Recently, NCE Power (605111.SH), a leading domestic power semiconductor design company, issued a price increase letter, announcing that starting from March 1, 2026, it will raise prices for its MOSFET product series by at least 10%. This decision quickly drew industry attention and is seen as another signal from a key indicator of the domestic power chip market.

Reasons for Price Increase: Surging Upstream Raw Material Costs, Persistent Pressure on Wafer and Packaging/Testing Costs

In the price increase letter, NCE Power clearly stated that the core reason for the price adjustment is the recent significant surge in global upstream raw material and key precious metal prices, leading to continuously rising wafer foundry and packaging/testing costs. The company stated that it can no longer bear the increasing comprehensive costs alone. To ensure sustainable operations, guarantee stable product supply and service quality, it has decided to moderately adjust prices after careful consideration.

As a core enterprise in the domestic power semiconductor field, NCE Power's main business focuses on the R&D, design, and sales of power devices such as MOSFETs and IGBTs. Its products are widely used in various downstream sectors including new energy vehicles, smart grids, industrial control, and consumer electronics. Its product pricing serves as an important indicator for the domestic power chip market.

Profit Pressure: Decline Already Apparent in Q3, Passive Response to Cost Pressure

NCE Power's decision to raise prices is essentially a passive response to cost pressures. Financial report data shows that in the first three quarters of 2025, the company achieved operating revenue of 13.85 billion yuan, a year-on-year increase of 2.19%, and net profit attributable to shareholders of 335 million yuan, a year-on-year increase of 0.7%. However, the performance in the third quarter of 2025 alone already showed signs of weakness: operating revenue was 4.56 billion yuan, a year-on-year decrease of 5.5%, and net profit attributable to shareholders was 99.3981 million yuan, a year-on-year decrease of 13.23%. The downward pressure on profitability has become an internal driver for the company's price adjustment.

Industry Snapshot: Domestic Chip Price Hike Wave Spreads, Covering Memory, Power, MCU, and Other Segments

NCE Power's price increase is not an isolated case but a microcosm of a new wave of domestic chip price hikes. Since the beginning of 2026, several domestic chip companies including Sino Wealth, Goke Microelectronics, INJOINIC, and Maxic have successively issued price increase notices, with increases generally ranging from 10% to 80%, covering categories such as MCUs, NOR Flash, KGD memory in package, and power devices. A "price hike storm" driven by the combined forces of cost pressure and AI demand is gradually spreading from memory chips to key areas like power semiconductors, analog chips, and MCUs.

According to the latest February report from TrendForce, the Q1 2026 contract price increase for NAND Flash has been revised upward to 55%–60%, with server-side DRAM increases nearing 90%, and some customized memory chips seeing increases of up to 100%. Sino Wealth has raised prices for MCUs, NOR Flash, and other products by 15%-50%, while Goke Microelectronics has raised prices for KGD memory in package products by 40%-80%, indicating a continuously expanding scope of price increases.

Institutional Views: Price Hike Wave Expected to Spread Further, AI Demand Intensifies Industry Divergence

CITIC Securities analysis suggests that since the fourth quarter of last year, price increases have successively appeared in segments of the electronic components field such as memory, CCL, BT substrates, wafer foundry, and packaging/testing. Recently, manufacturers in areas like medium/low-voltage MOSFETs, SOCs with built-in memory, and LED drivers (an analog sub-segment) have also announced price increases. Coupled with stronger-than-expected downstream inventory replenishment and persistently high or rising upstream metal prices, it is expected that the price increase trend in the electronic components industry will continue to spread.

Morgan Stanley pointed out in a research report that AI demand is driving significant divergence within the semiconductor industry. Upstream manufacturers like those producing AI memory chips (e.g., HBM) are benefiting notably, while downstream players such as PC and smartphone manufacturers may face pressure in passing on costs. This round of price hikes, driven by both costs and AI demand, is reshaping the profit distribution landscape across the semiconductor industry chain.