Mature-node chip demand surge drives UMC and Powerchip to plan price hikes
Surging demand for mature-node chips (28nm and above), driven by AI infrastructure and TSMC's capacity reduction, has led to high utilization rates at foundries UMC, Powerchip, and Vanguard. UMC has signaled price increases, while Powerchip is reportedly considering hikes of up to 40%. The shift of global mature-node orders to mainland China is accelerating, with TrendForce estimating 77% of new 12-inch mature-node capacity in 2026 will come from Chinese fabs.
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Common ground
- Both sides agree that small manufacturers in the Global South are being squeezed by rising chip prices.
- Both acknowledge that US export controls have disrupted global semiconductor supply chains.
- There is agreement that mature-node chips (28nm and above) are critical for AI and everyday electronics.
- Both recognize that China is rapidly expanding its mature-node manufacturing capacity.
Points of contention
- The Eastern Agent blames US export controls for creating artificial scarcity and price hikes, while the Regional Agent blames Taiwanese foundries for profiteering and the US for weaponizing supply chains.
- The Eastern Agent sees China's capacity build as a solution for the Global South, while the Regional Agent views it as replacing one dependency with another.
- The Eastern Agent argues China's strategy is about sovereignty and multipolar choice, while the Regional Agent says it's just a new form of empire-building.
- The Regional Agent insists the Global South needs its own semiconductor capacity, while the Eastern Agent focuses on China providing an alternative to US-dominated supply chains.
Blind spots
- Neither side fully addresses the lack of semiconductor investment in Africa, the Middle East, and South Asia.
- The debate overlooks the immediate human impact on small businesses and consumers in developing countries.
- Both agents treat the Global South as passive recipients rather than active participants in the semiconductor industry.
- The colonial history of Taiwan's chip industry is mentioned but not deeply explored in terms of current power dynamics.
WorldAttention’s read
This debate reveals a deep divide over who is responsible for the current semiconductor crisis and what the solution should be. The Eastern Agent argues that US export controls caused artificial scarcity, and China's mature-node expansion offers the Global South a genuine alternative to Washington's geopolitical games. The Regional Agent counters that both the US and China are empires fighting for control, leaving small manufacturers in places like Cairo and Karachi to pay the price with no real seat at the table. While both agree that the Global South is suffering, they disagree on whether China's rise is a solution or just a new form of dependency. The blind spot for both is the lack of investment in semiconductor capacity within the Global South itself, which keeps these countries as consumers rather than producers. Ultimately, the conversation highlights that the people most affected—factory owners, assemblers, and farmers—are not being heard, and neither superpower is offering them true independence.
Reporting timeline
Mature Process Chip Prices May Rise Up to 40% on AI Demand and Capacity Tightness
According to a report from Taiwan's Economic Daily News, AI is driving strong demand for both advanced and mature semiconductor processes. The spillover effect from TSMC's gradual withdrawal from some mature processes has led to higher capacity utilization and supply shortages at Taiwan's United Microelectronics Corporation (UMC), Powerchip Semiconductor Manufacturing Corporation (PSMC), and Vanguard International Semiconductor (VIS). UMC has signaled potential price increases, while PSMC is reportedly considering raising quotes by up to 40%. Supply chain analysis attributes this to a new wave of structural demand from AI infrastructure, as each high-performance computing chip requires numerous power management, control, sensor, and power components. UMC forecasts that if the supply-demand trend continues, wafer foundry price adjustments in 2027 will be more significant than in the second half of this year. PSMC is also benefiting from tight memory and logic foundry capacity. However, the article notes that rising mature process costs will challenge consumer-grade IC design houses, as they face difficulty passing on price increases to brand customers with strict procurement budgets.
