Powerchip Semiconductor Manufacturing Corp has announced a substantial increase in its memory foundry pricing and is accelerating its transformation into an "AI Foundry," signaling the Taiwanese wafer foundry's strategic repositioning to capitalize on the artificial intelligence wave.
During a July 14th earnings call, company President Chu Hsien-Kuo revealed that memory foundry prices will be raised by 45% starting this month, with the related output expected to contribute to revenue and profit beginning in November. This move is anticipated to boost the proportion of revenue generated from the memory business. Chairman Frank Huang explicitly stated that Powerchip is no longer a traditional wafer foundry nor merely a DRAM manufacturer; it is comprehensively transitioning towards an "AI Foundry."
This price hike coincides with an upward cycle in the memory market, coupled with the company's multi-faceted developments in advanced packaging, DRAM, and flash memory. The market expects these business segments to become significant drivers of the company's performance growth over the next several years.
Memory Foundry Price Increase and November Revenue Contribution
At the earnings call, Chu Hsien-Kuo disclosed that Powerchip's memory foundry quotes will be raised by 45% this month. The output related to this price adjustment is projected to materialize in November, directly impacting revenue and profits while further elevating the memory business's share of total revenue.
Regarding DRAM technology, Powerchip's self-developed OneX DRAM process entered small-volume production in June. The company is currently advancing yield improvements and customer validation. The OneP process, co-developed with Micron, is scheduled for related equipment installation in the first quarter of next year, targeting mass production by mid-2028 to gradually advance DRAM technology to more advanced nodes.
For flash memory products, SLC NAND market prices continue to rise, driven by demand from AI servers and AI end devices. NOR Flash is also experiencing growth opportunities due to supply-side structural adjustments. Chu Hsien-Kuo noted that Powerchip's current monthly NOR Flash wafer starts have exceeded 10,000 pieces, with the company continuously expanding order intake. These products will also progressively transition to the more competitive 20nm process and next-generation offerings.
Advancing Multiple Lines in Advanced Packaging for AI Supply Chain
Frank Huang emphasized that with the rapid expansion of AI computing power demand, the advanced packaging market continues to heat up. In recent years, Powerchip has actively developed advanced process platforms such as Integrated Passive Devices (IPD), silicon interposers, Wafer-on-Wafer (WoW), and PWF, aiming to build a comprehensive AI chip manufacturing solution.
Currently, the company's 12-inch silicon-based products have obtained EMIB technology certification from a major international CPU manufacturer and have begun mass production shipments. The WoW technology boasts years of mass production experience, with yield rates and technological maturity at industry-leading levels. The company plans to continue expanding its application footprint in areas like AI servers, optical communication, and AI end devices.
For interposers, Powerchip has begun capturing some spillover market demand. WoW technology has completed validation for multiple customers. The PWF pilot line is planned to be completed by the end of this year, with mass production targeted for the fourth quarter of 2027, potentially becoming a key engine for performance growth in the coming years.
Target to Increase AI Foundry Revenue Share to 20% Within Three Years
Frank Huang pointed out that Powerchip's greatest competitive advantage lies in its simultaneous capabilities in memory foundry, logic foundry, and advanced packaging. This allows it to offer a complete manufacturing platform tailored to customer needs, differentiating it from typical wafer foundries focused on a single business.
In terms of product portfolio optimization, the company plans to continuously increase the proportion of AI and automotive chip businesses. It is also advancing production line upgrades and equipment integration at its Hsinchu facility and is developing new technologies like silicon photonics (CPO), infrared sensing, and power devices to further expand its coverage within the AI supply chain.
Huang stated that 3D AI Foundry-related business currently accounts for about 5% of the company's revenue. The target is to increase this share to 20% within three years, establishing it as a core pillar supporting the company's long-term growth and enabling it to seize the long-term growth opportunities in the AI semiconductor market.
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