AI Demand Stacking with Price Increases: Top 10 Wafer Foundries' Output Value Grows Over 26%

Securities Times Reporter Ruan Runsheng

Driven by the surge in AI demand and rising prices, the global wafer foundry industry’s output value continues to grow. According to the latest wafer foundry industry statistics from TrendForce, in Q4 2025, the top ten global wafer foundries will collectively see a quarter-on-quarter increase of 2.6%, reaching approximately $46.3 billion; for the full year 2025, the combined output value of the top ten foundries is about $169.5 billion, a 26.3% annual increase, setting a new record. Additionally, memory chip output value has already exceeded twice that of wafer foundries.

Average Selling Price Increases

As the leader in wafer foundry, TSMC’s wafer shipments in Q4 2025 slightly declined, but shipments of flagship smartphones like the iPhone 17 boosted 3nm wafer demand, raising the overall average selling price. Quarterly revenue increased by 2% to $33.7 billion, helping the company maintain a 70.4% market share and stay in first place.

Samsung Foundry (excluding System LSI) saw revenue growth in Q4 2025 driven by shipments of 2nm new products, and the start of logic chip wafer production for its HBM4 memory modules, alleviating the slight decline in overall capacity utilization. Revenue rose 6.7% quarter-on-quarter to nearly $3.4 billion, turning a profit from losses, with market share slightly increasing from 6.8% to 7.1%, ranking second.

SMIC’s market share ranks third. In Q4 2025, the company’s revenue grew 4.5% quarter-on-quarter to nearly $2.49 billion, mainly driven by increased wafer shipments, slightly higher average selling prices, and higher mask set shipments at year-end. The company’s financial report also shows that SMIC’s Q4 last year was “not a slow season,” with total sales revenue of $2.489 billion, with wafer revenue up 1.5% quarter-on-quarter, and both the number of wafers sold and average price slightly increased.

Furthermore, Huahong Group ranks sixth. Its subsidiary Huahong Hongli’s revenue in Q4 2025 was driven by MCU and PMIC demand, increasing 3.9% quarter-on-quarter. After consolidating Shanghai Huali, Huahong Group’s revenue approached $1.22 billion, up 0.1% quarter-on-quarter.

In contrast, Jingji Integration, ranked ninth, saw a 5.3% quarter-on-quarter decline in Q4 2025 revenue to $388 million, mainly because the company has achieved its shipment and revenue targets for 2025, postponing some product shipments to Q1 2026. During recent industry research and exchanges, Jingji Integration’s executives stated that some of their products’ foundry prices have already been increased. The company plans to actively respond to market changes by optimizing product structure, improving operational efficiency, and expanding application fields, while developing reasonable pricing strategies based on customer needs and market dynamics.

Notably, Gaotou Semiconductor moved up to seventh place in market share, mainly due to steady growth in shipments of silicon photonics, silicon-germanium, and other niche server-related applications, with revenue increasing 11.1% quarter-on-quarter to $440 million.

In the secondary market, SMIC’s A-shares have risen nearly twofold since September 2024, with some decline in the first quarter of this year; Huahong’s stock surged up to 4.56 times; Jingji Integration’s stock also doubled.

Capacity Utilization Under Pressure

Overall, in Q4 2025, advanced process technology continued to benefit from the strong demand for AI Server GPUs and Google TPUs, with supply shortages. The launch of new smartphones also drove the production of main chips, resulting in excellent shipment performance. In mature processes, server and edge AI power management orders maintained high utilization of 8-inch fabs, with some even considering price increases. Meanwhile, 12-inch capacity utilization remained roughly flat, contributing to the quarter-on-quarter growth of the top ten wafer foundries’ total output value. Looking ahead to 2026, TrendForce expects some consumer products to stock up early in the first half, stabilizing capacity utilization. However, soaring memory prices are expected to put pressure on mainstream terminal shipments and demand, casting a shadow over the second half of the year with potential order and capacity utilization concerns.

Regarding the impact of memory price increases, SMIC’s co-CEO Zhao Haijun stated at the earnings briefing that strong AI demand for storage chips has squeezed supply for mobile phones and other applications, especially in the mid-to-low-end segments, causing terminal manufacturers to face shortages and rising prices. This price transmission and cost absorption will likely pressure demand for terminal products. Therefore, it is expected that wafer foundries will see a decrease in mid-to-low-end orders, while orders related to AI, storage, and mid-to-high-end applications will increase.

SMIC’s guidance for Q1 2026 indicates that sales revenue is expected to remain flat quarter-on-quarter, with gross margin estimated between 18% and 20%.

Market institutions have issued warnings about a severe contraction in the mobile phone market.

According to Counterpoint Research, due to reduced supply of memory chips, the smartphone market will experience a major reversal in 2026, with shipments expected to decline by 12.4% year-on-year to less than 1.1 billion units—the most severe annual shrinkage in history—and this trend is expected to extend into 2027, disrupting OEM product mixes and delaying new product launches industry-wide. In contrast, the high-end smartphone market is expected to be more resilient, possibly even experiencing single-digit growth.

AI-Driven New Cycle

Benefiting from the AI boom, both memory and wafer foundry output values are projected to hit new highs in 2026. According to TrendForce, the memory industry’s output value will expand significantly to $551.6 billion due to tight supply and soaring prices, while wafer foundry output will reach $218.7 billion. Memory output value has already surpassed twice that of wafer foundries. Historically, the last supercycle for memory chips occurred from 2017 to 2019, driven mainly by cloud data center construction, with memory output significantly outpacing wafer foundry. In this cycle driven by AI demand, shortages are more widespread. As AI shifts from model training to large-scale inference, emphasizing real-time response and data access efficiency, server-side demand for high-capacity, high-bandwidth DRAM continues to grow, with capacities per machine also increasing.

Additionally, Nvidia’s promotion of the Vera Rubin platform has strengthened the demand for high-performance storage, increasing the importance of enterprise SSDs. To balance token generation performance and cost, industry players are accelerating the adoption of large-capacity QLC SSDs to handle massive data access.

Meanwhile, customer demand has also changed significantly. Unlike the past, when end users dominated, this memory procurement surge is driven by cloud service providers, whose purchasing volume has grown exponentially and are less sensitive to prices, leading to record-breaking price increases that surpass the previous supercycle.

(Edited by Zhao Yanping HF094)