A supply-demand mismatch in older semiconductor nodes, fueled by the artificial intelligence boom, is setting the stage for price increases in foundational chips for the first time in years.
A brewing price hike is poised to ripple through the market for mature semiconductor manufacturing processes, potentially ending a period of falling prices and signaling a structural shift in the chip supply chain. The industry is facing a confluence of planned production cuts by major foundries and a relentless, broad-based surge in demand for components essential to the artificial intelligence buildout, according to a new report from TrendForce.
“The global mature process is facing a shift in supply and demand,” the TrendForce report said. The research noted that not only have capacity utilization and prices for 8-inch wafers already stopped falling, but that the atmosphere for price increases is “gradually emerging,” particularly as some foundries shift capacity to serve power-management orders.
This shift is driven by two primary factors: constrained supply, as major players like TSMC reportedly plan to reduce output of mature 12-inch wafers, and booming demand that extends far beyond the headline-grabbing AI accelerator chips. The trend is expected to benefit foundries specializing in these older but critical nodes, with the report specifically highlighting that the “mainland China supply chain has benefited.”
The potential for higher costs on foundational chips comes as the wider market grapples with what’s at stake: a potential margin squeeze for a vast array of electronics manufacturers, but a significant revenue opportunity for a select group of foundries and a burgeoning class of Chinese equipment suppliers.
The AI Demand Engine Fires on All Cylinders
The demand for AI is creating a tidal wave of investment that lifts all boats in the semiconductor harbor, not just the most advanced ships. While Nvidia (NVDA) and Advanced Micro Devices (AMD) have seen their stocks soar on booming sales of cutting-edge AI GPUs, the demand extends to a vast ecosystem of supporting chips. This includes everything from power management ICs and display drivers to the CPUs that orchestrate data center workloads, many of which are built on mature process nodes. Intel (INTC), for example, is seeing a revival in its data center business, with its Xeon 6 processors set to be the primary CPU in Nvidia’s own next-generation DGX Rubin AI servers.
The sheer scale of the AI infrastructure buildout is staggering. Sterling Infrastructure (STRL), a company that builds data centers and manufacturing plants, reported a record first quarter with a combined backlog swelling to $5.2 billion. That backlog includes a new contract for the first phase of a multi-phase semiconductor campus valued at over $500 million, illustrating the immense capital pouring into expanding chip production capacity. This physical expansion translates directly into sustained, long-term demand for a wide variety of chips.
A Shifting Supply Landscape
While demand soars, the supply side is undergoing a significant transformation, particularly in the mature node segment. According to data from The Information Network, Chinese semiconductor equipment vendors like NAURA, AMEC, and ACM Research (ACMR) have seen their collective global market share grow from just 1.2% in 2021 to 6.5% in 2025. While still small, their revenue growth of 30.5% in 2025 dramatically outpaced the 9.3% average for their non-Chinese competitors.
This shift is being accelerated by U.S. sanctions, which have pushed China to develop its domestic semiconductor industry. While restricted from acquiring the most advanced EUV lithography machines from ASML, Chinese fabs can still purchase DUV immersion systems. The sale of a single DUV system creates a multiplier effect, requiring dozens or even hundreds of other tools for etching and deposition to complete the manufacturing process. Chinese equipment suppliers are increasingly filling this demand for mature and mid-critical nodes, capturing a larger share of the equipment sales within their own borders, which fell from 75% imports in 2021 to 65% in 2025.
For investors, the key takeaway is that the AI boom's impact is far broader than just a few high-flying chip designers. The rising prices in mature nodes represent a significant opportunity for foundries with trailing-edge capacity and the rapidly growing cohort of Chinese equipment manufacturers. While potentially a headwind for some downstream electronics companies, this trend highlights a profitable and often-overlooked segment of the semiconductor value chain that is directly benefiting from the AI gold rush.
This article is for informational purposes only and does not constitute investment advice.
