[Edaily Reporter JAEMIN SONG ] As SamsungElectronics and Taiwan’s TSMC focus on producing 12-inch (300 mm; the diameter of a semiconductor wafer) wafers for artificial intelligence (AI) semiconductors, the 8-inch (200 mm) foundry market—once considered “legacy”—is experiencing an unexpected boom. As major companies are successively pulling out of low-profit 8-inch production lines, demand for power management integrated circuits (PMICs) for AI servers and other components has exploded, leading to supply shortages and price hikes.

According to industry sources on the 12th, DB HiTek Co.,LTD plans to raise 8-inch foundry prices further in the second half of this year, following an increase in the first half. After raising prices for its flagship BCD (Bipolar-CMOS-Digital) process in the first half, the company is expected to expand the scope of price hikes to include display driver ICs (DDIs) and other products in the second half.

8-inch wafers are typically used to manufacture system semiconductors with circuit line widths of 90 nanometers (nm) or more. Although their productivity is lower than that of 12-inch wafers, products such as PMICs, DDIs, image sensors, and automotive and industrial power semiconductors still rely heavily on 8-inch processes.

However, SamsungElectronics and TSMC are reducing their 8-inch production capacity by focusing investments on highly profitable 12-inch leading-edge processes and advanced packaging. Chinese foundries SMIC and Huahong are also shifting the focus of their new investments toward 12-inch processes. Meanwhile, as power consumption in AI servers and data centers increases, orders for PMICs—which control power flow—are growing rapidly. This has created a situation where supply is shrinking while demand is rising.

DB HiTek Co.,LTD is operating at virtually full capacity. With orders increasing not only for PMICs for AI servers but also for power semiconductors for industrial and automotive applications, the company reportedly finds it difficult to allocate sufficient quantities to meet all customer demand. Driven by price hikes in the first half of the year and rising utilization rates, DB HiTek Co.,LTD’s second-quarter revenue and operating profit increased by 23% and 43%, respectively, compared to the same period last year.

Price hikes are spreading to Chinese and Taiwanese manufacturers. According to market research firm Omdia, SMIC raised 8-inch wafer prices by 5–10% in the first quarter of this year compared to the previous quarter, and in the second quarter, it further increased prices for 8-inch high-voltage 150-nanometer processes by an additional 5%. Taiwan’s Vanguard raised prices by 10–15% in the second quarter, while UMC raised them by 10% and PSMC by 5%. Huahong has also been steadily raising prices since last year, as its 8-inch production lines have effectively reached full capacity.

This supplier-dominated market is expected to continue for the time being. According to TrendForce, global 8-inch fab production capacity is projected to decline by 2.4% this year, following a 0.3% decrease last year. Although companies such as SMIC and Vanguard are undertaking some capacity expansions, analysts note that overall production capacity will continue to decline as they are unable to make up for the reductions made by SamsungElectronics and TSMC. The average utilization rate is projected to rise from 75–80% last year to 85–90% this year.

Component shortages driven by the AI boom are occurring on a wide scale, affecting not only older-generation chips but also multilayer ceramic capacitors (MLCCs) and high-performance semiconductor substrates. An industry official stated, “AI demand is driving price increases across the entire supply chain—not only for cutting-edge semiconductors but also for power semiconductors and general-purpose components.”