Cloud AI Demand Drives 8-Inch Wafer Resurgence
The semiconductor industry is seeing a comeback for mature 8-inch wafer capacity. This resurgence is a ripple effect of massive cloud AI demand, which is causing manufacturers to buffer against advanced node shortages by increasing production on older, more established process technologies.
The specific components driving the 8-inch wafer demand are power management ICs (PMICs) and MOSFETs, which are critical for managing the immense power consumption of AI servers. The shift in AI data center architecture to high-voltage direct current (HVDC) systems specifically requires more robust, high-voltage power components that are typically manufactured on these mature nodes. While demand surges, major foundries like TSMC and Samsung are strategically phasing out some of their 8-inch (200mm) capacity to focus on more advanced and profitable 12-inch (300mm) fabs. This strategic reduction is creating a supply crunch, with global 8-inch capacity projected to decline by 2.4% in 2026, even as demand from the AI sector grows. The supply-demand imbalance is causing utilization rates at 8-inch foundries to skyrocket, with projections showing an increase to 85-90% in 2026 from 75-80% in 2025. This has allowed foundries specializing in mature processes, such as China's SMIC and Hua Hong, to run at full capacity and implement price hikes of around 10% for certain processes. Taiwan-based Vanguard International Semiconductor, a key industry bellwether, is running its 8-inch fabs at near full utilization due to the high demand for power devices. This has prompted price increases between 4% and 8%, with some analysts forecasting broader hikes of up to 20% across the 8-inch market as the supply squeeze continues. The technical specifications of newer power chips exacerbate the capacity shortage. High-voltage MOSFETs required for AI applications have a larger die size, which means fewer chips can be produced per wafer. This effectively reduces the real output of functional chips even when production lines are operating at 100% nominal capacity. This capacity crunch is also creating spillover effects, as the booming demand for AI-related power chips crowds out the production of other components manufactured on 8-inch lines. Taiwanese IC designer Fitipower has warned that production for display driver ICs (DDIs) is already being impacted, a bottleneck that could eventually affect 12-inch wafer capacity as well.
