Price increase of 60%–70% — chip "cornerstone" prices are going crazy! Foreign companies dominate about 80% of the high-end market, and high-quality A-share companies are too scarce (list attached)

So-called “foundation” chips: prices for semiconductor sputtering targets have continued to rise.

In Q1 2026, the global semiconductor market is undergoing a supply-demand shock driven by surging demand for high-end products: from upstream wafer fabs booking capacity and purchasing key raw materials, to midstream full-capacity production of AI chips and memory, and then to downstream data centers and smart device makers rushing to buy, more than 50 industry companies have been densely adjusting prices. The price increase for certain high-end chips used for AI training has even exceeded 100%.

This industry-wide wave of price hikes is essentially the inevitable result of multiple forces acting together: exponential growth in AI compute demand, cost pressure brought on by the transition from mature process nodes to advanced process nodes, and a reshaping of supply chains into regionalized structures caused by geopolitical factors.

And when looking at price increases across sub-sectors, memory chips and semiconductor consumables have seen especially pronounced gains. Among them, semiconductor sputtering targets have been rising very “aggressively,” with price increases for certain special metal-type targets reaching 60%–70%.

Chip “foundation” prices have gone crazy

Semiconductor sputtering targets are hailed as the “foundation” of chips because they play an irreplaceable core role in the chip manufacturing process—key materials for achieving chip conductivity, interconnects, and functional integration. In Q1 2026, electronic target material companies have generally already initiated price increases. Among them, conventional target materials saw price increases of 20%, while special metal-type targets rose even more, reaching 60%–70%.

A research report from Dongxing Securities points out that the main drivers of target price increases are a sharp rise in metal costs, especially copper and tungsten. In addition, top Japanese sputtering target companies face risks of key raw material supply disruption.

The sputtering target industry has broad market space. According to a report by Frost & Sullivan, by 2027 the global semiconductor sputtering target market is expected to reach RMB 25.11B. Dongxing Securities notes that, given current supply-demand conditions, the target industry is likely to enter an upswing period in market conditions.

Worth noting is that the global high-end sputtering target market has long been dominated by overseas giants such as JX Metals (JX Nippon Mining & Metals) and Honeywell. Data show that the four U.S.-Japan giants represented by JX Metals and Honeywell together account for about 80% of market share.

Scarce high-quality A-share companies

In China’s A-share market, there are only three companies whose main product names include sputtering targets: Jiangfeng Electronics, Aisichuang, and Orail New Materials.

A research report from China Renaissance Securities shows that Jiangfeng Electronics has focused on ultra-high-purity metal materials for more than 20 years. It has grown from a single sputtering target supplier into a comprehensive platform company covering high-end sputtering targets and semiconductor precision components. Its sputtering target products have been stably applied in 7nm and 5nm processes, and have also entered the 3nm advanced process node. Its customers include global mainstream wafer fabs such as TSMC, SK hynix, Semiconductor Manufacturing International Corporation, and United Microelectronics. On the basis of steady global expansion in the sputtering target business, the company is aligned with trends in domestically produced equipment and wafer fabs expanding capacity. It is extending into precision components for equipment used in PVD/CVD, etching, and other processes. Through fund-raised projects and external technical cooperation, it accelerates entry into key “bottleneck” segments such as electrostatic chucks, forming a “targets + components” dual-engine development pattern.

According to the company’s 2025 interim report, Aisichuang’s products cover PVD coating materials such as sputtering targets, thermal evaporation materials, and coating accessories. They can be widely used in industries including optical optical communications, flat panel displays, energy-saving glass, semiconductors, and photovoltaics.

Orail New Materials’ main business is the R&D, production, and sales of high-performance sputtering targets. These include various sizes and types of copper targets, aluminum targets, molybdenum and molybdenum alloy targets, ITO targets, and more. The company’s products can be widely used in fields such as semiconductor displays, touch screens, architectural glass, decorative coating films, integrated circuit packaging, new energy batteries, and solar cells. They are key materials for industrialized preparation of thin-film products of various kinds.

Semiconductor materials may be in for a major opportunity

The industry outlook for semiconductor materials is also worth期待. A research report from Galaxy Securities notes that Japan’s materials manufacturer MGC announced that, starting from April 1, the key products in its electronic materials division will be comprehensively increased in price by 30%. Recently, suppliers of Japan’s WF6 have also begun notifying certain Korean semiconductor companies that their supply of raw materials has been interrupted. The wave of semiconductor materials price hikes is becoming even more clear, and supply-chain security may become a key focus.

According to a statistics compilation by Securities Times·Data 宝 (Securities Times · Data Treasure), there are 25 A-share listed stocks in the semiconductor materials sector. Among them, institution-wide consensus forecasts put Layon Micro as the top pick, with its 2026 net profit growth rate expected to exceed 12 times.

In addition, the expected 2026 net profit growth rates for individual stocks such as Hualin Weina, Orail New Materials, and Hainai Chengke are all expected to exceed 100%.

Since the beginning of this year, the share prices of nearly half of the stocks have risen. Orail New Materials and Jiangfeng Electronics have both cumulatively jumped by more than 60%.

Statement: All information contained in Data Bao does not constitute investment advice. There are risks in the stock market; investment requires caution.

Proofread by: Zhao Yan