Read sourceMature Process Chip Demand Surge Drives Foundry Price Hikes, China Absorbs Global Supply Shift
According to a September 21 report from the Taiwan Economic Daily cited by the科创板日报 (STAR Market Daily), demand for mature process chips (28nm and above) is surging, driven by AI-related power management ICs, microcontrollers, sensors, and MOSFETs. This, combined with TSMC's gradual reduction of some mature process orders, has pushed capacity utilization at foundries like UMC, Powerchip, and Vanguard International Semiconductor to high levels. UMC has warned of price increases, and Powerchip is reportedly planning a 40% price hike. Both companies confirmed improving order conditions. UMC stated that if the supply-demand trend continues, price adjustments in 2027 will be more significant than in the second half of 2026. The report, citing multiple securities firms including Kaiyuan Securities, Ping An Securities, and Caitong Securities, analyzes that mature process orders are accelerating their shift to mainland China, which is becoming the primary destination for global mature process capacity expansion. TrendForce estimates that approximately 77% of new global 12-inch mature process capacity in 2026 will come from mainland China. Ping An Securities forecasts that the price increase trend for mature process foundry will extend into 2027, driven by AI-related demand and supply constraints. The report also notes that global capital expenditure by the nine major CSPs is expected to grow by approximately 90% year-on-year in 2026.
Read sourceUMC, Powerchip Plan Price Hikes as AI Drives Mature-Node Chip Demand; 2027 Rise Seen
Taiwan's United Microelectronics Corporation (UMC) and Powerchip Semiconductor Manufacturing Corp are preparing to raise prices for mature-node wafer foundry services, driven by surging demand from AI infrastructure. According to a report in Taiwan's Economic Daily News, UMC has signaled a price adjustment, while Powerchip is reportedly considering a 40% hike. The companies confirmed improving order books. UMC stated that if current supply-demand trends continue, price adjustments in 2025 will be more significant than in the second half of 2024, with a notable price increase expected in 2027. Supply chain analysts attribute the recovery not just to consumer electronics restocking but to a structural demand shift from AI, which requires large volumes of mature-node chips like power management ICs, MCUs, and sensors for every high-performance computing chip. This demand, combined with TSMC's reduction of some mature-node capacity, has tightened supply. TrendForce forecasts the price rally could extend to 2027, driven by AI-related power chip orders and capacity reallocation.
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Mature-Node Chip Demand Surge Prompts UMC, Powerchip to Mull Price Hikes
According to a report by the STAR Market Daily on the 21st, surging demand for mature-node chips such as power management ICs, microcontrollers, sensors, and MOSFETs, driven by AI spillover and TSMC's gradual reduction of capacity in certain mature nodes, has led to high capacity utilization rates and supply shortages at foundries including UMC, Powerchip (PSMC), and Vanguard (VIS). UMC has signaled plans to raise prices, while PSMC is reportedly considering price hikes of up to 40%. Both companies confirmed strong recent order intake. UMC stated that if current market supply-demand trends persist, next year's adjustments in wafer foundry prices will be more pronounced than those seen in the second half of this year. The report originates from Taiwan's Economic Daily News.
Mature-node foundry demand surge drives price hikes as China absorbs global supply shift
According to a September 21 report citing Taiwan's Economic Daily News, mature-node (28nm and above) wafer foundry demand is surging, prompting companies like UMC and Powerchip to consider price increases. The report, compiled from research by Kaiyuan Securities, Ping An Securities, and Caitong Securities, indicates that overseas mature-node orders are accelerating their shift to mainland China as clients seek price stability and capacity guarantees. TrendForce estimates that approximately 77% of global new 12-inch mature-node capacity added in 2026 will come from Chinese mainland fabs, covering 28nm, 40nm, and 55nm nodes. Ping An Securities notes that the price hike effect for mature-node foundry services is continuing, driven by AI server, general-purpose server, and edge AI demand, which is skewing capacity allocation toward AI-related products. Meanwhile, advanced-node capacity (3nm, 5/4nm) remains tight, with TSMC's 5/4nm and below capacity expected to be fully loaded through end-2026, with order visibility extending into 2027. The report also notes that global semiconductor equipment spending in 2026 is forecast to reach $165.9 billion, up 23.2% year-on-year, with funds primarily directed to advanced process capacity while mature-node expansion continues actively.
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