As pressure to raise prices spreads across the semiconductor supply chain, Chinese analog chipmakers have moved to increase prices in step with global companies. The industry says the trend could offer China’s mature-node-focused companies an opportunity to expand market share.

The Hong Kong-based South China Morning Post reported on March 29 that Chinese companies including Novosense Microelectronics, SG Micro, Fortior Technology, Halo Microelectronics and Silan Micro have recently implemented price increases. The moves coincide with a broader price-hike trend among global companies including Texas Instruments, Analog Devices, NXP Semiconductors, Infineon Technologies, ON Semiconductor and STMicroelectronics.

TI plans to implement price increases of up to 85 percent on some products from April. Novosense, notifying customers of price adjustments, said that as volatility persists in the global semiconductor market, costs of key materials such as wafers and packaging inputs are surging.

Analog chips process continuous real-world signals such as sound, temperature and light. They play an essential role in areas including data centre power management, voltage regulation and signal processing. The market says price pressure is spreading across the entire semiconductor supply chain as higher upstream costs for raw materials and processing coincide with expanding demand for artificial intelligence. Memory chips have been a leading example, but the industry says the impact is spreading to other categories.

Clifford Kurz of S&P Global Ratings analysed that China is likely to gain spillover benefits in this environment based on its competitiveness in mature processes. That is because analog chips are mainly produced on mature processes where precision matters more than cutting-edge technology. China has lagged in leading-edge processes due to U.S. export restrictions, but has steadily increased production capacity in mature processes. SEMI forecast China’s share of global capacity in the 22 to 40 nanometre range will grow to 42 percent in 2028 from 25 percent in 2024.

Expansion by Chinese foundries is also accelerating. SMIC is maintaining monthly production capacity of more than 1 million wafers and a high utilisation rate, while Hua Hong is also operating at virtually full capacity. The industry assesses that, in a rising price environment, Chinese companies have room to secure profitability while offering lower prices than global competitors.

Even so, the pace of supply expansion is limited. Given the nature of mature processes, products tend to be commoditised, so large-scale investment requires long-term contracts. Capacity for analog production is also becoming tighter as major foundries such as TSMC and Samsung Electronics focus on producing advanced AI chips.

On the cost side, increases across chemicals, gas, energy and logistics are continuing to drive a trend of foundries passing on higher costs to customers. Kurz said the key concern behind rising analog chip prices is not so much the cost itself as whether downstream manufacturers of finished goods can secure enough volume to maintain production schedules. He pointed to supply, rather than price, as the market’s key variable.