According to the latest survey by TrendForce, recent shifts have emerged in the supply and demand dynamics of 8-inch wafers: against the backdrop of gradual production cuts by two major manufacturers, TSMC and Samsung, demand for AI-related Power ICs is growing steadily. Furthermore, concerns within the consumer products sector about rising IC costs and potential capacity constraints in the second half of the year have prompted early stockpiling. Beyond mainland China fab operators, whose 8-inch capacity utilization rates have already rebounded to high levels since 2025, other regional players have also received upward revisions to 2026 orders from clients, leading to similarly adjusted utilization rates. Consequently, foundries are actively planning price increases. On the supply side, TSMC officially began gradually reducing its 8-inch wafer capacity in 2025, targeting a complete shutdown of some facilities by 2027. Samsung also initiated 8-inch production cuts in 2025, adopting an even more assertive approach. TrendForce anticipates that global 8-inch wafer capacity will consequently decrease by approximately 0.3% year-over-year in 2025, marking the onset of a negative growth phase. Despite plans for minor capacity expansions by players like SMIC and Vanguard in 2026, these increases are expected to fall short of the scale of reductions by the two major manufacturers. The annual decline in capacity is projected to widen to 2.4% in 2026. From the demand perspective, 2025 saw a noticeable increase in 8-inch capacity utilization for some operators starting mid-year, driven by incremental orders for AI Server Power ICs and rising demand for local foundries' BCD/PMIC products fueled by the IC localization trend in mainland China. This led them to initiate compensatory price hikes for foundry services, effective in the second half of the year. With mainland Chinese foundries operating at full capacity, spillover orders have concurrently benefited South Korean foundries. Entering 2026, increasing computational power and power consumption in end applications like AI Servers and Edge AI continue to stimulate demand for Power-related ICs essential for power management, forming a key pillar for sustaining full-year 8-inch capacity utilization. Additionally, recent concerns within the PC/notebook supply chain that growing demand for peripheral AI Server ICs might strain 8-inch capacity have prompted early stockpiling of PC/notebook Power ICs, and even non-Power related components. These factors not only support high 8-inch capacity utilization for mainland Chinese and South Korean Tier 2 fabs but have also spurred a significant recovery for operators in other regions. Global average 8-inch capacity utilization is forecast to rise to 85-90% in 2026, a marked improvement over the 75-80% seen in 2025. Some wafer fabs, optimistic that 8-inch capacity will tighten in 2026, have notified customers of impending foundry price increases ranging from 5% to 20%. TrendForce indicates that, unlike the 2025 adjustments which were limited to specific legacy processes or technology platforms, the upcoming hikes represent a comprehensive price increase applicable to all customers and process platforms. However, due to underlying concerns about consumer end-demand and cost pressures on peripheral ICs from rising memory and advanced process prices, the actual magnitude of the 8-inch wafer price increases is likely to be more moderate.
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