Semiconductors trigger a nationwide price increase across the industry chain, shifting the sector from a price war to profit recovery

Since April, a wave of price increases that has swept through the global semiconductor industry supply chain is accelerating transmission from the cost side to the entire value chain. From international IDMs such as Infineon and Texas Instruments to domestic leading manufacturers such as GigaDevice and Puya Semiconductor, they have issued frequent pricing adjustment notices, signaling that the industry is shifting from the previous phase of price competition to a profit-recovery stage. Data from Wind shows that on April 7, the Wind Semiconductor Index rose 1.64%. Among constituent stocks, Kangqiang Electronics hit the daily limit, Cambricon rose 9.10%, and Delmily and ENE Technology each rose more than 7%.

Analysts believe that this round of price hikes is driven jointly by cost pressures on the supply side and increased AI demand, further supported by domestic industrial policies. Semiconductor companies’ earnings expectations are therefore expected to receive a direct boost. Among them, segments with rising domestic substitution rates—such as equipment and materials—and top-tier manufacturers with strong cost pass-through capabilities are expected to benefit first.

Cost-Driven Price Hikes Transmit Across the Full Chain

The main drivers behind this round of price hikes come from the massive cost pressure continuously building up on the supply side.

Over the past year, the global semiconductor manufacturing industry has faced unprecedented cost shocks. On the one hand, geopolitical conflicts have continued to escalate, and supply chains for energy and certain key semiconductor materials (such as neon gas and tungsten hexafluoride, etc.) have encountered bottlenecks. A contraction at the supply end directly raises wafer-fab water and electricity costs and consumables expenses. On the other hand, the rapid surge in AI computing demand creates a squeezing effect on advanced-process capacity. To meet AI chip customers represented by NVIDIA and Broadcom, global leading wafer fabs tilt capacity toward advanced processes, tightening capacity further for analog chips, power devices, and some MCU mature-process capacity that was already under pressure.

Cost surges have forced overseas giants to initiate price adjustments first. In its price-hike notice, Infineon said that due to persistent tight supply of power switches and related chips, combined with rising costs for raw materials and infrastructure, the company will raise the prices of some products in April 2026. Infineon stated that large-scale deployments of artificial-intelligence data centers have driven a significant increase in demand for related chips. The company needs to make additional investment to expand capacity, along with upward pressure from raw material and infrastructure costs; therefore, it will share the additional costs with customers.

Meanwhile, in the domestic market, semiconductor companies must not only deal with global cost increases but also bear the responsibility of ensuring independent and controllable industrial-chain operations. Entering the first year of the “15th Five-Year Plan” period, China has increased its support for the semiconductor industry further. Unlike previous broad-based subsidies, current industrial policies place greater emphasis on targeted implementation and coordinated efforts across the entire industrial chain.

Since this year, multiple regions including Beijing and Shanghai have successively issued or revised policies for high-quality development of the integrated circuit industry. The “Implementation Guidelines for Funding for 2026 High-Tech Industries Development Projects in Beijing and Funding to Support Small and Medium-Sized Enterprises (First Batch)” jointly released by the Beijing Municipal Economic and Information Technology Commission and the Beijing Municipal Finance Bureau explicitly proposes rewards for the first-round wafer runs of integrated-circuit design products. It focuses on supporting integrated-circuit design companies to conduct the first-round wafer runs or first-round engineering wafer runs for multi-project wafer (MPW) projects (full-mask). For eligible enterprises, a reward will be granted based on a certain proportion of wafer-run expenses, with the maximum reward amount for a single enterprise not exceeding 30 million yuan.

In its “Three-Year Action Plan (2026–2028) to Support the Transformation and Upgrading of Shanghai’s Advanced Manufacturing Industry,” the Shanghai Municipal People’s Government General Office proposes to support integrated-circuit companies in targeting equipment, advanced processes, photoresist materials, and 3D packaging to achieve breakthroughs across the entire industrial chain, and to cultivate a group of leading companies with international competitiveness.

