Impact Assessment of SMIC and World Advanced's 8-inch BCD Process Price Hike on the Semiconductor Industry Chain

1. Event Background and Driving Factors
   : SMIC (0981) and World Advanced (2330) announced a 10% price hike for their 8-inch BCD process platforms, mainly due to tight BCD capacity caused by strong demand for power management chips in products like AI servers [1][2].
2. Impact on Profitability
   : SMIC’s Q3 2025 financial report shows that 8-inch wafer revenue accounts for 23% of total revenue [3]. Assuming BCD process accounts for 30%-50% of 8-inch revenue, a 10% price hike will drive the company’s overall revenue growth by 0.69%-1.15%. Since the cost structure of BCD process is relatively stable, the price hike will directly improve gross margin [0]. As a major global BCD process supplier, World Advanced’s price hike will have a similar profit-boosting effect [0].
3. Market Valuation Reaction
   : From December 10 to 24, 2025, SMIC’s stock price rose approximately 3.4% (from $68.70 to $71.05), with a single-day gain of 3.12% on December 24, significantly outperforming the tech sector’s average gain of 0.21% [0], reflecting the market’s positive expectations for the price hike. World Advanced’s stock price remained stable during the same period, possibly because the price hike information was not fully confirmed or had been priced in advance [0].
4. Industry and Policy Background
   : The U.S. has temporarily refrained from imposing new tariffs on Chinese chips [4], and China is preparing to provide up to $70 billion in incentives for the chip industry [5], supporting the development of domestic chip manufacturers.

1. Structural Driver from AI Demand
   : The BCD process price hike stems from long-term demand growth for AI server power management chips, rather than short-term fluctuations, reflecting the driving role of the AI industry chain in semiconductor basic processes [0].
2. Capacity Utilization Supports Price Hike
   : SMIC’s 8-inch capacity utilization rate reaches 95.8% [3], and high utilization rate gives foundries pricing power; tight industry capacity may continue to push prices upward.
3. Differentiated Market Reaction to Manufacturers
   : As a leading domestic wafer foundry, SMIC’s stock price reacted more strongly to the price hike, reflecting investors’ recognition of its position in the domestic AI supply chain [0].
4. Potential Industry Chain Reaction
   : Analysts generally believe that SMIC and World Advanced’s price hikes may trigger other foundries to follow suit, further tightening BCD process capacity [0].

• Opportunities
  : 1) Foundries improve gross margin through price hikes, enhancing profitability; 2) Sustained growth in demand for AI power management chips drives expansion of the BCD process market size; 3) Policy support for domestic chip industry enhances long-term competitiveness.
• Risks
  : 1) If the price hike is too large or lasts too long, downstream customers may switch to other suppliers; 2) New capacity expansion lags behind demand growth, affecting industry supply stability; 3) Uncertainty remains regarding subsequent changes in U.S. tariff policies.

This analysis is based on public data and market feedback, evaluating the impact of SMIC and World Advanced’s 8-inch BCD process price hike: the price hike will increase revenue and gross margin for both manufacturers, and SMIC’s stock price has already responded positively to the news; AI demand is the core driving factor, and tight industry capacity supports the price hike logic; factors such as downstream affordability, capacity expansion, and policy risks need to be monitored. This report does not provide specific investment advice and only offers objective background for decision support.