GlobalFoundries Inc. (NASDAQ:GFS) saw its stock rise 8% on Monday after reports emerged that Taiwan-based United Microelectronics Corp. intends to implement wafer-price increases in the second half of the year. Investors interpreted the planned adjustment as a sign of firmer demand for mature-node semiconductor products, helping lift shares of a peer in the foundry sector.
Taiwan's Economic Daily News reported that UMC sent a letter to customers outlining the forthcoming pricing change. The company cited the shifting supply-demand environment and the ongoing investments required to support customer growth as the rationale for the adjustment, according to the report.
The letter, as described in the report, said the price change will be determined by several factors, including UMC's product-mix strategy, existing capacity agreements and long-term partnerships with customers. UMC also signaled its expectation that a structural evolution in the global semiconductor landscape will continue.
Morgan Stanley analyst Charlie Chan responded to the developments by upgrading UMC from Underweight to Equalweight and raising the price target to NT$68.00 from NT$51.50. Chan's updated assumptions reflect recent checks indicating UMC has informed customers of a potential second-half 2026 price hike as fab utilization improves. He now models a 5-10% price increase in the second half of 2026 and an additional 5-10% hike in 2027, where previously he had assumed no price increases.
Chan's note also broke down expected product-level effects, saying that smaller PMIC and MCU products will likely face price increases, while driver IC pricing should remain largely unchanged.
The analyst framed the pricing momentum as part of AI's spillover effects across the semiconductor supply chain. He pointed to rising AI-related demand for server PMIC, networking, storage controllers and general-purpose computing as absorbing some of the weakness in smartphone and PC markets at mature process nodes. Chan added that overall PMIC capacity remains tight at mature fabs, naming Vanguard, Powerchip, SMIC and Hua Hong among those with constrained capacity.
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