World Advanced Breaks 99% Yield at Singapore 12-inch Fab! Mass Production Set for Q1 2027, Fang Lue: Revenue and Profit Contribution to Accelerate

As global wafer foundry players continue expanding mature process capacity, World Advanced (5347)'s long-planned 12-inch wafer fab in Singapore has officially entered a critical phase. Chairman and Chief Strategy Officer Fang Lue revealed today (4) during the corporate briefing that the first 12-inch wafer fab operated by its Singapore subsidiary BSMC successfully produced initial samples in June this year, achieving a product yield exceeding 99%, while maintaining the original schedule for mass production in Q1 2027. More importantly, due to the overall ramp-up speed surpassing initial plans, the timeline to reach break-even is expected to be accelerated, with revenue and profit contributions anticipated to begin earlier starting from 2027.

First Samples Successfully Completed – 22 Months to Build, Yield Exceeds 99% BSMC represents World Advanced’s largest overseas investment to date and marks the company’s first 12-inch wafer fab. Fang Lue stated that from the initial equipment installation beginning in late August 2024 to the official production of the first sample batch in early June this year, the entire process took approximately 22 months. Not only did construction progress align with plans, but the product yield has already exceeded 99%, indicating that the overall process is highly mature and laying a solid foundation for subsequent mass production.

He noted that the factory’s equipment setup is largely complete. The company continues to control construction costs through optimized equipment configuration and the introduction of used tools, enhancing future mass production efficiency while ensuring quality.

Ramp-Up Speed Exceeds Expectations – Earlier Revenue and Profit Contribution Expected in 2027 Compared to market focus on mass production timing, Fang Lue emphasized that the overall capacity ramp-up speed is even more noteworthy.

He stated that BSMC still maintains its goal of formal mass production in Q1 2027, but due to faster-than-expected integration progress, future capacity scaling will proceed faster than originally planned. Reaching break-even or full mass production could therefore occur ahead of schedule.

"Starting from 2027, this will have a very positive impact on the company’s top line (revenue) and bottom line (profit)," said Fang Lue, adding that the current overall progress of the 12-inch fab is "very good," and the company is confident in subsequent mass production and customer integration.

Capital Expenditure Expected to Decline Next Year – Depreciation Costs to Gradually Increase With the 12-inch fab gradually completing setup, the company’s capital expenditures will also begin to shift. The finance team indicated that 2024 remains the peak investment year for BSMC, with capital expenditure for 2026 maintained between NT$60 billion and NT$70 billion, mostly allocated to 12-inch and 8-inch equipment installations. However, as major equipment installations are progressively completed, capital expenditure in 2027 is expected to decline compared to this year.

On the other hand, as the factory begins mass production, depreciation expenses will simultaneously increase. The company noted that once the 12-inch production lines officially commence operations next year, related equipment depreciation will gradually appear on the income statement. While depreciation amounts will continue to rise, this also signifies that the new fab is beginning to contribute operationally.

Phase 2 Still Under Evaluation – Prioritizing Full Utilization of Phase 1 First In addition to Phase 1 progress, institutional investors also inquired whether planning for BSMC Phase 2 had begun. Fang Lue stated that Phase 1 capacity is almost entirely pre-booked by customers, so from a market demand perspective, there is indeed a need to plan for Phase 2 expansion. However, the company currently prioritizes smooth mass production and rapid capacity scaling of Phase 1, with Phase 2 still in the preliminary evaluation and preparation stage, without a formal investment decision yet made.

He emphasized that while background work and communication have begun, the timing for launching Phase 2 will ultimately depend on market demand and the operational performance of Phase 1.

Interposer to Be Next Strategic Move – AI Applications to Benefit Simultaneously Beyond mature-node wafer foundry services, BSMC will also take on more AI-related manufacturing tasks in the future. Fang Lue pointed out that besides mature-node products, the 12-inch fab will become a crucial foundation for the company’s future development of new products such as Interposers (silicon interposers). World Advanced adopts a co-investment model with customers, where clients provide certain equipment while the company delivers manufacturing services. Once these products are introduced, not only will 12-inch fab utilization rates improve, but AI-related revenue streams will also expand.

From 8-Inch to 12-Inch – Building the Next Growth Curve For World Advanced, the significance of BSMC extends beyond merely adding an overseas wafer fab. As AI drives rapid growth in demand for mature processes, the company is simultaneously strengthening its advantages in 8-inch power management chips while leveraging the new 12-inch facility to enter higher-end mature processes and AI application markets, forming a dual-engine strategy of "stable 8-inch growth and new momentum from 12-inch."

With the first batch of samples achieving over 99% yield, mass production timelines confirmed, and ramp-up speeds exceeding expectations, BSMC is transitioning from the capital expenditure phase toward operational contribution, becoming a key pillar for World Advanced’s revenue and profit growth in the coming years.