No foundry price relief before 2027 as utilisation nears 90%

The surge in AI computing demand is triggering a comprehensive pricing reassessment across the wafer fabrication industry, with initial supply constraints in advanced nodes spreading to mature and specialty processes. Upstream design firms face mounting cost pressures, while downstream foundries operate near 90% capacity, offering no immediate relief. Technologically, AI chips' reliance on advanced nodes has spilled over into other segments, reflecting a shift in downstream demand patterns. Geopolitically, intensified tech rivalry is pushing companies to reassess supply chain resilience, especially in key regions like Taiwan, China and Hong Kong, China. In response, leading foundries such as TSMC and Samsung may increase capacity utilization or optimize process nodes, but short-term imbalances persist. Over the next 12 to 24 months, the industry will enter a price adjustment phase, with mature processes potentially becoming cost arbitrage zones. However, sustained demand for AI and high-performance computing will continue to drive expansion in advanced nodes, creating a structural divergence.