Wafer Foundry 'Dual-Track' Deepens: Advanced Nodes Up 10%, Mature Nodes Undercurrents

In mid-August 2026, the global semiconductor supply chain is on the eve of the traditional peak season. However, unlike past cyclical broad-based rallies, the current wafer foundry market is showing an unprecedented 'dual-track' divergence. On one hand, cutting-edge capacity represented by 2nm and more advanced processes, driven by surging generative AI and large language model (LLM) inference demands, not only maintains full capacity utilization but also recently completed a new round of price hikes, with an average increase of around 10%. On the other hand, mature processes of 28nm and above, after experiencing a two-year painful destocking, have seen overall capacity utilization recover to around 85%. Yet, quotes haven't surged across the board; instead, undercurrents are surging, presenting a complex situation of regional divergence and structural recovery.

Advanced Nodes: AI Computing Siphon Effect and the Logic Behind the 10% Price Hike

Entering H2 2026, AI data centers' thirst for computing power hasn't peaked but shows exponential growth with the deployment of multimodal large models. This demand directly transmits to foundry giants mastering advanced processes like TSMC and Samsung. Reportedly, to cope with high R&D amortization for 2nm processes and steep depreciation costs of EUV lithography equipment, top foundries have implemented 5% to 10% price hikes for core clients in Q3.

This price hike isn't simple cost-passing, but market repricing under supply-demand imbalance. Currently, AI accelerator card orders from Nvidia, AMD, and major cloud service providers (CSPs) are queued up to H2 2027. AI chips require not just the most advanced logic processes, but also matching high bandwidth memory (HBM) and advanced packaging technologies (like CoWoS). This multidimensional capacity consumption puts top foundries' advanced node capacities under extreme tension. From a semiconductor market perspective, advanced node price hikes establish the price ceiling of this AI-driven cycle, directly reshaping global tech sector earnings expectations.

Mature Nodes: End of Destocking and Undercurrents of Structural Reversal

Compared to the 'rapid march' of advanced nodes, the market for mature nodes (28nm and above) appears more tortuous. Over the past two years, due to weaker-than-expected consumer electronics recovery coupled with massive capacity expansion by Chinese mainland foundries, mature processes were mired in price wars. However, entering Q3 2026, the supply-demand landscape for mature nodes is undergoing a subtle structural reversal.

First, regarding inventory changes, channel inventories for PMICs, display driver ICs, and some mid-to-low-end MCUs have basically returned to healthy levels. With mild recoveries in smartphone and PC terminal markets in 2026, and stabilizing IoT terminal shipments, capacity utilization for mature nodes has steadily climbed from around 70% at year-start to over 85%.

However, quotes for mature nodes haven't skyrocketed across the board, but show 'surging undercurrent' structural characteristics:

• Automotive-grade chip demand rebound:With the popularization of new-gen smart connected vehicles, demand growth for automotive MCUs and analog chips far exceeds expectations. Quotes for these high-reliability products stabilized first, showing slight exploratory increases.
• Specialty process premiums emerge:Compared to standard logic processes, mature node foundries with specialty processes like RF, embedded flash (eFlash), and high-voltage driving show strong resilience in quotes due to concentrated capacity and high technical barriers.
• Regional supply-demand game intensifies:Chinese mainland foundries still hold strong cost advantages in mature nodes, while foundries in Southeast Asia and Taiwan maintain profit margins via process optimization and yield improvements, leading to divergent mature node quotes across regions.

Cost-Side Restructuring: How the End of Material Deflation Affects Foundry Pricing

When analyzing the wafer foundry market, the cost-side restructuring effect cannot be ignored. In H2 2026, the era of semiconductor material deflation ends. Particularly, silicon wafer quotes saw their first increase in three years, directly raising variable costs for foundries.

As the core substrate for wafer manufacturing, silicon wafers' prolonged low prices provided cost buffers for foundries. However, with upstream polysilicon capacity clearing and higher purity process requirements, 12-inch silicon wafer quotes rose about 3% to 5% sequentially in Q3. Additionally, costs for key chemicals like photoresists and specialty gases bottomed out and rebounded as commodity prices stabilized.

