July Semiconductors: AI Demand Drives Global Price Surge, Foundry and Memory Markets Rise Together

In July, the global semiconductor market demonstrated strong growth momentum driven by robust demand for artificial intelligence (AI), achieving record-high sales. According to data from the Semiconductor Industry Association (SIA) of the United States, global semiconductor sales in May 2026 exceeded $120 billion for the first time, representing a year-on-year increase of 104.1%.

Meanwhile, amid continuously rising costs of raw materials, equipment, and electricity, major wafer foundries have launched a new round of price hikes. TSMC has begun discussions with customers regarding a comprehensive price adjustment scheduled for early 2027. The base price increase for both advanced and mature process nodes is expected to range from 5% to 10%. For additional orders of high-performance computing (HPC) chips, an extra premium of 10% to 15% may be applied, potentially pushing the total price increase for some orders as high as 25%.

Samsung Electronics has raised quotations by approximately 15% for new customers on popular process nodes such as 4nm, 5nm, and automotive-grade 8nm. Powerchip also demonstrated strong pricing power in July, sharply increasing DRAM foundry processing fees by 45% and simultaneously raising logic foundry prices by 10% to 15%. Powerchip expects the benefits of this price hike to reflect in gross margins and revenue from November to December, driving stepwise growth in performance.

Memory markets see rising volumes and prices, but the pace of increase is moderating.

The memory industry has experienced price increases for three consecutive quarters, with multiple indicators setting new historical records. According to institutional forecasts, DRAM contract prices in Q3 2026 are expected to rise 13% to 18% quarter-on-quarter, though the increase has somewhat narrowed due to weakening consumer demand.

For NAND Flash, supported by AI inference and data center demand, Q3 contract prices are estimated to increase 10% to 15% quarter-on-quarter. Notably, due to capacity displacement, the supply-demand gap for SLC NAND has widened, potentially leading to price increases of 120% to 170% in the second half of the year.

Smartphone and end-device costs are expected to rise.

Upstream cost pressures in the semiconductor sector are rapidly being passed down to downstream products. Qualcomm has announced a double-digit percentage price increase for its entire chip lineup starting in September, and MediaTek also has a related pricing plan. Industry forecasts suggest this will directly push up the selling prices of Android flagship smartphones in the second half of the year.

Corporate strategies and policy developments.

To meet long-term demand, TSMC has significantly raised its 2026 capital expenditure to between $60 billion and $64 billion and continues to expand its investment in Arizona. Micron Technology also plans to increase its total U.S. domestic investment to $250 billion by 2035.

On the policy front, the U.S. 337 investigation into DRAM devices and ChangXin Memory Technologies' high-profile listing on the STAR Market have introduced new uncertainties and competitive pressures into the future supply chain.