According to the latest wafer foundry industry research from TrendForce, the continued heavy investments in the AI sector by North American cloud service providers (CSPs) and AI startups throughout 2026 are expected to sustain strong demand for core AI chips and peripheral ICs. This demand is projected to drive the global wafer foundry industry's growth, with the annual market value anticipated to increase by 24.8% year-over-year, reaching approximately $218.8 billion. Among the major players, TSMC is forecast to experience the largest growth, with its output value expected to surge by 32%.
The demand for advanced process nodes in 2026 is primarily driven by AI GPUs from companies like NVIDIA and AMD. Furthermore, North American CSPs such as Google, AWS, and Meta, alongside AI startups including OpenAI and Groq, are actively developing their own AI chips, many of which are entering mass production and shipment phases this year. These factors are key to the growth of 5/4nm and more advanced process technologies. TrendForce observations indicate that TSMC's 5/4nm and more advanced capacity will remain fully utilized through the end of the year, while Samsung Foundry is also seeing a significant increase in orders for these nodes. Consequently, TSMC has implemented a comprehensive price increase for its 5/4nm (and below) foundry services in 2026. Given that order visibility extends into 2027, consecutive annual price hikes are a possibility. Samsung has followed suit, notifying customers in the fourth quarter of 2025 of its intention to raise prices for its 5/4nm processes.
Regarding mature processes, leading foundries like TSMC and Samsung are accelerating the reduction of 8-inch wafer production. Coupled with steady growth in demand for AI-related power management ICs, this is expected to help improve overall capacity utilization rates throughout the year. As a result, various foundries have already signaled price increases for 2026. While 8-inch demand is primarily fueled by AI-related power products and domestic demand in mainland China, and while PC/laptop ODMs initiated early stockpiling in the first half of 2026 due to memory component shortages and concerns about rising IC costs in the second half—providing some support for DDIs and CIS beyond typical industry cycles—the outlook is mixed. The utilization rates of 8-inch production lines are expected to diverge, as not all lines will operate at full capacity even with some improvement, and concerns remain about potential downward revisions in the consumer supply chain during the latter half of the year. This situation makes a comprehensive price increase for 8-inch wafers difficult.
For 12-inch wafers, mature processes at 28nm and above will continue to expand production capacity in 2026. However, consumer end markets are facing pressure from high memory prices, leading to downward revisions in shipment forecasts and resulting in limited order visibility. Although product upgrades and transitions to more advanced processes this year may improve the product mix and boost average selling prices (ASPs), the overall capacity utilization rate for 12-inch fabs is expected to fall short of full utilization for the full year, with only advanced process nodes demonstrating strong momentum.
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