Price Adjustments in Progress

Entering April, the market is no longer纠结 about whether a price increase has occurred; instead, it closely focuses on the magnitude of the price increases and the specific company lists.

International IDM giants have shown relatively clear pricing adjustment efforts this round. Texas Instruments formally implemented price adjustments on some products starting April 1. Depending on different devices and product series, the increases range from 15% to 85%, with industrial-control chips seeing leading increases. STMicroelectronics stated in an official price-hike letter released recently that it will raise prices across multiple product lines starting April 26. Reasons include material suppliers charging allocation fees, rising energy and transportation costs, and more. Allegro also said in its price-hike letter that starting April 27, the company’s entire product line will increase by at least 10%.

Dense pricing adjustments have also appeared in the power device sector. Onsemi, NXP, and Diodes all began price adjustments for some products around April 1. The upward trend has also spread to the passive components sector: Murata and Yageo have both increased prices for specific product lines.

In the domestic market, local manufacturers have frequently taken pricing actions. In the wafer foundry segment, GigaDevice—the domestic leading wafer foundry—announced that it will uniformly increase prices by 10% for wafer foundry products newly produced starting June 1.

In the chip design sector, Puya Semiconductor announced that it would raise prices for products related to general MCUs starting April 15. The pricing adjustment ranges for manufacturers such as PeakTech Technology, Jiejie Microelectronics, and Naxin Micro are generally in the 10% to 20% range. It is worth noting that this round of price hikes covers multiple sub-sectors such as MCUs, Nor Flash, and power semiconductors, showing an across-the-board pattern of price increases across product categories, with overall increases clearly higher than in previous years.

Optimistic About Investment Opportunities in the Semiconductor Supply Chain

The price-hike wave triggers knock-on effects across the industrial chain and rapidly transmits to the capital markets, becoming one of the key main storylines in the A-share market recently. Brokerage analysts generally believe that the driving force behind this round of semiconductor market activity has undergone a fundamental shift.

Xu Liang, Chief Analyst for the Electronic Industry at AA Jian Securities, said that unlike the past reliance on a single driving logic, the third storage cycle that began in 2024 shows a multi-factor resonance characterized by the explosion of AI server demand and upgrades to intelligent terminal configurations. At the same time, Samsung Electronics plans to raise DRAM prices by about 30% in the second quarter, and the price-increase cycle for memory chips is expected to continue throughout 2026.

Xu Tao, Chief Analyst for the Electronic Industry at CITIC Securities, said that driven by AI demand, memory is still in the middle-to-early stage of a super boom cycle, and the tight supply-and-demand landscape is expected to last at least until 2027.

Xu Tao added that, based on calculations of equipment procurement situations disclosed by the China Tendering website, China’s domestic equipment localization rate in 2022 for semiconductors was about 18%. It is expected that in 2025, benefiting from the rapid rise in domestic localization rates for DRAM and 3D NAND memory production lines, the localization rate could increase to around 30%, and in 2026 it could rise to roughly 35%. “We expect the localization rate to gradually increase to 60% to 70%, bringing doubling-level growth room. The increase in the localization rate of advanced processes will open a long-term growth cycle for domestic equipment,” Xu Tao said.

Zhang Xia, Chief Strategy Analyst at China Merchants Securities, said that looking ahead to April, after external shocks fade, market focus will shift to the areas with high growth in first-quarter reports. The semiconductor supply chain is expected to become one of the industries with the most outstanding performance growth rates.

Industry insiders believe that from passive price increases to active profit restoration, and from a single cycle to a dual-wheel drive of AI demand and domestic substitution, the semiconductor industry has entered a new round of growth cycle. As the transmission of price hikes gradually takes effect and localization rates continue to rise, the overall profitability of the semiconductor supply chain is expected to undergo a systemic recovery.