Key insights
- GlobalFoundries (GFS) shares rose on news that UMC plans to raise wafer prices, signaling stronger demand for mature-node chips. Morgan Stanley upgraded UMC, anticipating further price increases driven by AI-related demand absorbing weakness in other sectors. This indicates a potential positive outlook for semiconductor manufacturers with mature node capacity, indirectly benefiting GFS.
Investing.com -- GlobalFoundries Inc. (NASDAQ: GFS) shares rose 8% Monday following reports that Taiwan-based peer United Microelectronics Corp. plans to raise wafer prices in the second half of the year, signaling stronger demand for mature-node chips.
Taiwan’s Economic Daily News reported that UMC sent a letter to clients announcing the upcoming price adjustment, citing the evolving supply-demand environment and continued investments needed to support customer growth, according to the report.
The pricing adjustment will be based on factors including UMC’s product mix strategy, capacity agreements and long-term partnerships, the letter stated. UMC expects the ongoing structural evolution of the global semiconductor landscape to persist.
Morgan Stanley analyst Charlie Chan upgraded UMC from Underweight to Equalweight with a price target of NT$68.00, up from NT$51.50. Chan noted that recent checks suggest UMC is informing customers of a potential second-half 2026 price hike as fab utilization improves.
The analyst now assumes a 5-10% price increase in the second half of 2026 and another 5-10% hike in 2027, compared to a prior assumption of no price increases. Small PMIC and MCU products will likely see price increases, while driver IC pricing should remain largely unchanged, according to Chan.
The pricing power reflects AI’s ripple impact on the semiconductor industry, with AI-related demand for server PMIC, networking, storage controllers and general computing absorbing smartphone and PC weakness at mature nodes, Chan said. Overall PMIC capacity remains tight at mature fabs including Vanguard, Powerchip, SMIC and Hua Hong.