Semiconductor foundries specializing in mature-nodes are raising their prices, a surprising move given the weak demand for electronics.
This development signals that pricing power is returning to these manufacturers, driven not by a surge in orders but by a squeeze on their own costs. The core of this story lies in a classic cost-push inflation scenario. First, foundries are facing unavoidable increases in their operating expenses. In Taiwan, a global chipmaking hub, electricity tariffs for large industrial users were raised significantly in 2024. This, combined with rising prices for materials like gold used in chip packaging, has established a higher cost floor. These are not temporary issues but structural changes that directly impact the cost of making each silicon wafer.
Second, the supply of mature-node capacity has tightened. For the past two years, capacity at the 8-inch (200mm) wafer fabs, which produce many of these chips, has been snug. More recently, major Chinese foundries like SMIC and Hua Hong have been running at full capacity and have already raised their prices by around 10%. This creates a “price umbrella,” giving their Taiwanese counterparts like UMC and VIS the justification and market cover to implement their own price hikes.
What makes this situation particularly interesting is the backdrop of weak end-market demand. Analysts at IDC and Gartner are forecasting the sharpest decline in smartphone and PC shipments in a decade for 2026. Normally, such a slump would force suppliers to cut prices to attract business. However, foundries are choosing a different path. They are leveraging the tight supply and cost pressures to defend their profit margins. By raising their Average Selling Prices (ASPs), they aim to offset the impact of potentially lower sales volumes, prioritizing profitability over market share.
This isn't a sudden event. It's the culmination of pressures that have been building for over a year, from the 2024 power rate hikes to the steady tightening of capacity throughout 2025. The recent announcements from Nexchip and VIS are simply the tipping point, confirming that the industry is now acting on these long-brewing pressures. The market is now watching closely to see if these price increases will stick, which would signal a new phase for the mature-node semiconductor cycle.
- Foundry: A semiconductor manufacturing plant that makes chips for other companies. Also known as a “fab.”
- Mature Node: Older and more established semiconductor manufacturing technologies (e.g., 28nm and larger). These are used for a wide variety of common chips in cars, power management, and displays, rather than cutting-edge processors.
- ASP (Average Selling Price): The average price at which a company sells its products or services. It is a key metric for profitability.