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Backed by massive subsidies, China's equipment makers have made gains in mature nodes and initial inroads into advanced processes, but ecosystem gaps and geopolitics cap long-term growth.
Samsung accelerates the reduction of mature capacities while hiking prices on fully-loaded advanced nodes. Meanwhile, benefiting from supply shifts and early stocking against rising component costs, Chinese foundries maintain high utilization in mature nodes, triggering price hikes for tight capacities. Simultaneously, driven by the localization trend, major Chinese players are actively expanding new fabs.
Driven by strong demand, TSMC accelerates global expansions for advanced nodes and packaging; UMC pushes joint-node sampling despite delays and develops silicon photonics; Vanguard comprehensively raises prices and evaluates overseas expansion; PSMC optimizes profits via memory partnerships, line consolidation, and price hikes.
Driven by robust AI demand, 2026 foundry revenue is set to grow significantly. Advanced nodes and packaging capacities are fully loaded, leading to price hikes. Meanwhile, 8-inch capacity is tightening due to strategic production cuts and rising AI power IC demand. In contrast, 12-inch mature nodes remain weak due to soft consumer electronics market, resulting in a highly polarized industry landscape.
Driven by AI and new smartphone momentum, 2025 global foundry revenue hit record highs, with TSMC extending its market lead via advanced processes. For 2026, despite pre-stocking triggered by anticipated price hikes, AI remains the primary growth engine, while the sustainability of 2H consumer demand warrants close monitoring.
Market outlook diverges: Samsung accelerates US expansion despite yield risks. Rising memory costs slow SMIC and Nexchip, while AI orders boost HuaHong. GlobalFoundries significantly increases capex for localization in US and EU.
AI fuels HBM/storage price hikes, pushing Memory revenue past Foundry. While weak mature nodes and capacity barriers slow Foundry, Memory's output efficiency and price volatility drive its market dominance through 2026.
Samsung rebounds via advanced nodes and US fab restart. SMIC and Nexchip enhance HV tech amid pricing pressure. HuaHong optimizes fab allocation. Smaller foundries slow expansion due to technical hurdles, showing a market split between advanced and mature nodes.
AI drives TSMC's expansion and upgraded targets. Vanguard sees rising utilization and prices via power ICs. UMC grows steadily, while PSMC rebounds through memory demand.
Driven by accelerated 8-inch capacity cuts by TSMC and Samsung, coupled with rising demand for AI power components and panic stocking across the supply chain, the global supply-demand structure for 8-inch wafers is tightening. This significant rebound in utilization rates has prompted major Chinese, Korean, and Taiwanese foundries to initiate price hike strategies.
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