In the summer of 2026, the spotlight of the AI industry narrative is quietly shifting toward an unassuming component: power semiconductors.
A set of data outlines the full picture of this change: public information shows that power semiconductor manufacturers in Taiwan, China are brewing a third round of price hikes this year, with non-contract products expected to see a 10% to 15% increase as early as October. Prior to this, global leader Infineon completed its second price adjustment of the year in July, with AI server power supplies and automotive-grade power devices seeing price hikes of 10% to 20%. Extending the timeline, the average price of power semiconductors in the first half of the year has already risen by about 15% to 20% compared to the same period last year.
Behind the price increases lies an explosion in demand, rigid capacity, and a profound transformation reshaping the industrial chain landscape. This 'power supply heart,' hidden in server power supplies, NEV (New Energy Vehicle) electric drives, and photovoltaic inverters, is being propelled into a super cycle by AI's computing power demands.
This article adopts a data-microscope approach to first conduct a comprehensive deconstruction of the data behind the price hikes, and then analyze the situation from three dimensions: demand, supply, and landscape, to see what this wave of price increases truly signifies.
01. Three Consecutive Hikes: Understanding the 'Power Supply Ledger'
The price hike of power semiconductors is not an isolated pricing action, but a progressively deepening price curve.
Public information shows that Infineon has completed two rounds of price hikes since 2026, with the second round taking effect in July. Core categories such as AI server power supplies and automotive-grade power devices have seen price increases of 10% to 20%, leaving almost no room for negotiation for spot and scattered order customers. Following closely, overseas giants such as STMicroelectronics, onsemi, and Texas Instruments have successively raised prices for automotive analog and signal chain chips. Domestic manufacturers like StarPower, Yangjie Technology, and SiEn Integrated have also increased the prices of automotive-grade power devices by 10% to 25%. In addition, power semiconductor manufacturers in Taiwan, China are preparing for a third round of price adjustments, to be implemented as early as October with a 10% to 15% increase, while long-term contract customers remain unaffected for now. The three consecutive hikes, spanning from overseas to domestic markets and from automotive-grade to AI power supplies, cover almost all high-prosperity tracks in the power semiconductor sector.
The structural characteristics of the price hikes are equally clear. According to Wang Haojun, an analyst at TrendForce, some overseas leaders and domestic manufacturers have issued price hike notices, with automotive-grade silicon-based IGBT (Insulated Gate Bipolar Transistor) chips seeing an increase of about 10% to 20%. Infineon explicitly stated in its price hike letter that the demand for SiC (Silicon Carbide) devices is experiencing explosive growth, with high-end categories such as SiC modules, automotive-grade modules, and high-voltage modules increasing by over 15%. Upstream is also seeing price hikes: SiC substrate materials, whether conductive or semi-insulating, have seen year-on-year increases of over 50%. The price hike is not limited to individual categories but is comprehensively transmitting from the bottom up along the industrial chain.
The operational data of industrial chain companies best illustrates the prosperity. The disclosed semi-annual performance of the power semiconductor industry shows a 'simultaneous increase in volume and price': Silan Microelectronics expects a net profit of about 519 million RMB in the first half of the year, a year-on-year increase of about 96.05%; Yangjie Technology expects a net profit of 722 million to 842 million RMB in the first half of the year, a year-on-year increase of 20% to 40%, with automotive electronics business revenue growing over 100% year-on-year and SiC business revenue nearly doubling year-on-year; MinDe Electronics' power semiconductor business revenue reached 53.6886 million RMB, a massive year-on-year increase of 310.77%, with its revenue share jumping from 11.38% in the second half of last year to 35.60% in the first half of this year. Its holding subsidiary, Guangxin Microelectronics, saw its revenue increase by 101.44% year-on-year in the first half of the year, operating at full production and sales, and began raising foundry prices in June. The manufacturing end is also running at full load: Hua Hong Grace's average capacity utilization rate for the full year of 2025 reached 106.1%, and Fab9, which is ramping up capacity, is expected to complete capacity allocation in the third quarter of this year and reach full production soon.
Price is the thermometer of industrial prosperity, and performance is the mirror of prosperity. The three consecutive hikes, coupled with strong performance growth mean that the 'power supply ledger' of power semiconductors is being opened page by page by the market.
02. Demand Shift: AI Pushes Data Centers into the 'Gigawatt Era'
Price hikes are merely the surface; the change in demand structure is the underlying logic of this cycle.
