Semiconductor Industry Association reported on August 11 that global chip sales jumped 35.1 percent in the second quarter of 2026 compared to the first quarter, with June revenues reaching $134.5 billion — a 123.6 percent surge year over year.

Supply chain developments reinforce the growth narrative. NXP Semiconductors broke ground on August 12 on a new assembly and test facility in Malaysia spanning 900,000 square feet, which is expected to double the company's regional production capacity by 2028. Lam Research also announced a partnership with NY Creates to train 3,500 students in semiconductor process integration, addressing the industry's skilled labor shortage as it targets $1.5 trillion in annual revenue by the end of 2026.

The Crux: Who's Paying for the Boom?

The real question hanging over the sector isn't demand — it's financing. The four largest hyperscalers are projected to invest roughly $725 billion in capital expenditures in 2026, and a growing portion of that sum is coming from debt and equity rather than operating cash flow.

That shift is exactly what market participants are now scrutinizing. If the AI buildout increasingly relies on external funding, it could signal an early cooling in the investment cycle — even as order books remain full.

Asian markets offered some near-term reassurance, with Samsung Electronics and SK Hynix leading gains on reports of rising demand for high-bandwidth memory chips and custom AI accelerators.

All eyes now turn to August 26, when Nvidia reports its quarterly results. Analysts expect revenue of around $92 billion — roughly double the year-ago figure. Goldman Sachs and Bank of America remain optimistic heading into the report, noting that demand visibility extends into 2029 even for older GPU architectures.

The earnings will provide the next major test of whether the sector's momentum can withstand the scrutiny of skeptics like Burry — or whether his warnings about the industry's financial foundations prove prescient.