August 2, 2026, the global semiconductor market is undergoing a structural transformation. After AI chips and storage chips experienced significant increases, market funds are now turning to the previously quiet automotive chip sector. According to the latest report released by Counterpoint Research on July 31, global semiconductor sales in the automotive sector reached 18 billion US dollars in the second quarter of 2026, a 9% increase quarter-on-quarter and a 14% increase year-on-year, with power semiconductors showing particularly outstanding performance. The spot prices of IGBT and silicon carbide (SiC) modules ended the decline for four consecutive quarters, with an average increase of 5% to 8%. This marks that the semiconductor market is shifting from "single-point explosion" dominated by AI to "multi-point blooming" driven by automotive and industrial applications.
Power semiconductor prices rise, supply-demand inflection point confirmed
The report shows that automotive-grade power semiconductors are the absolute main force of this round of recovery. The spot quotation volume of IGBT modules and SiC MOSFET products from manufacturers such as Infineon and STMicroelectronics has increased significantly, and it is expected that prices will still have room for growth of 5% to 10% in the second half of the year. At the same time, the spot prices of automotive-grade MCUs have also risen rarely, with some mainstream models (such as Infineon TC3 series) increasing by 3% to 7% month-on-month in July channel quotations.
Parallel to the price increase is the further improvement of delivery cycles. The delivery period of automotive-grade MCUs has been shortened from 24 weeks at the beginning of the year to an average of 18 weeks, while the delivery period of power devices has stabilized at around 20 weeks, not lengthening due to increased demand, which shows that the supply chain is gradually self-healing. The data on both the supply and demand sides point to the same conclusion: the six-quarter-long automotive chip inventory adjustment has basically ended, and the industry has entered a new inventory replenishment cycle.
Inventory bottoming out triggers procurement boom
In the past two years, affected by the slowdown in global economic growth and the stabilization of new energy vehicle growth, the automotive chip industry has gone through a painful destocking process. IDC previously stated that global automotive chip inventory levels once rose to more than 80 days in 2025, far exceeding normal levels, leading to channel price pressure, and many chip manufacturers were forced to reduce prices to maintain volume. However, after multiple rounds of order cuts and production reductions, industry inventory has fallen below 60 days since the first quarter of 2026, with some popular sub-segments even showing signs of shortage below 45 days.
The strong rebound in demand is the direct driver of the rapid destocking. In the first half of 2026, the global new energy vehicle penetration rate exceeded 30%, and the semiconductor content per vehicle increased from 800 US dollars to 1,200 US dollars. Especially in the Chinese and European markets, the upgrade from L2 to L3 level of autonomous driving has accelerated significantly, driving the demand for cameras, radars, and high-computing SoCs, while also increasing the usage of power devices. For example, the penetration rate of silicon carbide in main drive inverters has increased from 15% last year to 25% in the first half of this year, directly stimulating the explosion of SiC device demand.
Insufficient supply elasticity, capacity expansion focuses on Southeast Asia
In the face of strong demand, the response on the supply side is relatively slow. The downturn in the past two years has caused many chip manufacturers to delay the expansion of automotive-grade production lines, and the equipment delivery time for advanced processes is still tight. Against this background, Southeast Asia has become the focus of semiconductor supply chain expansion. Singapore's Economic Development Board (EDB) announced in July that it will jointly invest with an international semiconductor materials giant to build a compound semiconductor R&D and production facility in Singapore, focusing on ensuring the material supply for automotive-grade power devices. This move is highly consistent with the global "China+1" supply chain diversification strategy, and also enhances Singapore's position in the global semiconductor map.
In terms of capacity utilization, the capacity utilization rates of major global power semiconductor manufacturers have returned to more than 90%, with automotive-grade production lines almost at full capacity. Due to the long verification cycle and high reliability requirements of automotive chips, new capacity cannot be released in the short term, and the supply shortage situation will continue at least until 2027.
Singapore's tech sector welcomes structural opportunities
As an important semiconductor trade and logistics hub in Asia, Singapore's semiconductor supply chain activities are benefiting from the recovery of automotive chips. On the one hand, the order volume of local automotive chip distributors and testing service providers has significantly increased; on the other hand, among the technology companies listed on SGX, those involved in electronic manufacturing services (EMS), precision engineering, and automated testing equipment are expected to obtain performance increments through the capital expenditure expansion of automotive electronics customers. For example, AEM Holdings, which provides automated equipment and system integration services, has its downstream customers including leading global power semiconductor IDM manufacturers, and related business demand has begun to recover.
Analysts point out that there is an essential difference between automotive chip market and AI chip market: AI chip prices are constrained by advanced packaging capacity and fluctuate greatly; while automotive chips rely more on long-term supply-demand balance and supply chain contracts. Therefore, this round of price increase cycle is generally considered more sustainable and more suitable for value investors to layout.
Investment strategy and procurement recommendations
- For purchasers: It is recommended to pay attention to long-term order locking opportunities, especially for silicon carbide and IGBT modules, and lock in 2027 capacity in advance
- For investors: You can pay attention to the targets in the SGX semiconductor sector that benefit from automotive electronics demand, and track the dynamics of Southeast Asian supply chain expansion
- For industry observers: It is necessary to be alert to the risk that if new energy vehicle sales do not meet expectations, chip prices may have a second bottom
Comprehensively speaking, the semiconductor market in the second half of 2026 will be taken over by automotive chips, especially power semiconductors, becoming the new growth engine. After the virtual AI carnival, real industrial value is returning to the real economy. As a scientific and technological hub connecting the East and the West, Singapore is at the center of this round of global semiconductor rebalancing and is worthy of continuous attention in the future.
