HBM Demand Squeeze Pushes Up Prices for Mature-Process Chips
Mature-process (older-technology) semiconductors are running short. The shortage stems from manufacturing capacity being redirected toward the production of high-bandwidth memory (HBM) for artificial intelligence (AI). Riding this wave, Taiwanese foundry Powerchip Semiconductor Manufacturing Corp. (PSMC) posted a net profit of NT$6.5 billion (about 264 billion won) in the third quarter of 2026, up 338% from a year earlier. As global leading manufacturers concentrated cleanroom and wafer production capacity on high-value-added memory such as HBM, output of legacy-spec memory shrank, with PSMC singled out as a substitute production base — a key driver of its earnings rebound.
The benefit of higher unit prices is only just beginning. Because production costs are set at the time wafers are loaded into the line, the average selling price of wafers finally shipped in the third quarter was more than 30% lower than that of newly loaded wafers. PSMC President Martin Chu said the price increases will be reflected in full in fourth-quarter results, meaning the growth could widen.
The supply crunch has spread to logic foundries as well. According to the earnings release, the average selling price of 8-inch and 12-inch logic wafers loaded in the third quarter rose 8-10%. With utilization rates approaching their limits, the company has resolved to raise 2027 prices by an additional 10-20% and has entered negotiations on long-term supply agreements that lock in prices and volumes in advance.
Ripple effects are also visible in the NAND and NOR flash markets. As single-level-cell (SLC) NAND supply tightened, PSMC shifted its SLC foundry process to 24 nanometers. Demand is growing from AI servers, which carry 3-5 times more NOR flash per system than ordinary servers — and PSMC holds the only NOR flash contract-manufacturing lines outside China, which has worked in its favor.
Some 80% of the company's 2027 capacity for MOSFET and insulated-gate bipolar transistor (IGBT) lines is already committed under long-term contracts, while its gallium nitride (GaN) semiconductors have entered small-scale production ahead of final customer validation. A collaboration with U.S.-based Micron on 1-pitch (1p) DRAM is set to wrap up the process design kit by late 2026, bring in equipment in the first quarter of 2027, and begin pilot production in the second quarter.
