The global wafer foundry price hike wave is accelerating and spreading. Following Taiwan Semiconductor's announcement of a price increase of up to 15% for its 3-nanometer nodes, United Microelectronics Corporation (UMC) has announced it will follow suit, planning to selectively raise prices by approximately 10% in the second half of 2026 and initiate comprehensive renegotiations in 2027, with further increases possible. High construction costs for its Singapore fab and rising raw material prices are the primary drivers, pushing foundry pricing cycles systematically upward and making cost pressures on downstream chip design clients unavoidable.
The global foundry industry is experiencing a new wave of price increases. Following reports that Taiwan Semiconductor plans to raise its 3-nanometer pricing by up to 15% in the second half of the year, United Microelectronics Corporation (UMC), Taiwan’s second-largest foundry, has announced it will follow suit, implementing price hikes in phases that could extend into 2027.
According to a TrendForce report on Thursday, UMC Chief Financial Officer Chitung Liu stated at the company’s shareholders’ meeting that UMC plans to selectively increase prices for certain products in the second half of 2026 and will initiate broader customer price negotiations in 日晚间, potentially leading to even larger increases. UMC cited rising raw material costs and higher construction expenses for its Singapore fab compared to Taiwan as the primary drivers behind this pricing adjustment.
Earlier, TechNews reported in April, citing customer notifications, that UMC had already planned to adjust wafer prices by approximately 10% in the second half of 2026, with the earliest possible implementation in July. The successive price hike signals from these two major foundries indicate a systemic upward shift in the foundry industry’s pricing cycle, which will consequently increase cost pressures on downstream chip design customers.
UMC’s Price Increase Roadmap: Selective Initially, Then Comprehensive
According to Chitung Liu, UMC’s current price increase strategy features a clearly defined phased approach. The price adjustments in the second half of 2026 will be primarily 'selective,' targeting new orders, new process nodes, and newly expanded capacity, with relatively limited magnitude; prices under existing long-term contracts will remain unchanged. In 2027, the company will pursue more comprehensive price negotiations, with potentially larger increases.
This strategy somewhat mitigates the immediate impact on existing customers while creating room for UMC to gradually reestablish pricing power in new business negotiations. UMC explicitly cited high construction costs in Singapore and rising raw material prices as justifications for the price adjustments, providing a cost-based rationale for the hikes.
While citing high Singapore fab construction costs as one reason for the price increase, UMC is simultaneously accelerating its expansion plans in Singapore. The new Singapore facility will focus on 22/28-nanometer nodes and specific specialty processes, with an initial planned monthly capacity of approximately 12,000 wafers, potentially expandable to 18,000 wafers. The new capacity is expected to ramp up gradually starting in 2026, though volume production may be delayed until 2027.
Notably, silicon photonics, advanced nodes, and advanced packaging technologies are also being considered in UMC’s Singapore expansion roadmap. UMC plans to double its interposer capacity from 3,000 to 6,000 wafers per month to better meet customer demand. The higher capital expenditures and operating costs associated with building the Singapore fab constitute a direct source of cost pressure driving UMC’s current round of price increases.
Systemic Upward Shift in Foundry Pricing Cycle
UMC’s decision to follow with price increases comes against the backdrop of Taiwan Semiconductor having already issued strong pricing signals on the advanced node front. According to Taiwan’s Commercial Times, citing supply chain sources, Taiwan Semiconductor plans to raise its 3-nanometer process pricing again in the second half of 2026 by up to 15%, with a further potential increase of 5% to 10% in 2027.
On the demand side, cloud computing giants such as NVIDIA, AMD, Google, and AWS are rapidly ramping up adoption of 3-nanometer technology, with strong concurrent demand for AI accelerators, customized ASICs, and flagship smartphone chips driving sustained full utilization of 3nm capacity. On the supply side, rising costs of overseas fab construction, increased depreciation pressure, and still-climbing yields in the initial mass production phase of 2nm technology all support this price increase. The market expects this move will help Taiwan Semiconductor maintain its gross margin performance.
Taiwan Semiconductor and United Microelectronics have successively signaled price increases, indicating a structural shift in the pricing cycle of the wafer foundry industry. Downstream chip design companies—whether AI chip clients using Taiwan Semiconductor’s advanced nodes or consumer electronics and industrial chip clients relying on United Microelectronics’ mature nodes—face higher foundry costs, which may be partially passed through to end-product pricing.
Editor/Lambor