The explosion of AI computing power is reshaping the demand curve for power semiconductors in an unprecedented way. Given the frantic expansion of GPU clusters, data center power consumption has leaped straight from the megawatt level to the gigawatt level—large-scale AI data centers are entering the gigawatt era, and power supply capacity has become a core bottleneck restricting the large-scale deployment of AI. This leap in power consumption directly drives up the usage of power devices. According to industry estimates, traditional server power supplies (2kW level) require only 8 to 12 power MOSFETs, while a single AI server power supply (5 to 10kW level) requires 24 to 40 power devices, a 3 to 5 times increase, with significantly higher requirements for high-voltage and high-efficiency devices.
The continuous leap in power density is triggering a 'power density revolution.' The 48V/54V power supply architecture used in traditional data centers faces increasingly prominent issues with current, copper bars, heat dissipation, and conversion losses in the face of ever-higher power densities. The industry is exploring higher-voltage power supply architectures, with 800VDC high-voltage direct current emerging as a key direction. Infineon launched a 24kW SiC battery backup unit reference design for 800V high-voltage AI data centers in June this year, connecting directly to the 800V DC busbar and utilizing 650V and 1200V SiC technology—marking AI data centers as a brand-new application scenario for wide-bandgap semiconductors like SiC and GaN (Gallium Nitride).
Signals from the demand side are not limited to AI. According to public reports, in the first quarter of 2026, the inventory turnover days of five major automotive semiconductor leaders, including Infineon and NXP, fell from a peak of over 200 days to 120 to 140 days; as of August 2026, the delivery cycle for mainstream automotive-grade power devices has extended to over 30 weeks, with SiC main drive modules even exceeding 40 weeks. Some orders require a half-year wait for delivery, and original manufacturers are generally implementing quota-based supply. Orders and revenue are turning upward simultaneously: according to Bernstein statistics, global automotive semiconductor industry revenue rose 11% year-on-year in the first quarter of 2026, and increased by another 5% quarter-on-quarter in the second quarter; NXP's automotive business revenue grew 12% year-on-year in the second quarter, STMicroelectronics' automotive segment revenue growth reached 26%, and Renesas' automotive business growth was 24.8%.
Of course, demand is not rising across the board. Industry insiders note that the core driver for most power semiconductor companies raising prices this year remains cost-side pressure. Apart from AI, there are no significant demand changes seen in the industrial and automotive sectors for now. This means the steepest incremental growth in this cycle comes from AI computing power, while automotive, optical storage, and industrial sectors constitute a stable basic disk—multi-wheel drive, resonating in the same direction, rather than a single pulse.
03. Supply Dilemma: When Will 8-inch Production Lines 'Relax'
While the demand side hits the fast-forward button, the supply side is stuck on the rigid capacity of mature process nodes.
Most power semiconductors are manufactured using mature process nodes of 8-inch and below. Over the past few years, global wafer giants have shifted more and more 8-inch capacity to high-margin products of advanced process nodes, causing the available capacity for power chips to continuously shrink; meanwhile, the release pace of new global capacity is significantly lagging. According to TrendForce analysis, most new capacity is expected to be released only by the end of 2026 or after 2027, and the supply-demand tension is expected to persist for another 6 to 12 months. According to predictions from Infineon and multiple analysts, the essence of this shortage is not a pandemic-style supply chain disruption like in 2021, but a structural demand-side pull brought by the explosion of AI computing power, coupled with the slower-than-expected capacity ramp-up of third-generation semiconductors. This cycle could last as long as 3 to 5 years. (It should be noted that the two timeframes do not contradict each other: the former refers to the time point when the existing supply-demand gap is alleviated, while the latter refers to the length of the complete industrial upward cycle; the directions are consistent, but the levels differ.)
Words from Zhao Haijun, Co-CEO of SMIC (Semiconductor Manufacturing International Corporation), confirm the capacity tightness: AI demand has pushed mature process capacity for PMIC (Power Management IC) and other products into a shortage state. Customers are shifting orders to Chinese wafer fabs because overseas suppliers are concentrating capacity on high-margin AI chips and HBM. The full-production state at the manufacturing end is evident from the data: Hua Hong Grace's average capacity utilization rate for the full year of 2025 reached 106.1%, and SiEn Integrated also maintained a high capacity utilization rate in the first quarter of this year, implementing a new pricing system for its 8-inch MOSFET product line since January. Its future expansion direction focuses on 8-inch SiC, 12-inch lines related to analog IC and MCU (Microcontroller Unit), and power module packaging. MinDe Electronics gave a judgment during an institutional survey: constrained by the complexity of wafer manufacturing and the localization layout of the supply chain, new capacity is restricted, and the next 3 to 5 years will be a prosperity cycle for the wafer foundry industry.
