Chip stocks are experiencing a broad-based rally.

HUA HONG GRACE (01347) surged 14.01% to HK$189.6, SMIC (00981) gained 7.13% to HK$83.4, and ASMPT (00522) rose 2.93% to HK$200.4.

The upward move is supported by reports that Taiwan Semiconductor Manufacturing is notifying clients of price increases across its advanced process nodes. According to analysis, the price hikes, ranging from approximately 5% to 10%, will affect all 7nm and below processes, including the 3nm node. This move is expected to impact around 75% of the company's wafer fabrication revenue.

In related news, TSMC has refuted media reports suggesting a significant reduction in 28nm capacity, stating that its strategy for mature process nodes remains unchanged.

Industry forecasts are also providing a positive backdrop. Market research indicates global foundry revenue is projected to grow by 24.8% year-over-year in 2026, reaching $218.8 billion. Demand for AI processors and supporting integrated circuits is seen as the primary driver.

Analysts point out that the foundry sector is poised to benefit from several favorable trends. These include a global semiconductor industry upturn, capacity constraints for AI chips overseas, a return of orders for mature processes, and ongoing capacity expansion by domestic wafer fabrication plants.