Semiconductor makers push second round of price hikes from July

More than 20 global semiconductor companies, including Texas Instruments, Infineon Technologies and STMicroelectronics, began implementing their second round of price increases in 2026 on July 1, with power chip prices rising 15% to 25% and AI server power components climbing as much as 85%.

"The cost pressure from wafer manufacturing, base metals and packaging materials has exceeded what we can absorb internally," Starpower Semiconductor said in a customer notice, announcing 15%-plus increases on IGBT and silicon carbide MOSFET modules. Starpower, Silan Micro, Yangjie Technology and CR Micro — all Chinese power semiconductor makers — issued their second price hike notices within weeks of each other, mirroring moves by their global peers.

The breadth of the increases signals a structural supply-demand imbalance rather than isolated cost pass-through. Texas Instruments, MPS (Monolithic Power Systems), STMicroelectronics and NXP all raised AI server power product prices by 20% to 85% in their first round between March and April. Now, TI, Infineon and STMicro are leading a second wave effective July 1, with Chinese domestic players following in lockstep. Silan Micro told customers its capacity remains "tight" due to surging demand from AI and new energy sectors, justifying a 15% to 25% adjustment for the third quarter.

The price surge extends well beyond power chips. DRAM prices have climbed 700% between 2022 and 2026, according to a class-action antitrust lawsuit filed June 25 against Samsung Electronics, SK Hynix and Micron Technology, which together control more than 90% of the global DRAM market. The lawsuit alleges the three companies colluded to limit consumer-grade memory supply in favor of higher-margin AI-focused production. Micron's latest quarterly revenue more than quadrupled from a year earlier, with gross margins jumping to 84.9% from 39%, while its profit surged 1,398% year over year.

The coordinated pricing power across analog, power and memory chips is generating extraordinary profits for manufacturers but raising questions about sustainability. Citi's head of US equity strategy Scott Chronert warned that rising semiconductor prices will eventually clash with hyperscalers' return on investment expectations, as Amazon, Alphabet, Meta and Microsoft — the biggest buyers of AI chips — face pressure to justify their massive capital expenditures. "The rotation out of AI hyperscalers into AI enablers has shifted investors' euphoria into semis, driving spectacular rallies," Barclays analyst Anshul Gupta wrote in a note.

For investors, the key question is whether the pricing cycle has peaked. Power semiconductor and memory makers are reporting record margins, but downstream customers — electric vehicle manufacturers, renewable energy equipment producers and data center operators — face mounting cost pressures that could eventually dampen demand. The Reserve Bank of India flagged soaring AI stock valuations globally as a financial stability risk, warning of potential market spillovers. If hyperscalers begin to push back on chip costs or slow their buildout, the pricing leverage could shift as quickly as it appeared.

This article is for informational purposes only and does not constitute investment advice.