TrendForce: Increase in demand for AI-related products and reduction in production by major factories may lead to an increase in the price of eight-inch wafer foundry services.

According to the latest survey by TrendForce, there have been changes in the supply and demand landscape for eight-inch wafers recently: against the backdrop of TSMC and Samsung gradually reducing production, the demand for AI-related Power ICs is steadily growing. In addition, concerns about the increase in IC costs and capacity constraints in the second half of the year have led to early stockpiling. Apart from mainland Chinese wafer fabs where the utilization rate of eight-inch production capacity has already risen to a high level in 2025, other regional players have also received order upgrades for 2026, leading to an increase in capacity utilization rates and prompting foundries to actively consider raising prices. On the supply side, TSMC officially began to gradually reduce eight-inch production capacity in 2025, with the goal of partially shutting down some fabs by 2027. Samsung also started reducing eight-inch production in 2025, with a more proactive attitude. TrendForce expects that in 2025, global eight-inch production capacity will decrease by about 0.3%, officially entering a negative growth situation. In 2026, even though SMIC and Vanguard plan to slightly expand production, the extent of reduction in capacity by the two major fabs is expected to surpass the expansions, leading to an estimated annual decrease in capacity of 2.4%. On the demand side, in 2025, due to the increase in AI Server Power IC orders and the trend of IC localization in mainland China driving up demand for local wafer foundries for BCD/PMIC, the utilization rates of eight-inch production capacity for some players have increased significantly since the middle of 2025. Consequently, they have begun to raise foundry prices, which took effect in the second half of that year. With the capacity of mainland Chinese foundries fully loaded, overflow orders also benefit Korean foundries. Entering 2026, the increase in computing power and power consumption in terminal applications such as AI servers and Edge AI continues to drive the demand for Power-related ICs, becoming a key factor in supporting the utilization rate of eight-inch production capacity for the entire year. Furthermore, recent concerns in the PC/laptop supply chain about the growth in demand for AI Server peripheral ICs may put pressure on eight-inch production capacity, prompting early stockpiling of PC/laptop Power ICs, and even non-Power-related components. In addition to supporting the high utilization rates of eight-inch production capacity for mainland Chinese and Korean Tier 2 wafer fabs, the situation for players in other regions has also significantly improved. It is estimated that the global average utilization rate of eight-inch wafers in 2026 will increase to 85-90%, significantly higher than the 75-80% in 2025. Some wafer fabs are optimistic that the eight-inch production capacity in 2026 will become tight and have informed customers of price increases ranging from 5-20%. TrendForce indicates that unlike in 2025 where price increases were targeted only at some old processes or technologies, this time prices will be adjusted across the board, regardless of customers or platforms. However, due to concerns in consumer electronics and the squeeze on peripheral IC costs due to the rise in memory and advanced technology prices, the actual increase in eight-inch wafer prices may be more moderate.