PSMC Plans Foundry Price Hikes of Up to 20% in 2027

According to Powerchip Semiconductor Manufacturing Corporation (PSMC), the company reported revenue of NT$21.3 billion (approximately US$654.3 million) in the third quarter of 2026, representing a 23% increase from the previous quarter. Higher foundry prices, an improved average selling price (ASP), and increased capacity utilization lifted its gross margin from 28% to 48%. Net profit reached NT$6.5 billion.

Driven by growing demand for memory, power management ICs, and advanced packaging for AI servers, PSMC expects revenue to grow by double digits in the fourth quarter. The company also indicated that foundry prices could rise by another 10% to 20% in 2027.

AI Server Demand Tightens Global DRAM Supply

PSMC noted that high-bandwidth memory (HBM) used in AI servers continues to consume advanced process capacity at major DRAM manufacturers, contributing to a global imbalance between DRAM supply and demand. The reported reduction in HBM capacity for NVIDIA's Rubin architecture, from 288GB to 192GB, highlights the potential impact of constrained HBM supply. Meanwhile, the shift in AI workloads from model training toward inference continues to support DRAM demand.

The wider adoption of AI technologies has also accelerated the replacement of older office computers. This trend has increased the supply of recycled DRAM recovered from dismantled systems, putting downward pressure on spot prices for DDR3 memory. PSMC considers this development temporary.

Niche DRAM Supply Constraints Support Foundry Prices

As major memory manufacturers increasingly allocate production capacity to HBM and gradually withdraw from the niche DRAM market, supply constraints in niche DRAM are expected to persist. PSMC believes this market dynamic will help keep foundry prices elevated.

PSMC and Micron Advance DRAM Process Collaboration

PSMC also reported progress in its collaboration with Micron on the DRAM 1P process. The initial process design kit (PDK) is expected to be completed by the end of 2026. Equipment installation is scheduled for the first quarter of 2027, with pilot production planned to begin in the second quarter.

The combination of AI-driven memory demand, tighter niche DRAM supply, and planned foundry price increases could support PSMC's revenue growth into 2027, while its collaboration with Micron marks another step in its DRAM process development.