Large semiconductor wafers are in demand, manufacturers expand production
Fabs are expanding production aggressively, and demand for silicon wafers is strong. It was reported on June 29 that more than 80% of the production capacity of the 12-inch silicon wafer fab built by Universal Wafer Program in the United States with about US$5 billion has been booked, and the factory is expected to be put into production in 2025.
The relevant person in charge of Shanghai Silicon Industry, a large-scale semiconductor wafer manufacturing enterprise in China, recently told a reporter from China Securities Journal that this year’s orders have been filled, and customers have more orders, the company will increase production and capacity as soon as possible.
Have expanded production
Global Wafer, the world’s third-largest semiconductor wafer manufacturer, recently announced that it plans to spend about $5 billion to build a new 12-inch silicon wafer factory in Texas, USA. The new plant is expected to be put into operation in 2025, with a maximum production capacity of 1.2 million pieces per month.
Global Wafer said that 12-inch silicon wafers are one of the indispensable key materials for chip manufacturing. Chip manufacturers such as GF, Intel, Samsung, Texas Instruments, and TSMC have announced expansion of production, and the demand for silicon wafers in the United States will greatly increase.
In fact, after confirming the failure of the acquisition of German semiconductor silicon company Siltronic for US$5.3 billion in early February this year, Universal Wafer launched a new round of expansion plans.
At that time, the total capital expenditure given by Universal Wafers from 2022 to 2024 was NT$100 billion (about 3.6 billion US dollars), including the expansion of the new factory. The company expects to gradually release the capacity of the new production line from the second half of 2023.
Shin-Etsu Chemical, the world’s largest semiconductor silicon wafer company, announced in late February this year that it plans to invest more than 80 billion yen in equipment in response to the strong demand for silicon wafers. Another Japanese semiconductor wafer maker, Shengco, plans to spend 228.7 billion yen to expand its 12-inch semiconductor wafer production capacity.
Shanghai silicon industry is actively expanding production through three subsidiaries. Among them, Shanghai Xinsheng, a subsidiary that produces 12-inch silicon wafers, will add 300,000 wafers to the existing monthly production capacity of 300,000 wafers, and subsidiary Okmetic will add 3.132 million wafers of 8-inch semiconductor polishing wafers annually.
Leon Micro plans to issue convertible bonds to raise funds of no more than 3.390 billion yuan, and enhance production capacity through fundraising projects. The fundraising projects include: an annual output of 1.8 million 12-inch semiconductor silicon epitaxial wafers, an annual output of 6 million 6-inch silicon polishing wafers for integrated circuits, etc.
In short supply
Silicon-based is currently the largest and most widely used semiconductor material, and more than 90% of semiconductor products are made of silicon-based materials. Since the second half of 2020, the global semiconductor industry as a whole has maintained a high boom, and the gap between supply and demand of silicon wafer manufacturing capacity has continued to expand.
Xu Xiulan, chairman of Universal Wafer, said recently that the company’s current 12-inch silicon wafer production capacity is fully loaded. Recent changes in external conditions have not affected the willingness of customers to continue to sign long-term contracts. Some customers sign up to 2028, and some customers sign up to 2031. In the next few years, the company has almost no stock to supply.
Shenggao stated at the first-quarter performance briefing that by 2026, the company’s 12-inch silicon wafer production capacity has been fully covered by long-term contracts, and it cannot supply customers outside long-term contracts.
From the demand side, TrendForce recently stated that despite the continued weak demand for consumer electronics, however, the demand for structural growth in the fields of servers, high-performance computing, automotive and industrial control has not decreased, which has become the key driving force to support the growth of the foundry market in the medium and long term.
The compound annual growth rate of global wafer foundry capacity is expected to be 11% from 2021 to 2024. The International Semiconductor Industry Association said recently that the world will still face a shortage of chips by 2024.
From the perspective of supply, according to the research report of Capital Securities, the increase in global silicon wafer production capacity this year cannot meet the demand, and the situation that the supply of silicon wafers is in short supply will continue.
According to the statistics of the International Semiconductor Industry Association, as of the end of 2021, 19 high-capacity chip manufacturing lines around the world have entered the construction period, and another 10 chip manufacturing lines will start construction in 2022, and the amount of semiconductor silicon wafers will skyrocket. The global semiconductor wafer industry will usher in a new round of market opportunities in short supply.
[Source: China Central Radio Network]