UBS: Foundry—Faster Leading-Edge Capacity Expansion; Mature Foundry S/D Continues to Improve
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UBS revised its 2026 FinFET industry capacity growth forecast upward to 13% (from 10%) and projects 12% growth for 2027. This acceleration is primarily driven by TSMC's rapid N2 expansion, reaching 90kwpm by end-2026 and 140kwpm by end-2027, alongside capacity recoveries at Samsung and Intel. Chinese players, including SMIC, are also expanding N7 capacity for domestic cloud AI computing, projected to hit 30kwpm in 2026 and 50kwpm in 2027.
In mature nodes, supply and demand dynamics continue to improve. Chinese foundries plan price increases of roughly 10% or more for 2026, with non-Chinese foundries entering negotiations. UBS forecasts blended ASP increases of 2-3% for both 2Q and 3Q 2026. 8-inch utilization rates are expected to climb from 81% in 2025 to 84% in 2026 and over 90% in 2027. UBS reiterates a Buy rating on TSMC with a target price of NT$2,500.00, and favors UMC—rated Buy with a NT$100.00 target—citing stronger earnings growth as depreciation peaks in 2026-2027. GlobalFoundries, Vanguard, PSMC, SMIC, and Hua Hong are all rated Neutral.