The price hikes of upstream raw materials further tighten the supply chain. Industry data shows that upstream SiC substrates, whether conductive or semi-insulating, have seen year-on-year increases of over 50%; costs in the packaging segment, including copper, tin, packaging substrates, and silicon wafers, are also rising. The explosion in demand, coupled with rigid supply and rising costs, jointly pushes prices to new highs. This 'time gap' between supply and demand determines the endurance of this price hike wave—as long as the gap remains unfilled for a day, it is hard to say prices will fall for a day.
04. Beyond Price Hikes: A Deeper Industrial Transformation
Focusing solely on prices would mean missing the more important industrial narrative behind the hikes. This wave of price increases is becoming an accelerator for the reshaping of the power semiconductor industry landscape.
The first change is the clearance of backward capacity. Wang Shu, Vice President of Yaoxin Microelectronics, stated that in the past few years, the industry saw rapid expansion of mid-to-low-end capacity and continuous price wars, leaving many companies in a state of micro-profit or even losses. This round of comprehensive cost increases across the industrial chain has directly compressed the space for low-price competition. Small and medium-sized enterprises lacking cost control capabilities, core technologies, and with products concentrated in the low-end sector will face dual pressure from rising costs and diverging demand, significantly accelerating the pace of industry clearance. The ebbing of price wars shifts the industry from 'competing on price' to 'competing on value,' which is good for leading manufacturers and even better for the long-term health of the industry.
The second change is the concentration of market share and the rise of domestic forces. The transmission of price hikes is not monolithic: according to Wang Shu, customers in high-prosperity tracks like AI power supplies, NEVs, and leading energy storage have higher acceptance for reasonable price increases, while tracks like consumer electronics, home appliances, and general-purpose motor power supplies face greater resistance to price transmission. Amidst this divergence, leading manufacturers with economies of scale and stronger bargaining power over upstream supply chains are better able to offset cost pressures, leading to a continuous concentration of industry share towards the top.
Meanwhile, the process of domestic substitution is accelerating. According to data from the China Commerce Industry Research Institute, China's IGBT localization rate has risen from less than 12% in 2015 to over 55% in 2026. The localization rate of automotive-grade main drive IGBTs has broken through 86%, and Chinese companies now occupy 7 of the top 10 global IGBT module spots. Next-generation power semiconductors like SiC modules have also entered the global top five. Price hikes and extended delivery cycles by overseas giants have precisely opened a window for domestic manufacturers—from 'following' to 'running alongside,' China's power semiconductor industry is completing a historic leap.
The third change is the cycle reversal of third-generation semiconductors. In the past two years, SiC was a heavily affected area in the 'price war.' According to a source from Sanan Optoelectronics, domestic SiC power semiconductors have not yet seen significant price hikes, with prices only stabilizing after declines, and downstream customer competition remains fierce. However, signals of reversal have emerged: SiC substrate materials have risen by over 50% year-on-year, and Infineon's high-end SiC categories have increased by over 15%. Cheng Jiayu, Senior Vice President of Infineon, further predicted that the large-scale deployment of SST (Solid State Transformers) will concentrate in AIDC computing scenarios, ushering in a commercial peak in the next two years, with all of Infineon's SST solutions using SiC as the core base material. From 'getting on vehicles' to 'entering data centers,' third-generation semiconductors are acquiring a second growth curve.
05. Conclusion
Returning to the 'power supply heart' mentioned at the beginning. It is hidden in the power modules of servers, the electric drives of NEVs, and the shells of photovoltaic inverters, almost imperceptible to ordinary consumers. Yet it is this tiny chip that determines whether computing power can flow efficiently, whether electricity can be converted precisely, and whether equipment can operate stably. In the AI era, the foundation of computing power is electricity, and every efficient conversion of electricity relies on the strong beating of this heart.
This wave of price hikes has brought this 'power supply heart' to the center of the industrial stage like never before. This power density revolution, spreading from power architecture to device materials, ultimately lands on this unassuming chip. It brings not just price increases, but also the clearance of backward capacity, the rise of domestic forces, and a new cycle for third-generation semiconductors. As global competition in AI development extends from chips to power infrastructure, China's power semiconductor industry stands at a rare window—after the tempering of this price hike wave, it will be its own heart that beats faster and steadier.