The chip price surge is coming on strong.
According to the latest news, TSMC In 2026, the price of advanced process technology (below 7nm) will be further increased, with the price increase expected to reach 3% to 10%. This will be the fourth consecutive year that the world's largest wafer foundry has raised prices.
All signs indicate that the global chip price surge is intensifying. According to supply chain sources, Samsung Electronics has taken the lead in suspending its October DDR5 DRAM contract pricing, prompting other memory manufacturers such as SK Hynix and Micron to follow suit. The resumption of pricing is expected to be delayed until mid-November.
In the market, SK Hynix and Samsung Electronics shares continued to rise today (November 3). By the close of the South Korean stock market, SK Hynix had surged nearly 11%, while Samsung Electronics rose over 3%, hitting a new all-time high. (A-share memory chip...) Concept stocks also collectively strengthened, with Taiji Industry among them. Shannon Chip Innovation hits daily limit up PuRan shares surged over 8% to a new all-time high. Jiangbolong surged over 14% Business Network Electronics GigaDevice Beijing Junzheng Wait for it to rise.
Big news from TSMC
On November 3, according to Taiwan's Economic Daily News, citing industry sources, TSMC has initiated annual price negotiations with its customers due to rising production costs and continued supply shortages. It is expected that the price increase for advanced processes will reach 3% to 10% in 2026.
According to sources, TSMC has notified its customers of a four-year price increase plan starting in September for advanced processes below 5 nanometers. The increase will vary depending on the individual customer's purchasing level and cooperation status. The most sought-after 3-nanometer process is expected to see a price increase of at least a single-digit percentage.
Industry insiders describe this as "the first sustained price increase since the AI era began." Looking ahead to 2026, TSMC's advanced chip manufacturing processes will face significant capacity bottlenecks, primarily due to the increasing proportion of high-performance computing (HPC) customers in the company's orders.
Analysts believe that TSMC's unprecedented move to raise prices for the fourth consecutive year, echoing MediaTek's earlier statement that it would "reflect increased costs by raising chip prices," is expected to trigger the next wave of chip price hikes.
Some organizations have pointed out that with the prevalence of global inflation, coupled with the increase in TSMC's overseas factory construction and production costs, in order to maintain high gross margins, it is estimated that TSMC's prices for processes below 5nm will increase by about 5% to 10% starting in 2026.
According to research institutions, although the price increases for individual advanced processes will vary in 2026, the overall increase will be better than this year.
Chip design companies point out that TSMC's price increase likely means it will gradually reduce the production capacity of mature processes above 7 nanometers, with AI, servers, and HPC applications being the main beneficiaries.
Industry insiders point out that TSMC will comprehensively consider factors such as the scale of customer purchases and the depth of cooperation to determine the specific price increase, ensuring that it reflects costs while maintaining stable customer relationships.
Advanced manufacturing processes have become a major driver of TSMC's growth. The 5nm and 3nm family of process technologies accounted for 60% of revenue in the second quarter of this year, and this proportion continued in the third quarter, with 3nm accounting for 23% and 5nm accounting for 37%.
TSMC has repeatedly emphasized that the company works closely with its customers to plan production capacity and invests in advanced and specialty process technologies to support customer needs, while earning appropriate compensation based on customer trust. Currently, advanced process technologies continue to be in short supply due to demand from AI applications.
Analysts believe that the growing demand for AI will drive continued growth in TSMC's revenue and profits. Foreign investors had previously revised their medium- to long-term forecasts for the company's AI application revenue upwards, originally expecting AI applications to reach 35% of total revenue by 2028, but this is now expected to be achieved earlier, this year or next.
TrendForce predicts that foundries will benefit from the demand for power management chips driven by AI and have planned a comprehensive price increase for foundries in 2026. Although the specific increase is still under negotiation, the market sentiment for price increases has already taken hold. TSMC's leading position in advanced process technology and its tight capacity provide support for its continued price adjustments.
Chip giants suspend quotations
The global chip price surge is intensifying. According to Taiwan's DigiTimes, citing supply chain sources, Samsung Electronics has suspended its October DDR5 DRAM contract pricing, prompting other memory manufacturers such as SK Hynix and Micron to follow suit. The resumption of pricing is expected to be delayed until mid-November.
The report points out that in the fourth quarter, upstream manufacturers only provided quotes to leading technology companies or first-tier cloud providers, with almost no DDR5 production capacity released to other general customers, indicating that the storage market has "completely entered a seller's market." Furthermore, the supply strategies of the three major storage manufacturers will become increasingly stringent in the future, offering quotes only to long-term customers; this also means that manufacturers not providing quotes may become the norm, forcing customers with urgent needs to turn to the spot market to secure supplies.
Industry insiders revealed that although it is now a market consensus that memory contract prices will rise in the fourth quarter, the previous expectation was that the fourth-quarter contract prices would be finalized before the end of October. However, Samsung has been reluctant to provide contract quotes, directly telling downstream customers that "there is no stock to sell," causing DDR5 spot prices to surge by 25% in just one week.
The contract prices for the fourth quarter have not yet been finalized, but the report suggests that DDR5 prices are expected to surge in three consecutive quarters from the fourth quarter of this year to the first half of next year, with each quarter seeing an increase of 30% to 50%. Based on this, the price of DDR5 16Gb could reach as high as $30 in the first half of 2026.
Industry insiders view this round of price increases as the start of a "supercycle," with AI as the core driving force and global demand for high-bandwidth memory. The demand for HBM has increased dramatically. For example, OpenAI's data center, named "Stargate." The project is expected to require up to 900,000 wafers per month.
Guotai Junan Securities It is pointed out that the storage industry has entered a new upward cycle. With the surge in demand for memory capacity for AI large model training and inference, the shortage of HBM and DDR5 memory will further spread to the entire storage industry chain.
TrendForce's latest report forecasts that in the fourth quarter, the price of general DRAM will rise by 18% to 23%, and if HBM is included, the increase will expand to 23% to 28%; it also forecasts that the contract prices of all types of NAND Flash products will rise across the board, with an average increase of 5% to 10%.
According to TrendForce analyst Chia-Yuan Hsu, as North American cloud service providers release positive DRAM demand forecasts for 2026, the overall demand for DRAM is expected to grow and prices will rise in the fourth quarter, with the momentum continuing into 2026.
TechInsights' October statistics show that the average DRAM inventory fell to 8 weeks in the third quarter, down from 10 weeks in the same period last year and 31 weeks at the beginning of 2023, indicating a rapid tightening of market supply.
Several well-known memory analysts predict that both the DRAM and NAND Flash markets are currently experiencing shortages, and industry prices are expected to rise further in the fourth quarter of this year and in 2026.
(Source: Securities Times)
