Taiwan's PSMC Raises Chip Prices as AI and Auto Demand Surge

Powerchip Semiconductor Manufacturing Corporation (PSMC), A Taiwan-based Contract Chipmaker Listed As 6770 On The Taiwan Stock Exchange, Said Tuesday That Customer Orders For Its Third-quarter Logic Foundry Capacity Have Reached 1.4 Times What It Can Actually Supply. The Shortfall Is Pushing The Company To Raise Wafer Prices Again, As Demand Tied To Artificial Intelligence Servers And Automotive Electronics Spreads Well Beyond The Industry's Most Advanced Chips And Into PSMC's Older, "Mature-node" Production Lines — The 8-Inch And 12-Inch Wafer Processes Used To Make Simpler, High-volume Chips Rather Than Cutting-edge Processors.

Chairman Frank Huang (黃崇仁), President Martin Chu (朱憲國), Chief Financial Officer Jerry Shao (邵章榮) And Spokesperson Eric Tan (譚仲民) Represented The Company At An Online Investor Conference.

Chu Told Investors That PSMC's Logic Foundry Lines Remain Badly Oversubscribed. "In July, We Raised Prices For Our 8-Inch And 12-Inch Logic Foundry Wafers By About 10% To 15% — The Increase Was Applied Broadly Across The Board," He Said, Adding That Any Further Adjustment Would Depend On Supply And Demand Rather Than A Fixed Schedule, And That Shortages Could Justify Additional Hikes Later This Year.

PSMC's Capacity Utilization Stood At Roughly 87% In The Second Quarter, And The Company Expects It To Approach Full Capacity In The Third And Fourth Quarters. That Leaves Pricing And Product Mix — Rather Than Expanded Output — As The Main Levers For Improving Profitability. The Taipei Times Separately Reported That PSMC's DRAM Memory Prices Have Jumped 45% This Month Alone, With Executives Citing Structural Supply Shortages Likely To Persist Into Next Year.

The Price Pressure Is Not Confined To Memory. Demand For Power Management Integrated Circuits, Or PMICs — Chips That Regulate Voltage And Current — Has Surged As AI Servers Pack More Computing Power, And Therefore More Power-conversion Hardware, Into Each Server Rack. Automotive-grade PMIC Orders Are Recovering As Well, Further Crowding Out Capacity Once Available For Smartphones And Other Consumer Electronics.

Chu Noted That Even As 2026 Android Smartphone Shipments Have Fallen Sharply, Customer Wafer Orders Have Not Weakened In Step, Since Buyers Are Racing To Lock In Scarce Mature-node Capacity Before Prices Climb Further.

PMIC's Share Of PSMC's Overall Revenue Actually Slipped To 15% In The Second Quarter From 18% In The First, But Tan Cautioned Against Reading That As Weakness. He Said PMIC Revenue, Shipment Volumes And Average Selling Prices Are All Still Rising — The Ratio Simply Shrank Because Memory Revenue, Boosted By Steeper DRAM Price Increases, Grew Even Faster.

A Separate Supply Squeeze Is Building In Automotive Display Driver Chips — The Components That Control Instrument Clusters, Center-console Touchscreens, Passenger Entertainment Displays And Head-up Displays In Vehicles. Chu Said Demand Is Climbing As Chinese Automakers Expand Into Overseas Markets And As Vehicle Sales Grow In Other Regions, With Rising Cockpit Digitization Adding More Screens Per Car.

At The Same Time, He Said, Several Taiwanese Wafer Fabs Have Been Scaling Back Capacity Allocated To These Chips, Tightening Supply Just As Demand Rises. The Result, Chu Said, Is That Delivery Times For Automotive Display Driver ICs Are Stretching Further And The Situation Is "Growing Increasingly Severe."

Rather Than Expand Every Mature-node Product Line, PSMC Is Concentrating Resources On Segments It Sees As Higher-value: AI-server PMICs, Power Transistors Known As MOSFETs, Automotive Chips, Silicon Capacitors And Next-generation Power Semiconductors, While Scaling Back Generic Sensors And Lower-margin Driver Chips. Huang Said The Company's 8-Inch MOSFET Discrete-component Lines Are Running At Consistently High Utilization, With Demand Still Outstripping Available Capacity.

Over The Next Two Years, PSMC Plans To Shift Its Logic Chip Mix Further Toward AI And Automotive Applications. Equipment Previously Slated For The Company's Tongluo Plant In Miaoli County Will Instead Be Relocated To Its Hsinchu Facility, Replacing Aging Machinery To Boost Productivity, With The Overhaul Expected To Wrap Up By The End Of 2027.

PSMC Does Not Supply Nvidia (NASDAQ: NVDA) Directly, Huang Added, But Reaches Its AI Infrastructure Indirectly. "Our Customers Are Nvidia's Customers," He Said, Arguing That Power Management, Passive Components And MOSFETs Will Become Key Pillars Of PSMC's Mature-node Business As AI Server Demand Grows.

Looking Further Ahead, PSMC Is Working With U.S.-Based Navitas Semiconductor (NASDAQ: NVTS) To Develop 8-Inch Gallium Nitride, Or GaN, Wafer Foundry Services — A Next-generation Power Semiconductor Material — Aimed At High-efficiency Power Conversion For AI Data Centers. Huang Said Navitas' Role In Nvidia's AI Server Power Supply Chain Could Give PSMC Indirect Exposure To That Same Infrastructure Buildout. The Company Said The GaN Business Remains In Customer Qualification And Has Yet To Generate Meaningful Revenue, With Mass Production Timing Dependent On Customers' Own Certification Schedules.

PSMC Is Also Researching Silicon Photonics And Co-packaged Optics — Technology That Uses Light Rather Than Electrical Signals To Move Data Faster Within Server Racks — Through Photonic Integrated Circuits For Server Motherboards And Optical Interposers. Chu Acknowledged This Work Remains At An Early Research Stage, Far From Production Or Revenue.

Taken Together, The Moves — From PMICs And MOSFETs To Automotive Display Drivers, GaN And Silicon Photonics — Illustrate How AI-driven Demand Is Radiating Outward From The Industry's Most Advanced Processors Into The Power-delivery And Signal-transmission Hardware That Supports Them. For Now, PSMC's Growth Is Being Driven By Higher Prices And Fuller Factories In Its Existing Mature-node Business; Whether It Can Shed Its Lower-margin Foundry Reputation Over The Long Run Will Depend On How Quickly GaN, Silicon Photonics And Other Higher-value Products Clear Customer Qualification And Reach Volume Production.
（Related： Taiwan's Powerchip Rides TSMC CoWoS Overflow Into AI Packaging ｜ Latest ）

​Original Article in Chinese​