The semiconductor industry is witnessing a new wave of price increases driven by surging AI demand and supply-side capacity constraints, according to a research report by Kaiyuan Securities. Key segments including foundry services, memory chips, and analog chips have begun implementing price hikes. The firm’s key insights are as follows:
**Foundries: High Utilization Rates, SMIC Leads with 10% Price Increase** TSMC plans to gradually reduce mature-node capacity starting November, tightening supply. Meanwhile, robust demand from 5G, AI, and new energy sectors has kept utilization rates at SMIC and Hua Hong Semiconductor elevated. In Q3 2025, SMIC’s capacity utilization reached 95.8% (up 3.3 percentage points QoQ), while Hua Hong Semiconductor hit 109.5% and is actively expanding production. Reports indicate SMIC and Vanguard International Semiconductor have notified customers of price hikes, primarily for 8-inch BCD (Bipolar-CMOS-DMOS) platforms, with increases around 10%. BCD technology integrates power, analog, and digital signal processing, and its price rise may extend to high-voltage CMOS processes. Given strong utilization and downstream demand, other foundries with BCD capacity may follow suit.
**Memory: Tight Supply for Mainstream Products, Niche Memory Follows Trend** Per CFM data, NAND flash prices have surged 173% since late July, while DRAM prices rose 169%. Memory module suppliers report unprecedented NAND shortages, with inventory barely lasting through Q1 2026. Ingram Micro and GigaDevice have adjusted pricing for certain memory and computing chips, with GigaDevice’s DRAM contract prices continuing to climb in Q3 2025. The firm expects niche DRAM revenue to grow significantly in H2 2025.
**Analog: Overseas Giants Hike Prices, Domestic Players Poised for Growth** Analog Devices (ADI) recently announced a blanket 15% price increase effective February 2026, citing rising costs. Earlier, Texas Instruments (TI) raised prices by 10–30% in Q3. While industrial and automotive demand recovers slowly, AI data centers are driving demand for high-power analog chips. Kaiyuan anticipates domestic analog chip prices and demand to rise in 2026, supported by recovering downstream sectors and sustained AI investments.
**Beneficiaries**: 1) Foundries: SMIC, Hua Hong Semiconductor; 2) Memory: Jiangbolong, Demingli, Biwin Storage, Shannon Semiconductor, GigaDevice, Puya Semiconductor, Ingram Micro; 3) Analog: SG Micro, Novosense, 3PEAK, Southchip, AWINIC, Joulwatt.
**Risks**: Slower-than-expected AI adoption, global trade uncertainties, macroeconomic headwinds.
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