News
SMIC faces market resistance over 8-inch price increases as orders shift to South Korean foundries
Monday, March 16, 2026 at 02:40 AM
SMIC is encountering resistance after attempting to raise prices for 8-inch wafer production. As a result, some Chinese customers are reportedly shifting their orders to South Korean foundries to maintain cost efficiency.
Context
As of April 2026, China’s largest foundry, SMIC, is facing significant market pushback after attempting to implement a 10% price hike for its 8-inch wafer services. While SMIC and Hua Hong Semiconductor initially gained market share as TSMC and Samsung Electronics shifted focus toward advanced nodes, the price increase has triggered a strategic pivot by chip designers. Customers are increasingly rerouting orders to South Korean foundries like DB HiTek, which saw a 71% surge in operating profit late last year by capitalizing on these shifting supply dynamics.
This trend is exacerbated by heightening U.S.-China trade tensions, leading global automotive and industrial firms to reduce their dependence on Chinese manufacturing. Despite SMIC operating at a high 95.7% utilization rate and planning $8.1 billion in capital spending for 2026, the shift toward DB HiTek and SK Hynix suggests a narrowing window for Chinese dominance in the legacy node market. Investors are closely watching this migration, as the 8-inch wafer market is projected to see a 2.4% global capacity decline this year while demand for AI-supporting legacy chips remains high.
Sources (8)
SMIC to add wafer capacity to meet strong chip demand, warns of margin hit | ReutersSamsung shifts to advanced nodes, 8-inch foundry capacity reportedly cutTSMC, Samsung shift to advanced nodes; China’s SMIC, Hua Hong seize 8-inch demand - CHOSUNBIZChinese analogue chipmakers join wave of global price rises as mature-node firms eye gains | South China Morning PostAll of a sudden! SMIC will increase prices across the board from ...Applied Materials Pays $252 Million Penalty for Export Violations Involving SMIC | FenwickDemand for AI chips push foundry revenue growth in 2026TrendForce flags 8-inch wafer decline and price rises while SDxCentral warns DRAM is being locked up for AI projects - Astute Group
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