Old memory chips are supposed to be a dying business. Taiwan’s Powerchip Semiconductor Manufacturing is discovering the opposite, and it is negotiating with customers to raise prices another 10 to 20 percent next year after lifting them 23 percent last quarter and telling the market to expect a further 30 percent this quarter.
The Taiwanese foundry plans to reserve production for buyers holding long-term agreements at fixed volumes and fixed pricing. President Martin Chu used an earnings conference to say revenue and profit in 2027 look strong, as long as artificial intelligence demand does not falter.
Its position is unusual: Powerchip expects to stand as the only volume producer of genuinely old memory anywhere. That means legacy DRAM from DDR1 up to DDR3 built on 63-nanometer to 20-nanometer processes, a set of technologies it reckons has 10 to 15 years of commercial life left in it.
The shortage has a simple engine behind it. Memory manufacturers pulled capacity toward high-bandwidth memory destined for AI servers, which drained wafers from the DDR3 and DDR4 lines that cars, industrial equipment and networking gear still buy. Chu attributed the mild softness in DDR3 pricing to a one-off flood of retired office computers and said he expects the dip to fade.
Packaging is the other front. Powerchip is scouting a site in Taiwan, Japan or Singapore for a small facility dedicated to post-wafer-finish services, interposers and integrated passive devices. Integrated passive devices alone are forecast to need 50,000 wafers a month in the second half of next year, against roughly 10,000 of capacity today.
To keep capital risk contained, it wants customers to cover 30 to 60 percent of new production lines through leasing arrangements or prepayments, pointing to Micron’s prepayment deal for its Taiwan packaging build-out as the template.
