Summary: In H2 2026, the global foundry market shows significant divergence. AI drives continuous full capacity and accelerated expansion in advanced nodes, while mature nodes face deep integration and M&A due to slow consumer electronics recovery. Top foundries like TSMC, Samsung, and SMIC show fundamental divergence in capacity allocation and pricing strategies. The global semiconductor supply-demand landscape is restructuring, bringing chip pricing logic to a new turning point.
In August 2026, the global semiconductor industry entered a critical window. As major foundries disclosed their Q2 2026 financial reports and H2 capacity guidelines, an undeniable trend surfaced: global foundry capacity is undergoing unprecedented structural divergence. On one hand, advanced node (7nm and below) capacity, dominated by AI computing demand, remains fully loaded, even facing severe shortages, forcing top foundries to accelerate capex for expansion. On the other hand, the mature node (28nm and above) market, against the backdrop of slower-than-expected consumer electronics recovery, is trapped in deep overcapacity, price wars, and M&A consolidation. This stark contrast is fundamentally restructuring global semiconductor supply-demand and chip pricing logic.
Advanced Nodes: AI Computing Surge Creates "Structural Shortage", Foundries Initiate Asymmetric Pricing
In H1 2026, computing demand for generative AI and large model training did not slow down; instead, it exceeded expectations again due to the popularization of multimodal large models and the explosion of inference-side computing demand. This directly led to tight capacity in advanced packaging technologies like HBM and CoWoS, further transmitting pressure to upstream advanced node foundry links.
As the absolute leader in advanced nodes, TSMC's capacity utilization rate in H2 2026 approached the limit of 110%. After initial yield ramp-up, its 3nm process has fully penetrated smartphones, AI accelerator cards, and high-end server processors; while its 2nm trial production was also accelerated due to urgent customer tape-out needs. According to industry supply chain feedback, TSMC officially notified core clients like Nvidia and AMD in Q3 2026 of plans to raise advanced node foundry quotes by 5% to 10% in 2027. This is the largest price hike for advanced nodes since the semiconductor downturn cycle in 2023. This price increase is not rolled out comprehensively but shows clear "asymmetry"—the highest hikes target computing chip and high-end AI PC chip clients, while quotes for general consumer electronics clients remain relatively stable. This pricing strategy reflects that advanced nodes have shifted from "economies of scale" to "value pricing", with AI computing premiums transferring to the wafer manufacturing side.
Meanwhile, Samsung Foundry and Intel Foundry Services (IFS) also clearly tilted their strategic focus toward advanced nodes in H2 2026. Samsung attempted to snatch some non-Nvidia AI chip orders through its 2nm Gate-All-Around (GAA) process, while Intel actively sought orders from external AI chip startups to fill its advanced node capacity. However, limited by yields and ecosystem barriers, these two manufacturers still struggle to shake TSMC's dominance in the short term. The "structural shortage" in advanced nodes not only drives up foundry costs but also further concentrates global semiconductor capex toward a few giants mastering advanced nodes.
Mature Nodes: Weak Demand Intertwined with Overcapacity, Industry Enters Deep Phase of M&A Consolidation
In stark contrast to the advanced node boom, the mature node market is experiencing a harsh winter in H2 2026. Although chip demand in automotive electronics and industrial control showed some stabilization after a long destocking cycle, replacement demand recovery in traditional consumer electronics like smartphones and PCs remains sluggish, unable to effectively digest the mature node capacity massively expanded over the past three years.
Particularly in the Chinese mainland market, with several 12-inch fabs successively put into operation between 2024 and 2025, the supply of 28nm to 55nm processes surged. This directly led to continuous pressure on mature node foundry quotes. According to data tracked by relevant market research institutions, in Q2 2026, foundry prices for some mature node nodes fell by over 15% compared to their 2024 peak, even approaching the cash cost line of some foundries. Facing severe supply-demand imbalances, capacity utilization divergence among mature node foundries intensified: top enterprises like SMIC barely maintained utilization around 80% relying on scale effects and deep client bases; while some second- and third-tier foundries saw utilization drop below the 60% warning line.
Against this backdrop, the global mature node market officially entered a deep phase of M&A consolidation in H2 2026. Capital-strong semiconductor enterprises began utilizing the cycle bottom to integrate resources. We observed multiple recent acquisitions targeting mature node foundries and specialty process lines. This integration aims to restore supply-demand balance by shutting down inefficient capacity and optimizing line configurations. Additionally, to escape homogeneous price wars, an increasing number of mature node foundries are transitioning to specialty processes, such as developing wide-bandgap semiconductor foundry platforms like SiC and GaN, as well as focusing on differentiated processes for analog chips, mixed-signal, and embedded memory.
