AI Is Not a Short-Term Economic Cycle! World Advanced Strategy: Demand Will Outstrip Supply Until 2027, AI Revenue Share to Reach Double Digits This Year

The AI boom is not only driving demand for advanced manufacturing processes but also bringing mature processes back into the spotlight. At today’s (4th) investor briefing, Fang Lue, Chairman and Chief Strategist of World Advanced (5347), stated unequivocally that AI is not a short-term economic cycle, but rather "structural growth." He projected that until 2027, AI-related demand will significantly exceed the supply capacity of mature processes, and the market will continue to face supply shortages.

Driven by rapidly growing demand for power management ICs (PMICs) in AI servers, World Advanced expects its AI-related revenue share to surpass double digits for the first time this year—nearly doubling compared to last year. Both the proportion and absolute amount of AI-related revenue are expected to grow further next year.

Fang Lue: AI Has Become Structural Growth, Supply-Demand Tightness to Continue Through 2027

While some market participants remain concerned whether the upcycle in mature processes has peaked, Fang offered a different assessment. He noted that the current global economic environment remains positive, AI investment trends have not changed, and related demand is not driven by short-term inventory builds, but instead is propelling the semiconductor industry into a new phase of structural growth.

"AI demand far exceeds the current production capacity of all manufacturers," Fang pointed out. Looking ahead to 2027, AI-related demand is expected to clearly surpass market supply, and supply shortages will persist. Therefore, World Advanced has been continuously investing in expanding capacity for mature processes—both 8-inch and 12-inch—not for short-term economic gains, but to meet customers’ long-term needs over the coming years.

AI Revenue to Double This Year, Share to Enter Double Digits in Second Half

In addition to sharing industry insights, World Advanced also disclosed the latest progress in its AI business for the first time. Chen Shih-chun, Deputy General Manager of Global Business and Planning, said that last year, AI-related revenue remained in the low single-digit percentage range. While it stayed in the single digits during the first half of this year, the second half will see the AI-related revenue share officially enter double digits, with the full-year figure maintaining at this level—almost doubling from last year.

Looking ahead to before 2027, the company expects AI-related revenue to continue increasing. Chen stated that while next year’s growth rate may not exceed this year’s, both the AI revenue share and absolute amount will continue to rise. AI has become one of the most important growth drivers for World Advanced.

AI Servers Drive PMIC Demand, Mature Processes Return to Center Stage

Fang highlighted that World Advanced has long focused on Power Management, perfectly aligning with the rapid expansion of AI data centers. Demand for Power System control ICs, PMICs, and discrete power components (Discrete) has risen simultaneously, re-establishing the market relevance of mature processes.

Chen also noted that currently, DC-DC power products related to AI servers remain most competitive using 8-inch processes, especially for discrete power components. Presently, 8-inch technology can meet the requirements of high-performance applications, and the market will not fully transition to 12-inch processes in the short term. Therefore, the company remains optimistic about continued growth in demand for 8-inch mature processes.

8-Inch Remains a Key Battlefield: Upgrading to Finer Geometries, Actively Sourcing Used Equipment

The surge in AI demand has made 8-inch mature processes once again a fiercely contested domain. Fang stated that World Advanced remains one of the few foundries globally continuing significant investments in 8-inch capacity. In addition to building new 12-inch fabs, the company is simultaneously upgrading existing 8-inch lines, converting some coarse-line processes into fine-line products to increase the proportion of high-value-added offerings.

Meanwhile, facing extended global equipment delivery timelines, the company continues to expand capacity by procuring used tools. Fang indicated that whenever suitable equipment becomes available, the company actively integrates it—shortening setup time, reducing investment costs, and improving overall capacity utilization efficiency to meet rapidly growing AI customer demand.

Costs Continue to Rise: 2027 Price Adjustments Will Be No Smaller Than This Year’s

With demand consistently exceeding supply, prices for mature processes continue to rise. Fang stated that World Advanced always aims to establish long-term partnerships with customers. Despite market shortages, the company continues to invest heavily in expanding both 8-inch and 12-inch capacities to support future customer needs. However, given the ongoing increases in global talent, equipment, and material costs, moderate price adjustments to reflect these rising costs have become necessary.

He revealed that discussions with customers regarding 2027 pricing mechanisms have already begun. Considering continuously rising construction and operating costs, "the magnitude of price adjustments in 2027 will not be smaller than in 2026."

AI Will Be World Advanced’s Primary Growth Engine for the Coming Years

From the rapid rise in AI revenue share, to renewed supply-demand imbalances in mature processes, to simultaneous expansions in both 8-inch and 12-inch capacity, World Advanced’s investor briefing sent a clear message: AI is no longer just a new application driving short-term revenue growth—it is now a key engine driving the company’s operations over the next several years.

For World Advanced, strategic initiatives in AI server power management ICs, mature processes, and compound semiconductors are beginning to bear fruit, reinforcing the company’s optimistic outlook on industry demand through 2027. As AI investments continue, the importance of mature processes is being rediscovered by the market, and World Advanced is actively positioning itself to capture this new wave of growth opportunities.