For advanced nodes, these increased costs can be easily absorbed by the 10% price hike; but for mature nodes, foundries face a 'squeezed from both ends' dilemma: upstream material costs rise, while downstream clients are extremely sensitive to price hikes. Thus, mature node foundries must lower fixed costs by improving yields, optimizing production scheduling, and introducing automated smart manufacturing systems. This cost pressure also accelerates M&A and consolidation in mature node capacities; marginal foundries lacking economies of scale will gradually be eliminated.

Valuation Restructuring Opportunities in SGX Tech and Semiconductor Sectors

As a key hub in the global semiconductor supply chain, Singapore boasts not only strong packaging/testing and specialty process foundry capabilities, but its exchange (SGX) also gathers numerous high-quality tech and semiconductor listed companies. Against the backdrop of deepening 'dual-track' wafer foundry pricing, SGX semiconductor stocks are entering a strategic window for valuation restructuring.

For tech investors in the Singapore market, the transmission mechanism of the semiconductor market needs re-examination. First, continuous price hikes and capacity expansions in advanced nodes directly benefit semiconductor equipment and material suppliers deeply integrated into global top foundry supply chains. SGX-listed precision manufacturing and semiconductor component firms, leveraging their technical expertise in vacuum pumps, precision machining, and cleanroom solutions, are enjoying dual dividends of full order books and margin expansions.

Secondly, the structural reversal in mature nodes also brings opportunities to Singapore's local specialty wafer foundries. Rather than pursuing extreme line-width shrinkage, some SGX-listed foundries focus on specialty process platforms for analog chips, mixed-signal, and power semiconductors. Driven by automotive electronics and industrial control demands, these firms' capacity utilization has rebounded significantly, and by avoiding homogeneous price wars, their gross margins are steadily recovering.

From a tech sector investment perspective, current valuation models for semiconductor ETFs and individual stocks are transitioning from traditional cyclical stock frameworks to a 'growth + cyclical' dual-attribute framework. The long-cycle boom of AI computing grants higher valuation premiums to advanced node supply chains, while mature node destocking and earnings bottoming provide investors with deterministic left-side deployment opportunities.

Semiconductor Procurement Decisions: From Cost-Oriented to Supply Chain Resilience

The divergence and restructuring of wafer quotes pose new challenges for semiconductor procurement decisions by chip design firms and terminal OEMs. In the super shortage cycle from 2019 to 2021, the core procurement strategy was 'grabbing capacity'; under the 2026 'dual-track' market, procurement strategies must shift to 'supply chain resilience and cost balance'.

For high-computing chip design firms relying on advanced nodes, facing foundries' 10% price hikes, procurement departments no longer focus solely on unit prices. They need to lock in shipment volumes for coming years via Long-Term Agreements (LTAs), and even participate in foundry capacity co-construction, to secure survival space under the AI computing siphon effect.

For consumer and industrial IC design firms relying on mature nodes, procurement decisions are more refined. Against a backdrop of overall quote stabilization, procurement staff need deep semiconductor technology tracking capabilities to identify which specialty process nodes carry price hike risks, and utilize 'dual-source or multi-source' procurement strategies to find optimal cost basins between mainland and Southeast Asian foundries. Meanwhile, establishing digital inventory management systems is crucial to avoid repeating inventory backlog mistakes caused by panic stockpiling.

Conclusion: New Investment Logic Born from Divergence

The global semiconductor market in H2 2026 is undergoing deep restructuring intertwined with the AI tech revolution and macroeconomic cycles. The deepening 'dual-track' wafer foundry system not only breaks past cyclical laws of 'all rise together, all fall together', but also draws a clear market divide between advanced and mature nodes.

Behind the 10% price hike for advanced nodes lies AI computing's ultimate extraction of transistor scaling dividends; while the surging undercurrents in mature nodes reflect traditional terminal markets' caution and structural divergence during early recovery. For investors and supply chain practitioners focusing on the SGX tech and semiconductor sectors, understanding these deep changes in supply-demand patterns, and grasping the transmission paths of wafer quotes and cost restructuring, will be the core cornerstones for formulating investment strategies and procurement decisions in the coming year. In a market of intensifying divergence, precise structural insights will create greater value than blindly chasing cyclical trends.