Summary: Latest data shows global wafer foundry capacity utilization rebounded to 85% in June 2026, mature process utilization hit 90%, stabilizing wafer pricing. This article analyzes supply-demand factors behind the rebound, explores impact on semiconductor market, foundry sector and investment strategies, and focuses on SGX chip stocks.
Capacity Utilization Rebounds from Trough, Mature Process Leads Recovery
According to the latest data released by SEMI on July 28, global wafer foundry capacity utilization rebounded to 85% in June 2026, up 5 percentage points from 80% in Q1 2026. Mature process (28nm and above) utilization reached 90%, nearing full capacity. This marks the bottoming of the foundry industry correction cycle since H2 2025, with significantly eased production line idle pressure.
The rebound concentrated on mature process products like driver ICs, power management ICs, and some automotive MCUs. Q2 earnings of major foundries such as TSMC, UMC, and SMIC showed their mature process order visibility extended to over 12 weeks, up from 8-10 weeks in Q1. UMC's co-CEO said: "The inventory correction cycle is near its end, with demand from consumer electronics and industrial sectors recovering modestly." Meanwhile, advanced process (7nm and below) utilization remained above 95%, supported by AI chips and HPC demand, but new capacity is limited.
Wafer Pricing Stabilizes, IC Market Inflection Point
With utilization rebound, wafer pricing showed first stabilization signals after three consecutive quarterly declines. According to industry pricing platforms, July 2026 average 8-inch foundry prices were flat MoM, while 12-inch mature process prices edged up 1-2%. Procurement managers at IC design firms reported: "Foundries have stopped discount promotions; some tight part numbers are even testing price increases." This directly impacts downstream chip supply chain inventory strategies. Previously, IDMs and distributors delayed purchases expecting further price drops; now restocking demand is emerging, and the semiconductor inventory cycle may shift from "de-stocking" to "re-stocking".
SGX Chip Stocks Active, Investors Eye Local Supply Chain Resilience
The positive signal of utilization rebound also reached the SGX semiconductor sector. On July 28, the SGX Semiconductor Index closed up 2.3%, outperforming the broader market. UMS Holdings (SGX: UMS), a key wafer equipment parts supplier, rose 3.5% in a single day to a nearly six-month high. AEM Holdings (SGX: AEM) gained 2.8% on test equipment order recovery. Analysts note Singapore's local semiconductor supply chain focuses on equipment manufacturing and assembly/test, closely tied to foundry utilization. As global foundry utilization recovers, local companies' order visibility improves and earnings expectations are raised.
Additionally, the SGX-listed semiconductor ETF—iShares SG Semiconductor ETF (ticker: SEMI)—recorded net inflows of about SGD 12 million in the past week, indicating institutional funds are positioning. The market generally believes the foundry cycle may have bottomed early, driving valuation recovery across the semiconductor sector.
Industry View: Balance Needs Time, But Worst Is Over
Despite the encouraging utilization recovery, full supply-demand balance still needs time. SEMI reports that the current rebound relies on urgent orders and fragmented demand, not yet a sustainable long-term order wave. Global chip inventory remains about 15% above historical average, with consumer electronics end-demand recovery being key. Geopolitical risks continue to affect semiconductor trade flows; US export restrictions on China have shifted some mature process capacity to Southeast Asia, where fabs in Singapore and Malaysia saw higher utilization increases than the global average.
From an investment strategy perspective, analysts recommend focusing on the "dual elasticity" of the foundry sector: on one hand, mature process utilization recovery directly benefits foundries like UMC and SMIC; on the other, equipment/material suppliers and assembly/test firms will benefit from downstream expansion. For SGX investors, UMS Holdings, AEM Holdings, and Cadence Design Systems (SGX-listed DR) are worth tracking. Near-term attention should be on TSMC's July earnings call; its capex plan will influence expectations for advanced process.
Outlook: Industry Prosperity Expected to Improve in H2
Looking ahead to H2 2026, multiple research institutes raised their full-year semiconductor market growth forecasts. Gartner's latest report revised 2026 semiconductor revenue growth from 12% to 15%, driven by structural demand from AI, automotive electronics, and industrial automation. The foundry sector, as a bellwether of the semiconductor supply chain, with continued utilization recovery, is expected to stabilize overall chip prices, pulling the semiconductor market out of its bottom. SGX-listed semiconductor companies are expected to deliver QoQ improved results in Q3 earnings, injecting confidence into the global chip industry.
