On July 31, 2026, the semiconductor industry reached another critical juncture. According to the latest quarterly forecast released by the Semiconductor Industry Association (SEMI), global semiconductor equipment sales are projected to exceed $120 billion in 2026, marking an approximate 8% year-on-year increase and setting a new high. Mainland China and Southeast Asia emerged as the main growth engines, with equipment shipments growing by 12% and 15% respectively. Concurrently, mature process wafer fabrication capacity remains tight, and manufacturers such as United Microelectronics and Powerchip have successively issued price increases to customers, with hikes ranging from 5% to 10%, sparking a new round of attention regarding structural differentiation in the semiconductor market. Equipment market exuberance exceeds expectations, with Southeast Asia emerging as a new growth pole. Semiconductor equipment is the cornerstone of chip manufacturing, and its sales data has historically been regarded as a leading indicator of industry vitality. The SEMI report indicates that global semiconductor equipment sales reached $62 billion in the first half of 2026, with second-quarter sales reaching $32 billion, a 6.5% quarter-on-quarter increase and a 9.2% year-on-year increase. This figure significantly surpassed initial expectations, mainly driven by the dual momentum of advanced process capacity expansion and mature process capacity upgrades. Regionally, Mainland China has been the world's largest semiconductor equipment market for the fifth consecutive year, with first-half procurement reaching $28 billion, accounting for 45% of the global share, primarily driven by capacity expansions from companies like SMIC and Hua Hong Semiconductor. Notably, Southeast Asia has risen as a standout performer, with equipment procurement reaching $4.5 billion in the first half, a 15% year-on-year increase, leading globally in growth rate. Singapore, Malaysia, and Vietnam have become popular destinations for foreign investment, especially due to surging demand for packaging and testing equipment and back-end manufacturing equipment. Singapore: Attracting expansion of advanced packaging and memory capacity by Micron and Geode, thanks to a stable political environment and favorable policies. Malaysia: Semiconductor industry clusters have formed around Penang and Kuala Lumpur, with major packaging and testing firms like ASE and Amkor continuously increasing investment. Vietnam: Becoming an emerging base for semiconductor packaging and testing due to labor cost advantages, with Intel and Samsung having established operations for many years. Ajit Manocha, President and CEO of SEMI, stated, "The global semiconductor equipment market is entering a 'new cycle of prosperity.' The continuous surge in chip demand from artificial intelligence, electric vehicles, and the Internet of Things, coupled with the rise of the Southeast Asian supply chain, provides new growth space for equipment manufacturers, with the region's equipment expenditure expected to achieve a compound annual growth rate of 12% over the next five years." The wave of price increases in mature processes arrives, leading to tight supply and demand in wafer fabrication. In contrast to the booming equipment market, the wafer fabrication market exhibits a pattern of "hot mature processes and cold advanced processes." TSMC and Samsung maintain a capacity utilization rate of around 80% for advanced processes at 3nm and below, but mature process lines (28nm and above) are currently operating at full capacity. In particular, strong demand from applications such as driver ICs, power management ICs, and MCUs has led to a continuous rise in mature process fabrication prices since the second quarter of 2026. According to industry sources, United Microelectronics Corporation (UMC) has raised the quoted prices for some mature 8-inch and 12-inch processes by 5% to 8% starting in July, with Powerchip and World Advanced also expected to follow, depending on the product. The main reasons for the price increase are threefold: first, the closure of some aging production lines by several established wafer manufacturers in Japan, Germany, and elsewhere has led to a contraction in global mature process effective capacity; second, the steady demand for new energy vehicle and industrial control chips has extended the visibility of orders for nodes such as 28nm, 40nm, and 55nm to 2027; and third, the equipment delivery lead time remains long, at 12 to 18 months, which cannot keep pace with demand growth. Industry Interpretation: Supply Chain Needs Flexible Adjustment Amid Structural Trends Industry insiders believe that this round of mature process price hikes is not a general increase but a result of structural supply-demand imbalance. Chen Weilang, a semiconductor industry analyst in Singapore, pointed out, "As Moore's Law slows down for advanced processes, automotive and industrial chips have higher requirements for reliability and long-term supply, making mature processes a scarce resource. For local small and medium-sized design companies in Singapore, the price surge may increase procurement costs, but it also prompts them to optimize their supply chains, such as signing long-term contracts with local contract manufacturers in Southeast Asia." The price signal transmitted from the equipment sector to the foundry sector also reflects that the entire semiconductor supply chain is undergoing a rebalancing. On one hand, the significant increase in equipment expenditure means that future capacity will be gradually released, but short-term tightness is still difficult to alleviate; on the other hand, the improved profit margins in mature processes benefit foundries in increasing R&D investment to support advanced processes. Singapore and Southeast Asia: Coexisting Opportunities and Challenges For Singapore, the boom in the semiconductor equipment market and the price hike in wafer fabrication bring dual impacts. As a vital node in the global semiconductor supply chain, Singapore possesses a complete logistics and financial ecosystem, with active equipment distribution and used equipment trading. With the expansion of packaging and testing capacity in Southeast Asia, the import volume of equipment and components into Singapore has significantly increased, driving the development of local logistics and technical service industries. However, companies must also be wary of rising costs and the risk of over-concentration in the supply chain. Singaporean chip design companies generally rely on contract manufacturing in Taiwan and Mainland China, and the price pressure may be passed down to downstream end-users. To address this situation, the Economic Development Board (EDB) of Singapore is accelerating the attraction of wafer foundries, such as the "Advanced Manufacturing Park" project announced earlier this year, which has attracted at least three international foundries to negotiate cooperation. Overall, the semiconductor market in the second half of 2026 is expected to maintain a tone of "hot equipment, stable foundry, rising prices." Companies and investors should closely monitor the capacity release pace and geopolitical changes, and adjust procurement and inventory strategies in a timely manner. Against the backdrop of the rapidly growing Southeast Asian supply chain, whoever can more flexibly respond to structural fluctuations will gain an advantage in the next boom cycle.
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