Semiconductor Supply-Demand Restructuring: Evolving from "Unipolar Drive" to "Dual-Track Operation"
The severe divergence in foundry capacity in H2 2026 marks the evolution of the global semiconductor supply-demand relationship from past "unipolar drive" to "dual-track operation". This restructuring has profound impacts on procurement decisions, inventory management, and investment logic across the entire chip industry chain.
1. Rebalancing Procurement Decisions and Supply Chain Security
For chip design companies, the divergence between advanced and mature nodes means supply chain management strategies must be refined. In advanced nodes, due to scarce capacity and extended lead times, clients must not only pay higher foundry premiums but also place long-term orders further in advance, even locking capacity through advance payments. This further increases financial pressure on AI chip design companies, significantly raising industry entry barriers.
In mature nodes, due to obvious buyer's market characteristics, purchasers have more initiative in pricing negotiations. However, continuously low prices also bring hidden dangers to supply chain stability. Some foundries hovering on the edge of loss may face risks of sudden line shutdowns or stagnant process iteration. Therefore, while pressing down foundry quotes, large IC design companies also began concentrating orders toward financially more robust and capacity-wise more flexible top foundries to avoid potential supply cutoff risks from second-tier foundries.
2. Inventory Cycle Lengthened, Structural Divergence Replaces Global Fluctuation
Traditional semiconductor inventory cycles typically manifest as industry-wide simultaneous ups and downs. However, under the new 2026 landscape, inventory cycles show clear structural divergence. Advanced nodes, being at the starting point of an AI super cycle, are basically in a "zero inventory" state, even exhibiting a phenomenon where "capacity is inventory"; while mature nodes, due to excessive earlier expansion, remain in a slow destocking phase. This divergence lengthens the industry-wide inventory cycle, and future semiconductor market fluctuations will manifest more as structural rotations among different sub-sectors and process nodes, rather than global prosperity and recession.
3. Capex Shows a "Barbell" Distribution
From the capex structure of fabs, funds are showing a clear "barbell" distribution: on one end, massive capex tilted toward advanced nodes and advanced packaging (like HBM substrates, CoWoS); on the other end, upgrade investments toward specialty processes and third-generation semiconductor lines. Meanwhile, capex for standardized mature logic processes in the middle is drastically cut. This capex distribution will profoundly impact the order structure of global semiconductor equipment over the next three to five years.
Investment Implications for the Singapore Exchange (SGX) Semiconductor Sector
As a vital hub in the global semiconductor supply chain, Singapore gathers numerous top chip manufacturing, packaging & testing, and equipment & materials enterprises. Against the backdrop of extreme divergence in global foundry capacity, the investment logic for the SGX semiconductor sector is also undergoing restructuring.
For semiconductor equipment and materials suppliers listed on SGX, their performance drivers will diverge. Equipment vendors serving advanced nodes (such as those providing supporting materials for EUV lithography and advanced node cleaning equipment) will continue to enjoy performance dividends brought by AI computing expansion; while equipment vendors highly dependent on mature node expansion must face pressures of shrinking orders and extended account periods, and their investment value will depend more on their ability to transition to advanced packaging or specialty process equipment markets.
In the wafer manufacturing and packaging & testing segments, local Singapore semiconductor enterprises, leveraging their deep accumulation in specialty processes (like analog chips, power management chip foundries) and advanced packaging, show strong counter-cyclical capabilities. Facing price wars in mature nodes, these enterprises effectively smoothed the impact of price fluctuations on gross margins by enhancing process value-added and binding high-stickiness clients. In the current deep phase of industry M&A consolidation, SGX semiconductor targets with abundant capital and bottom-valued estimates are expected to become potential M&A targets or active acquirers in industry integration, bringing event-driven trading opportunities for investors.
Overall, the divergence in the global foundry market in H2 2026 is not merely a manifestation of cyclical fluctuations, but an inevitable result of the underlying logic restructuring of the semiconductor industry. Investors and industry participants must abandon "one-size-fits-all" cyclical thinking and deeply analyze the supply-demand context of different process nodes and sub-application markets, in order to accurately seize the initiative in investment and procurement decisions amid this structural upheaval in the semiconductor market.
