Phoenix plans to double its capital expenditure (capex) due to increased demand for artificial intelligence (AI)
Phoenix Silicon International Accelerates Production Capacity for AI and HPC Chips
Phoenix Silicon International Corp (PSI), the second-largest supplier of reclaimed wafers globally, has recently approved a significant capital expenditure plan of approximately US$146.5 million (NT$4.379 billion) aimed at accelerating its monthly wafer production capacity expansion for AI and high-performance computing applications.
Rising Demand for Advanced Semiconductor Manufacturing
The growth in AI, particularly in large-scale training and inference workloads, is heavily increasing demand for advanced semiconductor manufacturing capacity and reclaimed wafers, which PSI specializes in. The expanding market for cutting-edge computing, including AI accelerators and GPUs, requires more efficient wafer supply chains, prompting PSI’s capacity expansion.
Strengthening Local Semiconductor Ecosystem
Phoenix and its metro area have become central to major semiconductor investments by global leaders (e.g., TSMC and Apple partnerships), strengthening local supply chains and ecosystem attractiveness. This environment supports PSI’s expansion plans.
Impact of Capacity Expansion
PSI’s investment will notably increase production capabilities, potentially reducing shortages and enabling faster turnaround times for reclaimed wafers essential in advanced semiconductor processes. As AI-driven demand takes up an increasing share of semiconductor fab outputs, PSI’s enhanced capacity positions it to serve this critical sector effectively.
With Phoenix growing as a high-tech manufacturing center, PSI’s expansion contributes to job creation and technology supply chain development in the region.
Future Projections
PSI expects that its expanded wafer capacity will be fully operational by 2026, supporting the growing and evolving needs of the AI and high-performance computing markets. Industry forecasts anticipate AI-driven semiconductor demand will continue growing rapidly, encouraging further investments in wafer manufacturing, including reclaimed wafers, which PSI produces. The Phoenix area is projected to remain a competitive hub for semiconductor and AI infrastructure investments due to favorable factors like power availability, network infrastructure, and business-friendly environments.
Financial Performance
The company's annual reclaimed wafer output is expected to grow by approximately 35 percent year-on-year, reaching 850,000 wafers per month. PSI's earnings per share for the first half of the year increased to NT$1.91 from NT$0.96. Gross margin improved significantly, rising to 35% in the first half of the year. However, the statement did not provide any financial projections beyond the capital expenditures for this year.
In summary, Phoenix Silicon International’s increased capital expenditure reflects targeted investment to meet rapidly growing AI and HPC wafer demand, bolstering its production capacity and securing its position within the expanding Phoenix semiconductor ecosystem. This move anticipates continued strong AI-driven market growth through at least 2026 and beyond.
Artificial intelligence and high-performance computing sectors require more efficient wafer supply chains, which is why Phoenix Silicon International's capacity expansion focuses on increasing production capabilities for AI and HPC chips. The growth in AI demand is also driving semiconductor investments in the Phoenix area, positioning Phoenix Silicon International to serve this critical sector effectively.
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