Capacity Cuts and Surging Demand for AI Power ICs Set Stage for Mature-Node Foundry Price Increases, Says TrendForce

• The average 8-inch capacity utilization rate among the world’s top 10 foundries is projected to approach 90% in 2026, and remain above 80% through 1H27
• Foundries are reallocating 8-inch and 12-inch mature-node capacity toward power-related processes to improve ASP and profitability, benefiting Chinese foundries through order spillover
• TSMC’s planned reduction in 12-inch mature-node capacity may further drive order redistribution, creating opportunities for Tier 2 foundries to raise prices

The global mature-node supply–demand landscape is undergoing a structural shift, according to TrendForce’s latest foundry industry research. Not only have 8-inch capacity utilization and pricing stabilized and begun to rebound, but 12-inch mature-node processes are also poised to benefit from TSMC’s planned capacity cuts. This could potentially trigger order reallocation. 

Furthermore, Taiwanese foundries are shifting 90 nm-and-above high-voltage capacity toward power-related applications, indirectly benefiting Chinese suppliers and gradually fueling upward pricing momentum.

Leading foundries such as TSMC and Samsung Foundry have been reducing 8-inch capacity since the second half of 2025. However, sustained demand growth for AI servers, general-purpose servers, and edge AI applications, particularly in power management and power devices, has driven the average 8-inch utilization rate among the top 10 global foundries to nearly 90% in 2026—up significantly from around 80% in 2025. Foundries have also begun successfully passing through price increases to customers.

TrendForce expects global 8-inch capacity to remain in negative growth through the first half of 2027, while products such as PMICs and power discretes, still largely dependent on 8-inch processes, will keep utilization rates above 80%.

On the 12-inch mature-node side, nearly 70% of capacity expansion is being driven by Chinese foundries, while expansion in other regions remains relatively moderate. From a mid- to long-term perspective, the ongoing bifurcation of supply chains into“Out of China” and“Back to China” continues, alongside rapid growth in power demand from AI GPUs and XPUs. 

Foundries are increasingly reallocating capacity from DDIC and CIS production to PMIC/BCD and power discrete manufacturing as wafer consumption at 90 nm-and-above nodes rises, given the higher ASPs and margins of these segments.

With Taiwanese foundries shifting capacity and raising prices, customers in HV processes and CIS applications are increasingly turning to Chinese foundries for more stable pricing and capacity availability. This order migration has been evident since the second half of 2025, driving strong demand for 90 nm-and-above 12-inch wafers among Chinese players. For example, Nexchip, which focuses primarily on mid- to low-end DDIC and CIS, has already experienced tight supply.

TSMC’s proposed capacity reduction is an important factor influencing the supply landscape of 12-inch mature-node wafers. TrendForce notes that the company is moving forward cautiously because advanced-node customers still depend on mature-node capacity for peripheral ICs like PICs used in CPO and server BMCs. Additionally, customers with existing products need time to phase out their end-of-life items or to qualify new foundry partners. Consequently, the capacity reduction is expected to occur gradually over the next one to three years.

In the interim, as TSMC reallocates capacity and notifies customers of upcoming cuts—while VSMC capacity supported by partial process technology licensing from TSMC has yet to come online—customers are increasingly seeking support from existing foundry partners. For instance, UMC has already received increased incremental orders. Although 12-inch mature nodes are not yet in severe shortage, TrendForce does not rule out that order spillover from TSMC could prompt Tier 2 foundries to signal price increases in the second half of 2026.

TrendForce predicts the full impact of order redistribution from TSMC’s mature-node capacity adjustments to become more pronounced after 2H27, given that new product tape-outs typically require nearly a year to reach mass production. This will further tighten supply and reinforce pricing power among secondary foundries.