The semiconductor industry is seeing a significant shift as pricing power extends beyond the latest chips to include older, mature-process technologies.
The primary driver behind this change is the explosive growth in Artificial Intelligence (AI). The immense demand for AI accelerators, like those from NVIDIA, creates a bottleneck for the most advanced components. This includes cutting-edge chips, high-bandwidth memory (HBM), and sophisticated packaging technologies like CoWoS. This scarcity at the high end is now creating a ripple effect that lifts all boats, including those that were previously struggling.
This unfolds through a clear causal chain. First, TSMC, the undisputed market leader, is pouring its massive capital expenditures—up to $56 billion in 2026—into next-generation 2-nanometer (N2) and 3-nanometer (N3) production lines and advanced packaging to meet the insatiable AI demand. This strategic focus is the first domino to fall.
Second, as TSMC allocates its resources to the leading edge, less capacity is available for mature nodes. However, AI servers and systems require a host of supporting chips—such as power management ICs (PMICs)—that are manufactured on these very mature processes. This means demand for older chips is rising just as the top manufacturer is looking elsewhere.
Third, the global supply of the oldest 8-inch wafers is actually shrinking. Foundries are consolidating or shutting down less efficient legacy lines. This structural reduction in supply, combined with the new source of AI-driven demand, creates a classic supply squeeze. It's a perfect storm for price increases.
As a result, what was a buyer's market in 2024-2025, with price wars and oversupply in mature nodes, has flipped. Second-tier foundries like UMC and GlobalFoundries now have the leverage to raise their prices, reversing previous concessions and boosting their profit margins. Mature-node capacity is no longer viewed as commoditized slack but as a scarce, essential component in the AI ecosystem.
- Foundry: A semiconductor manufacturing plant that makes chips for other companies that have designed them. Fabless companies like Apple or NVIDIA design chips but use foundries like TSMC to build them.
- Mature Node: Refers to older and more established semiconductor manufacturing processes (e.g., 28nm and above). These are used for a wide variety of less complex chips, such as power management ICs, display drivers, and sensors.
- CoWoS (Chip-on-Wafer-on-Substrate): An advanced 2.5D packaging technology developed by TSMC. It allows for the integration of multiple chips on a single interposer, enabling high-performance computing and AI accelerators.