Wafer prices are set to jump 40% in 2027, and Sumco's president isn't selling
SUMCO just put up the best day on the Nikkei 225 and drew a UBS upgrade on forecasts of 40%-plus hikes in 2027 wafer contracts. The man who sells the wafers says the increases on the table fall short of his costs, and he has ruled out new plants.
Vincent Jiang · 3 min read
A 9% day for a company losing money
On 30 September, SUMCO rose 9.08%, the biggest gain among Nikkei 225 components, on volume up 58% 12. Four sessions took the stock from ¥3,040 to ¥3,588, a 17.9% run 2, and UBS lifted it to Buy 3. What buyers bought was not the June quarter: revenue of ¥113.61 billion and a GAAP net loss of ¥4.43 billion, against a ¥34 million profit a year earlier 4.
The 2027 bill: 40% and up
The trade rests on the 2027 long-term agreement round. New 12-inch polished wafer contracts are expected to rise more than 40%, with second-tier customers possibly above 50%; epitaxial wafers, the kind TSMC uses for advanced AI chips, 15% to 25% 56. Spot prices should pass contract levels as early as this quarter 56. GlobalWafers, the Taiwan peer, is forecast to see its 12-inch average price go from $92 this year to $122 in 2027 and $166 in 2028 56. The bill lands on TSMC first, and on second-tier fabs hardest 57.
GlobalWafers' 12-inch wafer price is forecast to rise 80% in two years
- 12-inch ASP
- Estimate
Data
| 12-inch ASP | |
|---|---|
| 2026 | $92 |
| 2027 est. (estimate) | $122 |
| 2028 est. (estimate) | $166 |
The seller has not signed
Sumco president Jiro Tatsuta said in August that a 5% to 10% hike falls far short of covering costs, that prices must rise much further to justify fresh investment, and he ruled out greenfield expansion while staying cautious on renewing long-term deals 5. The Taiwan camp is transacting: its three big wafer makers broke a three-year freeze with synchronized 10% hikes in August 7, customers now want longer contracts 7, and Micron has put $500 million and a 10-year supply agreement into GlobalWafers' Texas plant 7.
The ledger against the bid
Sumco's own record: an interim net loss of ¥12.9 billion for the first half of FY2026 2, and a ¥11.7 billion loss on ¥409.6 billion of sales for FY2025 8. After the run, the market pays ¥1.26 trillion, 2.2 times book, for a stock that already travelled from ¥1,434 in January to ¥5,939 in July 2. Morgan Stanley's Takato Watabe went to Hold on 29 September at ¥3,000, 16% below the 2 October close, against a ¥4,143 consensus 42.
The bull case, fairly stated
The demand is real: CoWoS packaging capacity is projected up 70.9% in 2027, GPU and AI ASIC shipments up 44.9%, and DRAM bit supply up only 22%, short of demand 6. An AI server takes about 3.8 times the wafer input of a standard one 7. Sumco's EBITDA margin was 27.4% last year 8, so the cash engine exists. But the 2027 windfall reaches Sumco's income statement only through contracts its president has not signed.
Projected 2027 growth: AI demand outruns DRAM supply
- Projected 2027 growth
- Estimate
Data
| Projected 2027 growth | |
|---|---|
| CoWoS packaging capacity (estimate) | 70.9% |
| GPU and AI ASIC shipments (estimate) | 44.9% |
| DRAM bit supply (estimate) | 22% |
What decides it
Three dated tests: whether 12-inch spot passes LTA levels this quarter 5; interim results and guidance due mid-November 2; and the renewals themselves, as pandemic-era contracts expire into 2027 5. A 40% price hike is only a windfall once somebody signs it.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
