VIS Bets on AI Power Chips With $2.16 Billion Singapore Expansion

Vanguard International Semiconductor (VIS) is raising its profit and revenue projections for 2026 as the deployment of AI infrastructure triggers a surge in demand for power management chips. The company is accelerating its capacity ramp-up to address a significant global undersupply of these critical components.

Financial performance already reflects this shift. VIS reported a previous quarterly net profit of NT$2.98 billion, representing a 32.4% sequential increase and a 45.6% jump year-on-year. This growth is underpinned by a rapid rise in AI-related revenue, which grew from a low-single-digit percentage of total sales last year to a double-digit percentage this year, with further gains expected through 2026. Current factory utilization is projected to exceed 90% this quarter and climb higher in the next, with order visibility now extending four months.

Addressing the Capacity Gap

To combat the shortage, VIS is executing an aggressive capital expenditure plan, intending to spend between NT$60 billion and NT$70 billion (US$1.85 billion to US$2.16 billion) this year. The centerpiece of this investment is a new 12-inch fabrication plant in Singapore, developed as a joint venture with NXP Semiconductors under the name VisionPower.

This facility is scheduled to begin volume production in the first quarter of 2027. To support the plant's technical capabilities, VIS is leveraging technology transfers from TSMC for 30nm and 40nm processes, which will allow the Singapore site to produce both chips and interposers.

A Structural Shift in Demand

This expansion marks a transition for the power management sector from cyclical fluctuations to a permanent growth trajectory. Chairman Fang Leuh has characterized the AI-driven surge as an "irreversible trend," stating that the current growth is "structural," rather than a short-term upcycle.

This shift indicates that the AI boom is expanding beyond high-end GPUs and into the broader semiconductor ecosystem. Because AI servers require sophisticated power efficiency and management, the resulting demand is creating a persistent gap in supply. Leuh warned that AI demand is currently "significantly exceeding" the combined capacity of suppliers, suggesting that shortages will remain evident throughout next year.

Future Outlook

As VIS moves toward 2027, the industry will be watching the successful activation of the Singapore fab to see if it can close the capacity gap. While the company is currently benefiting from high utilization and strong order books, the primary challenge remains the speed of the ramp-up relative to the accelerating needs of AI data centers. The company's ability to maintain this trajectory will depend on the seamless integration of TSMC's technology transfers and the timely commencement of volume production at the VisionPower facility.